(Reuters) – Tyson Foods Inc on Monday posted first-quarter sales and profits that beat market expectations, offering the first signs that demand for its meat products is starting to recover as inflation concerns ease.
The company's adjusted earnings per share were 69 cents, compared to analysts' expectations of 41 cents.
The U.S. meat packer's net sales rose 0.4% to $13.32 billion, beating analysts' expectations of $13.27 billion based on LSEG data.
Tyson shares rose about 5% in premarket trading.
Last year, as inflation remained high, customers refrained from spending on expensive meat products, but grocery prices have started to soften from their peak.
Still, Tyson said he continues to evaluate the business after closing a U.S. chicken plant last year.
“The excellent results we achieved in the first quarter and our operating performance influence our thinking, but we continue to consider all options,” Tyson Chief Financial Officer John R. Tyson said in an interview. he said.
Tyson's overall adjusted operating profit decreased 9.2% in the quarter due to limited cattle supply in the United States.
Its largest beef division posted an adjusted operating loss of $117 million in the quarter, compared with adjusted operating income of $129 million in the year-ago period.
The division's sales increased by 10.5% due to price increases and increased by 6.3%. However, sales volume he decreased by 4.1%.
Tyson's chicken division, where prices hit record highs in U.S. grocery stores last year, reported a 1.5% decline in sales volume while prices fell by about 4%.
Over the past year, the company has closed chicken plants, consolidated operations and laid off employees in an effort to cut costs. Adjusted operating profit for the chicken division was $192 million, an increase of almost 150% year over year.
Volume in Tyson's pork division increased 7.7% from a year earlier, while volume in its packaged foods division, which makes Ball Park hot dogs and Jimmy Dean sausages, rose 2.5%.
Tyson continues to expect full-year 2024 sales to be relatively flat.
(Reporting by Granth Vanaik in Bangalore and Tom Polansek in Chicago; Editing by Krishna Chandra Elli)
