Winner Winner, Chicken Dinner: Tyson Foods Q1 Beat Showcases 'Improved Execution' In Poultry, Says CEO

Tyson Foods Inc. TSN reported better-than-expected first-quarter results, driven by robust performance in the chicken sales segment. This marks the company’s third consecutive quarter of annual growth across key metrics.

What Happened: The company reported earnings of $1.14 per share beating the Benzinga consensus estimate of $0.88 by 29.5% and sales of $13.62 billion, 1.21% above the estimated $13.46 billion for the first quarter of fiscal 2025.

"Our best quarterly performance in more than two years reflects improved execution across the business, including exceptional results in chicken," said president and CEO Donnie King.

The management during its earnings call highlighted that its diversified multi-protein portfolio delivered results, with chicken helping to offset the ongoing challenges in beef. Achieving the best adjusted operating income of any quarter over the past eight years in the chicken segment.

The company’s value-added products like Jimmy Dean griddle cakes and chicken biscuits gained traction as chicken also continued to be a “bright spot,” with sales increasing due to higher volumes in these foodservice channels, explained the company CFO Curt Calaway.

Calaway raised adjusted operating income guidance for the segment to $1 billion to $1.3 billion for fiscal 2025, given the chicken’s strong first-quarter performance.

Highlighting the concerns regarding the trade war with Mexico, King added “Mexico is a large trading partner for us. So, essentially, what we would do, whether it be pork or whether it would be chicken, is we would find other markets.”

Why It Matters: Despite strong growth in the Chicken segment in the first quarter, the Centers for Disease Control and Prevention (CDC) on its website highlighted that H5 bird flu is widespread in wild birds globally, causing outbreaks in poultry and U.S. dairy cows, with recent human cases in U.S. farm workers. The public health risk remains low, but the CDC is closely monitoring the situation and people exposed to animals, using its flu surveillance systems.

CDC’s weekly scientific reports are on hold due to an "immediate pause" on communications by federal health agencies, ordered by Dorothy Fink, acting secretary of the Department of Health and Human Services. CNN reported that Fink’s memo, issued on President Donald Trump's first full day in office, requires any publication to be reviewed and approved by a presidential appointee.

Price Action: Shares of Tyson Foods rose 2.21% to end Monday at $57.74 apiece. It fell by 0.24% in after-hours. The exchange-traded fund tracking Russell 2000, iShares Russell 2000 ETF IWM declined 1.17% to $223.83 on Monday.

The average price target among 17 analysts tracked by Benzinga is $61.38 with a ‘sell' rating. The estimates range from $45 to $75 apiece. Recent ratings from Barclays, UBS, and Piper Sandler suggest a $65 target, implying a potential upside of 12.85%.