USA – Tyson Foods is increasing its annual sales outlook for fiscal 2025 after reporting stronger-than-expected first-quarter earnings, driven by steady demand for beef and chicken.
The company now projects sales to remain stable or grow by up to 1%, revising its earlier forecast of flat to a 1% decline.
Tyson has also raised its annual income forecast to between US$1.9 billion and US$2.3 billion, up from its previous estimate of US$1.8 billion to US$2.2 billion, citing lower animal feed costs and internal cost-cutting measures.
A slow but steady rebound in restaurant traffic has contributed to Tyson’s wholesale business, supplying fast-food chains and upscale dining establishments, while at-home meat consumption continues to drive retail demand.
Despite tight cattle supplies, beef sales have remained strong even as prices stay elevated, supporting Tyson’s largest business segment.
Sales in the company’s beef division rose 6.2% in the quarter ending December 28, with prices increasing by 0.6% and volumes up 5.6%.
Chicken sales saw a marginal increase of 0.8% in the same period.
Overall, net sales grew by 2.28% to US$13.62 billion, surpassing analysts’ projections of US$13.44 billion, according to data from LSEG.
On an adjusted basis, Tyson reported earnings of US$1.14 per share, exceeding expectations of 88 cents per share.
Tyson’s European Acquisition plans
As Tyson revises its financial outlook, Sweden-based Scandi Standard is acquiring poultry processing equipment from the company’s Netherlands facility, which was damaged in a fire last year.
The deal includes two production lines for breaded poultry products at the Oosterwolde facility in the northern Netherlands, though the financial terms have not been disclosed.
Scandi Standard estimates it will invest approximately US$28.6 million to restore the damaged production lines.
The company expects operations to resume by the third quarter of this year.
With this acquisition, Scandi Standard aims to expand its ready-to-eat poultry production by 90%.
CEO Jonas Tunestål said the European frozen breaded poultry market is evolving towards a more integrated supply chain, prompting the company to extend its reach beyond its traditional Nordic market.
He acknowledged that demand for frozen breaded poultry declined slightly due to COVID-19 and inflation but is expected to rise in the future.
Cost efficiency remains a key factor in the breaded poultry sector, where quick-service restaurants prioritize consistent quality and backup capacity in case of supply disruptions.
Scandi Standard had previously planned to invest US$30.6 million in a Danish facility, which would have expanded capacity by 20% by 2027, but the Netherlands acquisition has replaced that project.