Tyson Foods has raised its guidance for Chicken Adjusted Operating Income (AOI) to a range of $1 billion to $1.3 billion, reflecting strong first-quarter performance and ongoing operational improvements. The company

attributes this upward revision to enhanced execution, cost efficiencies, and favorable market conditions in the poultry sector.

Beef segment guidance remains unchanged, with expectations of a loss ranging from $400 million to $200 million. Persistent challenges in cattle supply continue to pressure the segment, but Tyson remains committed to navigating these difficulties through strategic sourcing and operational discipline.

Prepared Foods AOI guidance is maintained at $900 million to $1.1 billion, driven by ongoing efficiency gains, successful innovation, and strong consumer demand for value-added products.

Tyson has also updated its free cash flow expectations, now projecting a range of $1 billion to $1.6 billion for fiscal 2025. This adjustment reflects strong cash generation from operations, disciplined capital allocation, and ongoing efforts to optimize working capital.

Management has emphasized a continued focus on operational execution, innovation, and strategic customer partnerships as key drivers for achieving these financial targets.

Financial Results

Tyson Foods reported robust financial performance in the first quarter of fiscal 2025, driven by improvements in the Chicken segment and stronger-than-expected results in Beef.

• Q1 Adjusted Operating Income (AOI): Increased by 60% year-over-year, supported by improvements in chicken profitability and cost efficiencies.
• Adjusted Earnings Per Share (EPS): Rose by 65%, reflecting operational discipline and lower input costs, particularly in the Chicken segment.
• Chicken Segment Performance: Delivered its highest quarterly adjusted operating income in eight years, driven by lower grain costs, improved plant operations, and enhanced demand planning.
• Prepared Foods: Maintained steady margins despite timing-related cost pressures. Growth was fueled by innovation, increased distribution, and brand strength.
• Beef Segment: Exceeded expectations despite ongoing headwinds in cattle supply, benefiting from disciplined cost management.
• Liquidity and Debt Management: The company ended the quarter with $4.5 billion in liquidity and repaid a $750 million term loan, further strengthening its financial position.

Q&A Highlights

During the Q&A session, analysts posed critical questions regarding Tyson’s outlook and strategic initiatives:

• Heather Jones (Heather Jones Research): Asked about key investor takeaways. CEO Donnie King highlighted the company’s strong Q1 performance, the strength of its multi-protein portfolio, and the raised guidance. “Chicken had the best Q1 adjusted operating income performance ever,” King noted.
• Ben Theurer (Barclays): Inquired about potential tariff impacts. King reassured that Tyson has robust contingency plans in place and that risks have been factored into the updated guidance.
• Andrew Strelzik (BMO): Asked about cost pressures in Prepared Foods. Group President Kyle Narron pointed to operational improvements, increased distribution, and product innovation as key strategies to manage cost headwinds.
• Michael Lavery (Piper Sandler): Sought clarity on chicken margins. Wes Morris detailed how better demand planning, improved execution, and a relaunch of fully cooked retail products contributed to the segment’s success.

Sentiment Analysis

Analysts expressed optimism about Tyson’s operational improvements, particularly in the Chicken and Prepared Foods segments. However, concerns remained regarding potential tariff impacts and ongoing challenges in the Beef segment.

Management maintained a confident tone, emphasizing strong execution and clear strategies for growth. Nevertheless, questions about tariffs and cattle supply led to slightly defensive responses, as King underscored the company’s adaptability and contingency planning.

Compared to the previous quarter, sentiment among analysts was slightly more positive, reflecting increased confidence in Tyson’s ability to execute amid challenging market conditions.

Quarter-over-Quarter Comparison

• Tyson raised its fiscal 2025 guidance, indicating increased confidence compared to Q4 2024.
• Chicken segment guidance saw a notable increase, while Beef and Pork outlooks remained unchanged.
• Management reinforced themes of operational excellence and innovation, consistent with previous earnings calls.
• Analysts’ focus slightly shifted toward tariffs and supply chain disruptions, reflecting current geopolitical uncertainties.
• Overall sentiment improved as Tyson demonstrated consistent profitability and reduced leverage.

Risks and Concerns

While Tyson’s performance remains strong, several risks and concerns were highlighted:

• Tariff Risks: Potential impacts on pork and chicken exports to Mexico and other markets remain a concern. Management assured that contingency plans are in place to mitigate disruptions.
• Beef Segment Challenges: Limited cattle supply continues to pressure the segment, with no clear signs of herd rebuilding in the near term.
• Input Cost Inflation: Analysts raised concerns about input cost inflation in Prepared Foods and its potential impact on margins. Management remains focused on efficiency initiatives to offset cost pressures.

Final Takeaway

Tyson Foods delivered a strong start to fiscal 2025, with significant growth in adjusted operating income and earnings per share. The company raised its full-year AOI guidance to a range of $1.9 billion to $2.3 billion, underpinned by record performance in the Chicken segment and operational efficiencies in Prepared Foods.

Despite ongoing challenges in Beef and potential tariff impacts, management expressed confidence in achieving its fiscal 2025 targets through disciplined execution, innovation, and strategic customer partnerships.

CEO Donnie King highlighted, “Fiscal 2025 began with strong performance, driven by exceptional results in the Chicken segment, which achieved its best first-quarter adjusted operating income in eight years. Beef and international operations exceeded expectations, while Prepared Foods maintained solid profitability.”

CFO Curt Calaway added, “We generated $1 billion in operating cash flows and reduced our net leverage ratio to 2.3 times,” underscoring the company’s strengthened financial position.

With raised guidance, operational efficiencies, and continued focus on execution, Tyson Foods is well-positioned to navigate market challenges and drive long-term shareholder value.