Why Tyson Foods Shares Are Plunging Today

Tyson Foods Inc TSN reported a third-quarter FY23 sales decline of 3% year-on-year to $13.14 billion, missing the analyst consensus of $13.78 billion.

Sales volume of Beef fell 5.3% Y/Y, Pork declined 1.8%, Chicken climbed 2.8%, and Prepared Foods dropped 0.7%.

Gross profit plunged 57.9% from $1.6 billion to $677 million, with the margin contracting 670 basis points to 5.2%.

The company reported an operating loss of $(350) million compared to an income of $1.03 billion last year.

Adjusted EPS of $0.15 missed the analyst consensus of $0.34.

The company held $699 million in cash and equivalents as of July 1, 2023.

Adjusted EBITDA for nine months decreased 64.2% to $1.6 billion.

"The difficult decision to close four chicken facilities in North Little Rock, Arkansas, Corydon, Indiana, Dexter, Missouri and Noel, Missouri, demonstrates our commitment to bold action and operational excellence as we drive performance, including lower costs and improving capacity utilization, and build on our strategy of making Tyson Foods stronger in the long-term," said president and CEO Donnie King.

Outlook: Tyson Foods continues to see FY23 revenue of $53 billion - $54 billion versus the consensus of $53.63 billion.

The company expects FY23 capital expenditure of about $2.1 billion (prior $2.3 billion).

Price Action: TSN shares are trading lower by 9.00% at $51.37 on the last check Monday.