The company reported GAAP operating income of US$2.61 billion for the first half of the year, an 83% increase year-on-year. Adjusted operating income for the period was US$2.59 billion, up 47%.
For the second quarter alone, Tyson achieved GAAP operating income of US$1.156 billion, up 61%, and adjusted operating income of US$1.161 billion, up 57%.
Sales volume was up slightly (0.6%) for beef during the second quarter, which the company said was driven by strong global demand and offset by a challenging labour environment and continued supply chain issues.
Sales volume across the first six months of the year decreased by 2.9%, which again Tyson put down to these issues. Average sales price for beef increased in both the second quarter and full first half alongside increases in costs of live cattle, labour, freight and transportation.
Operating income in fiscal 2021 was reportedly impacted by a US$55 million gain from the recovery of cattle inventory related to a cattle supplier’s misappropriation of company funds.
Looking forward, Tyson points to the USDA expectation that domestic protein production should remain relatively flat against 2021. Following this, Tyson expects an adjusted operating margin between 11 and 13%.
The company is forecasting sales of US$52 to 54 billion in the full 2022 financial year, and a new productivity program is expected to save US$1 billion by the end of fiscal 2024, with more than US$400 million in 2022.
“Our performance in the first half of the year reflects our improving operational execution and strong customer and consumer demand for our brands and products,” said Donnie King, President and CEO of Tyson Foods.
“We continue to prioritise investment in our team members and business in a number of ways, including increasing pay, expanding pilots of health and childcare services, and providing skills and life services, such as free college education and legal services for immigration.
“Although we continue to see inflationary pressures across the supply chain, we are working to drive costs down by continuing to increase our efficiency, productivity, and bringing more capacity online.”
