Tyson Foods, Inc. TSN posted splendid fourth-quarter fiscal 2024 results, as the top and bottom lines increased year over year and beat the Zacks Consensus Estimate.

Tyson Foods reported a strong enhancement in profitability for both the fourth quarter and the full year, alongside solidifying its financial status through robust cash flow and a significant decrease in net leverage. Management believes that TSN’s diversified multi-protein, multi-channel portfolio, skilled team, strong brands and commitment to operational excellence provide a solid foundation for growth in fiscal 2025 and beyond.

TSN’s Quarterly Performance: Key Insights

Tyson Foods posted adjusted earnings of 92 cents per share, which crushed the Zacks Consensus Estimate of 64 cents. The bottom line increased considerably from the year-ago quarter’s reported figure of 37 cents.

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Total sales of $13,565 million increased 1.6% from the year-ago quarter figure. The top line surpassed the Zacks Consensus Estimate of $13,326 million. Average price changes had a 0.2% positive impact on the top line, while total volumes grew 0.5% year over year.

The gross profit in the quarter was $1,060 million, up significantly from the $459 million reported in the year-ago period.

Tyson Foods’ adjusted operating income soared considerably to $512 million from the $236 million reported in the year-ago period. The adjusted operating margin expanded to 3.8% from 1.8% recorded in the year-ago quarter.

Decoding TSN’s Segmental Details

Beef: Sales in the segment increased to $5,261 million from $5,029 million reported in the year-ago quarter. Volumes rose 3.7%, and the average price jumped 0.9% in the segment.

Pork: Sales in the segment declined to $1,438 million from $1,494 million reported in the year-ago quarter. Volumes rose 3.2%, but the average price dropped 6.9%.

Chicken: Sales in the segment improved to $4,251 million from $4,155 million reported in the year-ago quarter. Sales volumes decreased 0.7%, while the average price was up 0.2%.

Prepared Foods: Sales in the segment came in at $2,472 million, down from $2,502 million reported in the year-ago quarter. Prepared Foods’ sales volume dipped 1.4%, and the average price rose 0.2%.

International/Other: Sales in the segment were $609 million, down from $636 million reported in the year-ago quarter. Volumes jumped 1.3%, whereas the average sales price fell 5.5%.

Tyson Foods’ Other Financial Updates

The company exited the quarter with cash and cash equivalents of $1,717 million, long-term debt of $9,713 million and total shareholders’ equity (including non-controlling interests) of $18,514 million. For the 12 months ended Sep. 28, 2024, cash provided by operating activities amounted to $2,590 million.

Liquidity was nearly $4 billion as of Sep. 28. Management expects liquidity to stay above the company’s minimum target of $1 billion in fiscal 2025. Tyson Foods projects capital expenditure to be nearly $1-$1.2 billion for the fiscal. Free cash flow in fiscal 2025 is expected to be greater than dividends.

With effect from Nov. 8, management hiked its quarterly dividend to 50 cents per share for its Class A shares and 45 cents for Class B shares. The raised dividend is payable on Dec. 13, 2024 to shareholders of record as of Nov. 29. This results in an annual dividend rate of $2.00 for Class A and $1.80 for Class B shares in fiscal 2025, representing a 2% hike from the fiscal 2024 levels.

What to Expect From TSN in FY25?

For fiscal 2025, the United States Department of Agriculture (“USDA”) suggests domestic protein production (beef, pork, chicken and turkey) to increase from the fiscal 2024 level.

For the Beef segment, the USDA projects domestic protein production for beef to decline nearly 2% year over year in fiscal 2025. For Pork, the USDA projects domestic production to jump nearly 2%. For Chicken, USDA expects projects domestic protein production to grow about 3% year over year. Management anticipates improved adjusted results from the company’s foreign operations during fiscal 2025.

Total company revenue growth is anticipated to come in the range of decline 1% to flat in fiscal 2025 versus fiscal 2024 levels. Adjusted operating income is envisioned in the $1.8-$2.2 billion band.

Segment-wise, management expects a fiscal 2025 adjusted operating loss in the band of $0.4-$0.2 billion for the Beef segment. For the Pork, Chicken and Prepared Foods segments, Tyson Foods envisions fiscal 2025 adjusted operating income of $0.1-$0.2 billion, $1-$1.2 billion and $0.9-$1.1 billion, respectively.

This Zacks Rank #4 (Sell) stock has dipped 2.5% in the past three months against the industry’s 3.1% growth.

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