TSN - Earnings call transcript Q1 2025

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Operator

Good morning, everyone, and welcome to the Tyson Foods Fourth Quarter 2024 Earnings Conference Call [Operator Instructions] Please also note, today's event is being recorded. At this time, I'd like to turn the floor over to Sean Cornett, from the Investor Relations team. Sir, please go ahead.

Sean Cornett

Good morning, and welcome to Tyson Foods' Fiscal First Quarter 2025 Earnings Conference Call. On today's call, Tyson's President and Chief Executive Officer, Donnie King, and Chief Financial Officer, Curt Calaway, will provide former remarks, followed by Q&A.

Additionally, joining us today are Brady Stewart, Group President, Beef, Pork and Chief Supply Chain Officer; Kyle Narron, Group President of Prepared Foods; Wes Morris, Group President, Poultry; Kevin Cole, President, International and Global McDonald; and Melanie Boulden, Chief Growth Officer.

in a and which Investor is and the prepared on be Relations also via call today's available link have supplemental may presentation, referenced website We webcast. our on Tyson's

the pursuant XXXX. we Securities call, Litigation the during statements expectations statements make During safe future. are harbor today's forward-looking provided will These call Private of the regarding Reform forward-looking our Act for to this of made provisions

or our to or obligation statements additional that include from These reflecting disclaimers comments adjusted relate forward-looking differ update differ to about our in risk well projections. information basis Slide to do actual cause may operating on performance Forward-looking and no and noted. SEC materially events materially statements. Please unless our could solely our expectations, not share, that as statement to current to for on remarks X, margin which Please beliefs assume an concerning to our are forward-looking future assumptions We filings actual statements risks, earnings all historical that to assumptions, refer factors per references operating results results forward-looking from cause periods. are income note otherwise uncertainties subject any our projections. as our

their of to to reconciliations release. For these please non-GAAP corresponding refer measures, GAAP measures our earnings press

Donnie. Now turn over call I'll to the

Donnie King

increased in is a confidence our start. in solid quarter year raise XXXX first The us guidance. to Fiscal off results Sean. year our full ahead, to Thanks, the the enabling strong

better-than-expected other, to Prepared first by international the income quarter in and highlighted this in the profits margins. were segment. results best generate while chicken, and significant beef for driven and in results improvement performance operating continues robust in profitability quarter Foods solid Our We delivered another adjusted by

Tyson. sales, operating across sets of adjusted the income metrics, we including earnings per third marks of another be year performance anticipate adjusted growth key quarter quarter year-over-year what for increases will share. This tone for our first Our consecutive and

our grew First the income last with total, XX%. and accomplishment a the by first at $XXX expanded operating share best quarter XXX by the by deliberate XXXX. while X.Xx from operating at adjusted income XX%, versus ratio of remarkable quarter margin adjusted notable leverage points X.Xx, earnings increased an end impressive our year. Adjusted ended We years. per million, a our more X in quarterly quarter net In delivered than performance basis

challenges data both at of posed we Protein While and current consumption remains forefront by cattle ongoing surveys. per the capita consumer have on based preferences through cycle. managed the consumer

one its on While backdrop to benefits Food Council up the healthy dynamic, their lifestyle. A consumer remains us. in is Consumers nutritional from thing to diets, consumers of that XX% XXXX in in revealed XXXX. protein by U.S. role in their recognizing sought supporting focused Information a its is This recent increase study and consumption. clear International prioritizing remain XX% protein

the fundamentals, we offset execution to foundation Our multi-protein controlling in we the portfolio fortifying helping chicken disciplined challenges with our operational beef. Through have delivered power of what demonstrated performance, the to and can. diversified ongoing improved results, sticking and

and flow financial cash to Turning strength.

Our once first out quarter stood again.

and target disciplined commitment cash improving long-term robust are are investment and enabled our reinforces and financial we strength ensures management This deploying leverage to expenditures net ratio building sequentially took shareholders. step strategy of with Xx. less which the our we than another lowered towards prudently in our we capital Our to and profitability, approach working flow, has business through When capital dividends. combined

closer for let's at take Now is a segment performance. fiscal XXXX. Prepared track look Foods on

snacking improvements, by initiatives our distressed grew categories, sausage. Growth outperforming and momentum as as quarter-over-quarter what by innovation. the overhead optimizing core launching to can, expanding throughput lowering Operationally, made well. bacon, our innovation drive of progress and plan X smoked such improvement planned in entirely driven reducing controlling our the we built almost We yield share tremendous and inventory costs. winning from impact we continues first distribution on have We year operations, our quarter our full by and in

put While execution, the timing on us in our pressure forward. with performance, going confidence our of market margins quarter, improved input cost inflation coupled operational the gives

part to Our in best the improvements live Year-over-year at outlook by income along us achieved stabilizing of and grain our improve cost. long-term plant adjusted for evolution unchanged. In One jointly driven quarter chicken, core fill year, earnings. operations, allowing the operating commercial order win-win years. the has with relationships operating any build lower the over consecutive while been and for rates grow income the the our growth to X we of component all year is past partnerships adjusted performance was of second in ongoing our strong category

consumer continue success Our their our of work cornerstone as exceed customer be a and expectations. obsession will to to we

segment. We volume have this in to returned also growth

We in build. adjusted the meet demand. good to a are about leading volumes outlook. In income results where full marketplace we to consumer momentum better expected. Service first the healthy our ability feel in year, our operating continues quarter were grew we beef, and start and than Importantly, Food to With position year customer our raising

operations last seasonality, spreads are are for Therefore, performance unchanged our pork, quarter the to expectations. the value-added while to our segment. In We and limited shifting cattle year. demand Higher more impact from continue our in supply Challenges fiscal typical line which, all and costs spend, products. year. to expected procurement to align yield customer managing was aspects remains, along XXXX with to from haul consumer and expectations with this compressed for enhancing versus second with mix our of distribution led

continue However, results. around to deliver our yield, and improvements operational mix spend

priorities remain As clear. through XXXX, our continue fiscal we

partnerships will we First, expanding enhancing strategy. our driving product market is all our reducing the core excellence presence. on our execution. segments continue innovation inefficiencies operational cash flow across and mix, includes customer focus and strengthening at of Operational This while and

continue taking more XXXX cost and savings in exceptional And out driving addressing enterprise, to inefficiencies we deliver on the to as the scaling are deliver boldly cost year progresses. We will performance.

amidst with like inflation consumption. Our iconic and high and softer Tyson, even to Hillshire Farm brands Jimmy category continue Dean consumers, resonate

In fact, nearly Tyson presence continuously the power seek protein see our year a products customers underpenetrated more their to and grow and by transformation the as is work AI. past households to purchased in add to diets. Digital of XX% key of consumers improve We to significant product opportunities segments consumers discover our we how generative U.S. enabler. leveraging another in

influencing channel, evolving capital. allocation Foods a foodservice our invaluable disciplined in CapEx Capital insights highly remains customers. It flow offers and experience example, browsing content. and of beyond free of a an that our on relevant with prudent sustaining implemented more intuitive goes search we working This purchases. Tyson enhancement the needs focus through into cash delivers As management

team the place skills are talent asset. now members Finally, across for are By our development ensure encouraging fostering and growth and and the organization, in our future. greatest the right that we

Before handing our that let our powered long-term things and over XXXX strategy, in diversified outlook strength me multi-protein to by confident we portfolio of and say are the iconic Curt, our fiscal brands.

profitable seek is we indication our Our we first another as quarter as what control strong commit within drive over time. growth to controlling is to of execution

I Through unturned push to do excellence, leave are operational positioned as review to to a innovation, food company. With we financials well as continue in and detail. turn operators. more ourselves marketing legacy be a stone in to protein Curt best-in-class continue will world-class we leader no and and to to that, call value shareholder strive to the over more We and our generate our

Curt Calaway

Thanks, Donnie.

growth beef, total driven year-over-year, pork and enterprise net chicken. by quarter First in sales grew X%

adjusted our with year-over-year, a to XX% discipline adjusted increased that and the both underscoring deliver X grew income results past operating their environment. important earnings ability levels adjusted share is reached Our and adjusted per earnings execute income per quarters, XX%. highest operating and It team's in dynamic to highlight in share

last sales. in We prices costs, with channels higher Looking in at food a quarter. through flat sow In in income and recovering decreased raw which volumes industry, performance. and others our year. sharp price primarily Adjusted [ ] away consumer relatively the to navigate home decline due in from in continue these operating volume anticipate We, impacted to increases of the rise the [indiscernible] Prepared like our pass-through. primarily material dynamic some environment, retail was segment versus Foods, particularly the drove

income we income higher continued where performance the in Chicken sales almost also year. promotion doubled we are continue traction. value-added channel, and while strong operational last to quarter on and record be this cost, made was best input costs progress primarily quarterly highlighting to in and and driven operating head performance our by Adjusted live first making first This year-over-year years. lower X in a products and increase volumes in due increasing revenue declined start-up an record a repurpose the strong the support inefficient income increased with mentioned, gaining improvements. bright costs, marketing last execution improvement our revenue carcass compressed performance. In delivered value-added income, foodservice portfolio, offset operations last impacting Adjusted in along plant raw grew volume, operating spreads operational driven quarter beef, and pork, results favorable adjustment ongoing increased operating though Other International year. Meanwhile, to due mix higher by improved to weights cutoff, costs. Asia, adjusted an partially valuation by higher improved inventory operating of continues to Donnie spot with initiatives supported lapping higher our by As a the quarterly from in and material adjusted impact in due throughput.

Turning to our financial position.

unchanged. disciplined capital remain priorities allocation Our

remained our shareholders. In A free $X board expectations shareholder We per $XXX through Capital a to with quarter, to operating which spending leading cash are We we returning million maintaining in reinforcing $XXX Class million. to rate and cash first our business to to $X.XX $XXX investing focused quarterly share, growth on billion in of shareholders dividends, and cash million, flow the in financial returns. strength, of increased flows. at commitment returned line generated disciplined

with declined consecutive leverage fifth continued our Our of disciplined management. $X.X to on cash net We ended our quarter we in X.Xx, and focus improvement liquidity. the billion quarter

$XXX was paid due loan generation Given our million business, that cash the in XXXX. January, in term the we of off

we value strength, and As credit long-term financial rating, prioritize shareholder our investment-grade creation.

review take to for our updated moment 'XX. outlook a Now fiscal let's

we confident ahead, achieving to improved Looking fiscal in 'XX. compared performance remain financial

first now billion our to healthy billion demand primarily We building performance the while for a $X.X billion. of flat between Total on $X.X highlighting $X adjusted is in to XX%, up tax driven by income operating be interest million guidance sales $XXX expect between to of are raising our expense controls volume, tight We and anticipate X%, maintaining be $X.X approximately to now company CapEx around billion, and and rate quarter. raised protein. between strong

have be to $X.X in quarter, expectations cash free the expect in updated for flow of our billion. we full billion and we second seasonality typical range cash to As the year free $X flow,

to provide more on Now color our segments.

operating income typical more to $X.X being operational adjusted Foods efficiency lowest ramp-up seasonality, and expect by Prepared we driven guidance at gains. timing-related and maintaining due Unlike of first with quarter first $XXX second are half, We improvements. of quarter to the million year, billion, a the the the factors balanced

midpoint, factoring billion in billion, without As given value-added growth first a double-digit by marketing. or assuming reinvesting behavior. In adjusted our strong operational in we forecast income reminder, at we consumer $X the initiatives raising improvements enabled chicken, and our while are to portfolio in as assumes quarter sustain to changes $X.X internal performance, operating the guidance significant

balancing an the expected throughout loss guidance to million improvements year. spreads of $XXX Our against with of tighter million, unchanged remainder beef $XXX the remains operational

tighter ongoing remains also by guidance unchanged operational to pork million with $XXX improvements, offset Our million $XXX spreads. at

Finally, business profitability. our in to international momentum continues show

we Other this Following $XX to International million adjusted of year. be and approximately year income expect $XX between million last operating $XXX million and

over the Now Donnie. I'll to turn back call

Donnie King

globe customers in like start suppliers consumer and combined their for future. I'd the which positioned dedication, the and partnership, for work highlighted have fiscal our are with strong for portfolio discipline, operating the guidance success. optimism to great one and as XXX,XXX like operational on by a focus Tyson, increasing our team One raise. With and their our thank XXXX to for I'd Curt. leadership, well thank members we protein, our brand also off year, we're drives team, Thanks, our by to hard across market

we committed strength, and your we as financial remain Sean to returns to execute turn move always, over our strategy. With excellence that, As operational [indiscernible] shareholder questions. I'll we things to

Sean Cornett

Thanks, Donnie.

apply your will non-GAAP the that Q&A. statements following move forward-looking prepared measures now Q&A and our recall We provide the to instructions. please to and Operator, Please on cautions remarks our both questions.

Operator

from [Operator Heather today Instructions] Our question Jones first Heather from comes Research. Jones

Heather Jones

quarter. Congratulations on the

have the a quarter. First thing, call wondering, outline And could I today? was strong a from I the that investors to most follow-up. then just I you're was And if it just away things wondering wanting was take you

Donnie King

Sure. And thank pleased results. you for the with our QX We're question.

portfolio. performance of sales, and continue the multichannel was per We more and adjusted to the consecutive best year-over-year third X see of earnings the years, adjusted income increases multi-protein than quarter in in quarterly QX operating benefits our share.

the fortifying foundation value-added clearly our branded of strategy business growing and is working. Our and

In priorities for consumers our shift balance value-added to terms continue is consumption. the and penetration. branded every of are the the and will and of increased we enterprise increasing household diet mix of year, Protein healthy to part

XX% increase protein of seeking to consumers are fact, In their consumption.

to return everything will creating that improve continue And execute with excellence We invested continue we shareholder on capital, will we in value. do. to

years. the chicken. QX in quarter the strongest best income the adjusted of segments, performance had In ever Chicken individual terms X operating and

particularly food We consumers, service. In are winning segment, the in with customers we've had volume returned growth, Beef we and results. better-than-expected and

year remains the on Our view unchanged.

for related results mix in procurement was the foundation, QX efficiency Foods, mix we're Asia. value-added. In international, by to efficiently operating ever planned year. Prepared while added. In their value on on we more the expectations, to impacts, our strong expect best commodity shifting performance adjusted the line operating focused due fortifying we are supported in phasing. In more enhancing income, with shifting counter-seasonal track to plant had Despite distribution, Pork while Pork. and timing to We from

for takeaways XXXX. Number So five one. key terms you in of

and built in We Number and Number at income double-digit operating net of from Foods for last we by your the with an impacts guidance agility also billion range driving gross we a are this impact Both to million growing X.Xx of another FY three, while net five, adjusted over all profitably. while and manage to [indiscernible] $XXX $X.X our debt X quarters. finally, leverage of 'XX reduction billion we're $XXX And January. and these focused liquidity, follow-up, to consider as immigration $X.X growth managing rates Prepared doing Heather? midpoint. two, unprecedented dynamics. We X.Xx And reduced cycle. beef debt market at controlling we enabling have to the adapting we and And $X.X tariffs, raise on million the billion. we're are Chicken

Heather Jones

actually did on ask to I And want tariffs.

to yet, But of come to and every come of they're import -- pork So obviously, hogs affects in and specifics out Mexico. to U.S. put the nothing the send on roughly there's going put has reports I no tariffs in that then mean, out been but has hog cost -- cattle. tariffs of Mexico U.S. place we XX%

could to So how did go thinking out if net of you you're But net to just guidance just if you could your effect flesh through think on this. Tyson? you're your that I and And say impact operations how how play you -- thinking this about impact just out the you that going guys? about is gives for

Donnie King

Heather. Sure,

be did risks we that million. Let to RNOs the guidance $XXX someone room start these add But in may when and me did off raising I else the something. there we would consider our in of want mention

this, approaching minimize continuously trade from planning or changes. disruption business supply our we're to teams contingency chain Just how engage in

policies the leverage to XX And the our confident accordingly. in the evolving this expertise administration remain to we'll and respond identify in administration. we'll We the been monitor for conditions. for past, and Congress and We and continue amid to markets to ability succeed. various best our done navigating we've look years products working economy, adapt been to U.S. we've global As our new in to with support forward new doing

Operator

question from Ben comes Theurer next Our from Barclays.

Benjamin Theurer

this very first a quarter. all, of first Congrats strong was

on my actually, the tariffs. one would have question So been main

So pretty appreciative.

lot of a had that online. I people think

for the commentary. thanks So

in are year? an and retention of results and the update potentially for those your you And initial cycle is the [indiscernible] take we feel And doesn't for think what wanted report understand the as you've happening a we as then just what just your like it loss from much impact to beef as ago. being -- million capital first few days $XXX lower higher $XXX current to in obviously, first are numbers. But So the would -- aside and put that million had, what that versus flagged your hope USDA challenges there's unprecedented. obviously take well those conditions the end how to how maybe

Donnie King

beef. for that around Thanks question Sure.

will think to a great give detail you him relates as I business. this to let I flip it our and over Brady beef

Brady Stewart

there's curve Thanks like bottom think important we these that for to question. really we model. And these of And really our several the an business cycles, important a year it relative end at into top indicators few it's add are I feels the that we And And foremost, state And to improved beef as absolute and of it. and the what here are to well. the evaluate, in really are the it's at past conditions curve. cyclicality understand a continue to the see and of cycles, cycle a curve bottom last think versus we the I first that leading see has at side years.

to And for an as increase the herd so definitely provides us move that opportunity forward. we

fact to cattle life the record relative there's to Second, profitability have record high prices, live [ ] cap operators. prices that cattle high and be had feeder we by

certainly so provides And well. as tailwind that a

providing the a that to numbers base is XX% are cow down The to pastures will but provides important year-over-year, understand are see we we're to and cow point to it's relative indicator some some for as these that's time well. And seeing acknowledge those which I we cattle think that then move indicators graze, the pasture several beef is harvest thing us when I nearly as in in inventories, that what harvest perspective. beef, actually that we third beef things, their a rebuild future. of support we have forward all seeing we're couple cow in from cows just at important And terms as last used herd been, the has be, continue production. you of solid And the best use think really here really will

Benjamin Theurer

a just X XQ. then half, I quick to about balanced. Could on It's and balance think detail X bit the think year? you the a usual But segments also And the cadence, the more the and maybe little between as seasonality more seasonality you more half into for think as you the major Okay. as follow-up. second a you said bit major first it about like segments give mentioned the little you

Donnie King

trouble having hearing question. I'm your

Benjamin Theurer

try It's it now? I better again? Shall

Donnie King

better. much Yes,

Benjamin Theurer

Okay.

a bit. mic little moved Sorry,

question the -- to into quarter. said a breakeven of first the But you second Now second fiscal more is, expect less half. seasonality typical more the kind or half,

into could understand on the segments major So into if you particularity there's we half, any X how to the maybe XQ basis, it, as you us our assumptions? think about -- per we're of the we about think that and when a goes XQ update aware would so highlight, as second help segment what like to

Curt Calaway

that. Ben. Curt. is answer I'll Thanks, This

this that half. expect We'll little to across balanced tilt year. plans efficiencies. But the more a more some guidance the we So year typically half -- as performance in implement I one versus be would some was of where the we would think of we be stronger we really a back really the the specific that our little most see the back said year, seasonality where a unusual Prepared normal provided to to Foods, we counter on really some relative front half

the a a we in of broadly if chicken, expect QX. the QX out. would you conclusion of kind midpoint the to QX second and versus Across speaking, bit come we've little But you your chicken and of specifically beef half provided each own QX a guidance and and challenge our I a more segments ranges, seasonal to look think particularly we strongest lay manage relative generally would at normally how weather. of as through just pork, the in that

Operator

Our comes BMO. next question from Strelzik Andrew from

Andrew Strelzik

forward. more on think input layout maybe the And prepared of were to rest little as two. for be headwind the even year. a I go you kind of a the is headwind on you what I digging continue of had And a or costs more the saying first will one

in I'm to dig that see? And of give to the in deliver and been the talked those you've or of offset headwinds? that so you would could elasticity of pricing terms kind of a the And can anticipate on some if flow on curious any color you that bit or more about just the levers kind pieces you the productivity little to the of seeing through year guidance

Donnie King

Foods, I'd in Sure. grow to Andrew, had Foods, the thanks to and had distribution and just we've optimize We our the in Prepared continue Prepared for in at we largest ever we question. pipeline continue innovation remind business. Tyson prepared our operations. you

in it Narron, that, And little saw pass with we greater inputs to a rapid So QX that to certainly the of little it had me can an balance increase and impact. and detail talked was a you a over -- about he give as earlier. But was I let year. Kyle relates the

Kyle Narron

Yes. thanks, and Andrew, Thanks, the Donnie, question. for

our operations. year Donnie in improvement mentioned, of share, areas. you tell controlling our launching optimizing distribution, built categories. all QX, distribution, quarter-over-quarter those or progress and winning points on innovation plan tremendous we would We basis key that in in made our surrounding the XX I As grew full And we growing controllables,

Snacking another the categories. season where our with leader. continue items growth that Dean And consumers two roll of we bacon great our and both performance had category continue pleased the on fastest-growing We Hillshire realize as we the to with of sausage, in share Jimmy Dean remain their Jimmy be brands to

with and and trial is in surpassed X did launching [indiscernible] had [ was we've weeks, then purchase launching I last distribution which of months you initiative the excited that. in ] that launch any our we'll a about $XXX through operating growing the Griddle actually standardized X of Dean is optimizing would third its initiative biscuit on Cakes We would back tell operators. second establishing has to the the also the and And pipeline that allow than around repeat be year. And with Our focused rates million those be operations, items our world-class years. of tell discipline first we're higher just has last we're We're great the start winning remain the Jimmy innovation, initiatives. to I launch. doing Cake XX us processes additional and you off in half chicken

had Demand remains of I'm pressure the on input put year. we deliver strong, protein the margins. in is we although in we're first the for So working, and are timing cost our guidance the within that for to balance of confident the range simply inflation some controllables. What doing and quarter ability controlling

Andrew Strelzik

Okay. Great. And my quarter other the was guidance see of of unchanged. question the was a on the it there bottom of chicken the business top I left range and -- great strong was the that end you range the the you the end surprised on little chicken outlook, But to and put back that they up. raising

kind would end you drive scenarios walk that kept you factors lower that end would of of see chicken you you that I of risks guess, so can lifting lower some the of your some from just the range? of that range through drive the or And the the the to maybe guidance

Donnie King

Sure, Andrew.

Chicken did Chicken that tariffs, guidance earlier, did I We've relates pointed top model. considered mentioned well what our that our proud to that I As we do raise business. in we've also we R&Os side. of on market to you do all our in built dynamics as as the into as and it our immigration. able business But the out been plan, build when very we

flip Wes, ready respond He's know here. to over and to he's to been so me something. let I And that

Wes? So

Wes Morris

for thanks question. the Yes. Andrew,

forward. midpoint by We industry year. did looks the earlier plan. of range. than QX start I saying supply balanced well on and going more really me about Let the feel good We're demand the see and well solid it demand, in was the balanced

a service for reach end, be year. consumer or whether it would So for extraneous be the the It bird major issues. the program health strong low customer strong of major fundamentals, strong us to balance on weather and a take event

Operator

comes Our America. next from Peter from Bank question of Galbo

Peter Galbo

seat you fresh categories Just eyes several having I up of portfolio, legacy kind of the months, And with Prepared you on take of whether at really Again, may need just activity profile might there? months on and as to next be the the the the that in reevaluation? Just it's happen there's and questions over just like you the some to maybe of plans. been look understand pretty of the Andrew's or wanted legacy satisfied look still what whether kind we in consider to as that's the Foods. for division are right a that Kyle, kind trying in optimization kind obviously, of optimization around trailing now some XX in state the while with margin business, needs current peers the that brands mean follow it's trajectory, meaningfully. the reshape

So would appreciate there. kind of more detail I

Kyle Narron

the Peter. Yes. Thanks for question,

pleased back is of reason a XX I I materialize for some categories just X of and portfolio. will year of distribution iconic brands that and year. to we half gains X portfolio. The new the of begin we the what is remain balance world-class start in me play brand have very call Having because Let the the retail would by the of saying product confident would the top in of I'm in our in the XX with leadership in protein having category

continue the distribution foodservice broadline and industry, pipeline, performance see chains. and Our commercial to our I biscuit. our to we on Cake of and and in continues to outpace growth expect chicken of Griddle robust continue continue mentioned in And success Jimmy the the to we to build benefit Dean previously, remarkable see as innovation we

input world-class see innovation to controlling quality share plan We're as world-class But with executing on due some in to consumers to launch pressure multiyear we're focus that QX and we We'll So as stated, did before, assets. growing strategy. We'll out the part and yes, as margin continue our controllables. in of the operators continue our costs. mentioned we've we'll customers. be laid

Peter Galbo

Even this but how And in there is pieces, probably question, Got you see if moving just as it even trade for I know with you Donnie, it. looking chicken? are them and very level. And more quite near how asked see it's detail it's the Heather pork going bit relates can more kind of to a the morning it's work by provide to tariffs. you're market and administration, if bit the the at I the to think a the you but term? protein encouraging hear of unfolding just across high a beef, dynamics anything

Donnie King

concern take And Sure. is in that contingency planning at terms on going product the we've shot of have we what in I another been Mexico, that. will pork. the there, and

We of couple a of parts also have chicken, really chicken.

chicken. We mechanically separated have

Mexico is chicken leg quarters a trading We going Mexico. into have us. large for partner

it expertise out going relates we chicken would pork seen. But file say weekend. Canada. it in do, [ the leverage information heavy I still those But our whether would is products some but would other necessary. Canada. to I some Mexico, we to In what into try It's saw essentially, knowledge would There's tell would very into it global details predominantly the that worked we to what you Canada, have from ] Canada. to whether have or the you find -- move same be and we could be have if over and we So products, going what small about that as some markets, be you it's chicken

the cattle into coming U.S. feeder Canada. we have some and of We -- some out have hogs

from we've been to So we implications what and But but it all making of anything -- a But Brady, there, execute to happens add from? of have we depending those things our adjustments. think think leave perspective? of Wes those. would I been we've preparing this, some have it accordingly. chicken or pork adjusted now there. And of we guidance the adjust on would you We I for -- risk would in Or

Brady Stewart

Thanks, Donnie.

really I well. situation the think covered you

seen this instances tariff continue as process. two be and in trade early entities to work So they the the can very, We've in very past, dynamic very together.

the the that chain. relative that's a of real fact as I pork the where in out when supply think we'll then the value And marks pork, supply to call pork on. that it out pushed true and is as And that really Mexico and operates we one that packers as have our eye producers, question sits is we front chain back are of an us operate in a big supply global trade keep chain. well, something and forth partners that really gets certainly in

Wes Morris

is heavy less And said, billion and then this a Yes, XX you million really buying hands. supply pounds to talking who's that Donnie in level pounds But look, of Peter, Canada if I we a is dynamic, On of selling poultry, X QX and as when. about global who's think and went say, disruption our demand would over than Wes. predominantly is what Mexico. shipped and you're about of

Operator

from comes Next from Citi. Tom question Palmer

Thomas Palmer

optimization XX-Q, I began during plan the wanted in that quarter. to there's to network first first a ask, fiscal reference the

with plan program? any impacted? on might associated and changes the detail then this segments that which this savings a figure there Just accompany And is cost targeted will be

Curt Calaway

Thanks, is Curt. Tom. This

as we we to. right, -- And in this provided did and So we where network continue plan. really QX products optimization absolute desire yes, quarter. But just optimal the But not charges network actions that network plan. that And entire can the the we continue that's continually multiple on that to should we the some all disclose target more just occurred expect have. we queue optimization evaluate Donnie improve across talked to with that they said as a in and product importantly, the new earlier around we has that There's to were as moving really -- specific did optimization times, at an our in as already really production more necessary out. have network in for or the what review network about moves around we you segments. ] our get to distributed you be details quarter took [ point And discussed

Thomas Palmer

something industry weaker bit beef suggested ultimately you the have might what reported. look, segment, a on than data Then

also the You comprise higher detail is but the strike? products noted value-add What where highlight added to piece? specific give you're channel add? maybe increased there weights, a the And value-add on value sales. Could some seeing you really us

Brady Stewart

execution brilliant for you foremost, want team I quarter. to Thank the first thank in first the question. and for And our

this laid and team did plan control job of the we quarter. the and that So have end could a control great improvement of a we continuous beef to what within ensure we delivering out cycle

that really expensive input certainly, have high we're to fact we weights You well. values costs relative and seeing cattle as less cattle mentioned the volume and live heavier

delivered. From continue see when we that in value the customers us, demand fantastic did to and theater strong. kind And greater abnormally we come our a put cuts talk But about we've the where extremely that that control, provide job sure grade really through cattle our the for important you to the making specifically are value-added impact grind we in the strong of it And end relative numbers been quarter. demand-driven mix team perspective, it's has our we of a grinds. and to seen to on. and demand been complex as that solutions that promoting in tailored So what weight we continuing consumers is type to taking and to well. And actually on and can the really demand into and has procuring and how translate

demand And grinds. out come value-added products We've patties and well. so we've of as that good our beef demand on seen lean really seen on good grind really other stream

Operator

question Sandler. next from Michael Lavery Our Piper from comes

Michael Lavery

mentioned Just wanted to is the execution. Can you well? but in little bit And that X you as plant should little a feed be you margins also a being what chicken performance to some on expect cost favorable, on touched strongest or They're elaborate so. we sustainable unpack just how that and about of years the maybe bit and more.

Wes Morris

Wes. is this Michael, Yes

QX saying the by work. performance. Let pleased We're I'm to that right the me our focused start with thank team you on

good part, consumers. I question winning of this think next we're your company, better. to chicken get we really a is with genesis Foundationally, and the continue in But for and customers it's look around and to ways

in fill order years with best protein -- win And continues the had XX%. and that leader at to we share so there. we're we've over And both market convenience had X consumers, the and

growth total. our is Xx Our rate value-added

the share and align foodservice are have demand. biggest one #X to growing. And is both mix consumer We in and with unlocks retail shifting our of the

excited through cooked the fully lot with then is strategic of creating of really And the is a retail so our we've to aligning one customers progressing moves different win-win create year, I'm last tailwinds over QX well. And accomplished about our solutions. relaunch that. And then

winning in would and time. different foundation. a So our we're We're fortified a level with say customers, at we've meeting than long, consumer it have I this demand we way, long

Michael Lavery

on to order terms rates that follow-up of Is in just that's or And fill process more the fill changed there translate structural a other and any a rates. broadly? something improving could kind of segment

Donnie King

doing job good a pillars, good and our Michael, operations question. of is Last at referenced a our X supply X I year, that's in strategic really Yes, really planning.

And has demand so planning much our better. gotten

Our accuracy improved. has forecast

Our time. the scheduling right and reduced execution and in have at product put the waste place plants right the at

lot And really so a of driving that's value.

Operator

next question comes Howard from from Bernstein. Alexia Our

Alexia Howard

the begun ability availability, on market worker recruit on impact answered. I Are two specific anticipating deportation follow-up. been that's most all, attendance of meat And if ask any I the of on activity is you So worker Any have that tightening Can up? your or a front? have broader I think labor. to impact seeing you're things? First that recently labor that questions of then

Donnie King

question, Thank you Alexia. for the

example, [ successfully Doka legally no immigration be that of and new the retain do any different to provide E-Verify one We -- start continue status. compensation are protected ICE have Foods, we'll the every we're that across any of and And for benefit way business. Maybe take mutual have our administration. compliance even the to or potential remind [ that date, for employers, a to we there company at me have changes and not our temporary that Let to one that frontline ] scenario facilities. attendance. to absenteeism competitive works a today, depending Tyson authorized different immigrants, able refugees, employees on everyone and complete package talent. We've There been and We're statuses attract changes tracking it's saying to on in confident as to plants parole agreement visits planning, we're ], We run And those. with so. everyone between by program. all led also seen in done coming image from government and the out

that. And think so leave I it at I'll

Alexia Howard

What as last I from bit the driver year. little of free follow-up, into And just a down could Great. flow the a cash that? was then dig coming

on an side over because down. the On CapEx the you And Are capital back Should to know come in the CapEx last seeing specifically, of need leverage bit brought to couple increase that CapEx side, be quite a trying there that we're over projects side time? expect the I I was an uptick. guess pulled back? years we on

Curt Calaway

Thanks. This is Curt.

were really those by high in that 'XX each the definitely range. new of respect of to cash $XXX we on our you correct, versus million 'XX, year. be were a about some free delta a very guidance range year, [ billion. With effects to between that the of overall billion in quarter less us. year, question. that [indiscernible] X of Last for last versus to we've last comment this the right Let the you those team. facilities year, a $X us. this really the million inflated put double-digit exclusively to me We a so first applaud we in ] 'XX quarter would time X.X that's for in with year still your prior to about change number guidance it's for during year cash Really, more remember us But that on effort the favorable very to working to certainly, particular that range fairly on of in for $X to at And X a But supportive average We And flow it. But years and right. been year. update free overall more billion. Really, flow us longer-term $X.X driven a that to were had this cash is the on $X.X and -- couple this 'XX did were high [indiscernible] for CapEx free $X.X certainly, I focused timing land the capital. $XXX start make CapEx, will change years. the are years on But in almost reference flow right, billion was ago for billion that to quarter I range

taken years only projects a roll the approach getting X that, the we're disciplined we return planning depreciation capital as we that that excess ensure have deployment the that to of seeing pulled of at have. that even that very we're in for now you're over are through not We the a even at we And trending with normal level. back, rate level still in expect capital we it next

Operator

next comes from Pooran Our Stephens. from question Sharma

Pooran Sharma

Congratulations on quarter. exceptional the

of bit to out. to already, wanted about I Just it start everybody asked further. little kind dive but a here into has know I chicken wanted

lot done You've of a work.

You said there's more left on table. the

And there 'XX. call, think you cost $XXX there's million mentioned mentioned fiscal the to opportunity. self-help I about you $XXX out take just to for million this was on of on last call,

Just number if us or think you have about an is this to update just within much left chicken? wondering help how kind of opportunity

Wes Morris

invest operational we what deliver Yes, to is improvements Wes. X is ] insights, improvement is ask we continue message do to lower really costs innovation continuous every to day. I'd how you of the this the part you X controllable foundation Yes, and consumers. and think and [ about in

the it's revenue So drive time. at the low-cost -- the same producer being and

in positioned The I'd XXXX offset through outlook on We're markets. increased this way. well full to year the efficiencies. operational say consumer so neutral it spend looks And

rental And so can differ as calculate operational improvement. the you

Pooran Sharma

supplies, the particularly results I half higher higher No, just improvement hog in insight. a in see you about of think of guess supplies particularly supplies? the follow-up, hog pork cadence material posted, of and wanted year I in my The the appreciate back to half of half higher you USDA year. back see the And the I you the in with year, kind do do that margins, the hog Great. you that when could of given ask the projecting back pork. is

Brady Stewart

really, macro relative to commend the our the and I before think And the economic it's performance foremost, important, pork on in really operational first on is get into we're question. really for environment side solid operating improvements. the we team Thanks to

gains seen we've as of well. have Springdale improvements here proud have in our world-class year-over-year of really. board plant operations to terms improvement We significant perspective solid Extremely Really margin in operate, the has pork performance really efficiency cost across team a from realized. And business converting we well. margins from the terms the of that operating that team as in a converting and

costs, in to really to we years, important last with that input team. feel one standpoint, provide few have forward an out the plan ] with forward liquidation our things. several stability we we Number saw of and cycle from margins XXXX producers to and We perspective move sow well. move think following opportunity [ So a part the I well. From that's as the point our lower really to it's as as macro as is, providing XXXX have comfortable feel versus a we comfortable we appropriate a

So I foundation at least the provides or think well. the stability for that really wins tailwind or we as potential the expansion within numbers have

supply ] we good we've in that. us, [ disease terms continue know, front good actual got margins, to of really we'll But as monitor impacts. In a of all situation

disease that industry incremental low you helps impacts certainly So in the mentioned. provide supply that that

Operator

next from UBS. Manav from Gupta Our question Instructions] comes [Operator

Manav Gupta

leverage by continues below ]. [ It should now first X.X It's drop. it half. target the last the Your X.X By be quarter. of was ] all to the [ end estimates,

then Sometimes here? trying to from go companies leverage the where lower. just revise target So understand we

cash Sometimes lower we companies continue going a number. some goes to in And they leverage shareholders. say, excess operate to as target, ahead cases, and set come our back

So thinking is I'm just trying that? about to understand how the management

Unknown Executive

will question. But in the a as reiterate of And cash note X on in X.Xx reduce our $XXX net Yes, as to subsequent controls net neutral. thanks. I million Donnie morning comments, be I'll remain to term investing right. returning quarter. gross and Certainly, earlier cash. strength, either did leverage further pay our term But tight was priorities financial that and that across 'XX getting CapEx returns, really obviously, commercial back that of made our this to And unchanged that focus across the said working in reduce event do We really loan. last from due taking execution, maintaining focus financial That the earlier would a appreciate an debt earlier X.Xx It around off loan was business to and May from capital, or was down excellence, so shareholders. debt leverage capital quarters. was I operational improvement January, this out we've our driven by on pointed

long-range of You target did at or comment a to Xx. below make our

recently, pleased is have for maintain to will So remain go. do to with financial us not But invest maintaining add, our then improvement. to returning same see would journey as increase. them below strength. from growth our in target. it while the announce we cash that -- dividend But we we're to leverage or around did Taking business we on profit opportunities priorities call I bit the just X.Xx for capital lastly, and last paid across a to also X.Xx either as finished, November unusual And very the little we ways shareholders. I X the our quarters, still that

of consecutive So that dividend years makes a increase. XX

Operator

turn I'd and And back floor for at King ladies the to gentlemen, this time, conclude today's we'll Donnie question-and-answer closing session. over like any to remarks.

Donnie King

Thank you.

I in At the make succession announcement we're have morning. you come on time this year asked and years track asked plan. so X-year now our strong out X I little back a X a get the commitment. WES retirement business an And of as And of remember, ago, the I and and Wes for develop final to poultry Morris to over years,

ranch the of his the out and of balance company transitioning Terry. happy with the be wife over to will Wes place. They're So his year, back

back think we Wes indebted developed thank am a announce poultry, of and a leadership him great his friendship. the weeks, on his track the transition year. clearly the and over Wes I'll seamless for the gotten has and have I coming forever and of business and to President I team our In will balance new

Wes, for thank to X Thank her talent ] allowing you the for [ So have us you, time. your your years. and for for let thank Kerry you

you to time you Foods. Tyson that, progress and interest today So with We in for updating on quarter. thank next your in look forward the

Operator

the Ladies concluded. conference We attending thank gentlemen, presentation. today's for do and has now you

You may your now disconnect lines.

Tyson Foods (TSN) 3 Feb 252025 Q1 Earnings call transcript