Tyson Foods, Inc. Q1 FY2026 earnings call

• Strategic Focus: Diversified protein-centric company, driving operational excellence, investing in branded portfolio and innovation. • Q1 Results: Sales over $14 billion, segment operating income changed to exclude corporate expenses and amortization. • Market Performance: Retail branded products grew 2.5% volume and 3.6% dollars, outperforming category; food service with share gains and volume growth. • Product Innovation: Removed synthetic dyes, high fructose corn syrup, etc., in U.S. branded portfolio to meet consumer preferences.

Prepared Foods: Sales up 8.1% vs last year, segment operating income $338 million, up $16 million, driven by volume, channel mix, and pass-through pricing. Chicken: Segment operating income $459 million, margin 10.9%, sales growth 3.6% due to volume, fifth consecutive quarter of volume and net sales gains. Beef: Segment operating income declined due to higher cattle costs offsetting cutout values; changes to production footprint made but not in Q1. Pork: Operating income margin increased 220 basis points to 6.7% from network optimization and operational efficiencies. International: Continued momentum, segment operating income expected $150-$200 million in 2026.

• Sales: Expected up 2%-4% year-over-year. • Segment Operating Income: Prepared Foods $1.25-$1.35B, Chicken $1.65-$1.9B, Pork $250-$300M, Beef loss $500M-$250M, International $150-$200M. • Free Cash Flow: Range $1.1-$1.7B, improved due to working capital improvements. • Capital Allocation: Disciplined, focusing on financial strength, business investment, and shareholder returns.

• Beef Segment: Tight cattle supply, volatile cattle costs, cutout values, and manufacturing cost structure challenges. • Market Volatility: Dynamic macro environment affecting demand and pricing for protein products. • Regulatory and Supply Chain: Issues like screwworm in Mexico impacting border operations and supply chain dynamics.

Q: Rationale behind segment reporting change and impact on free cash flow A: Donnie King and Curt Calaway explained the change was to simplify business assessment and drive growth, with free cash flow improved due to working capital and capital structure efficiencies.

Q: Prepared foods pricing and profit margin A: Net sales up 8% due to mix of volume, channel mix, and pass-through pricing, with pricing catching up to raw material increases.

Q: Beef segment trends and capacity closures A: Devin Cole discussed challenges in beef segment, including cattle costs and cutout values, with capacity closures not reflected in Q1 but expected to improve future performance.

Q: Chicken industry outlook A: Donnie King mentioned positive outlook for chicken due to strong demand, manageable supply growth, and strategic customer relationships.

Q: Corporate amortization and margin savings A: Curt Calaway stated corporate plus amortization down due to team member cost reductions and amortization adjustments.

Q: Beef plant closure impact A: Devin Cole said closure changes not fully reflected in Q1 guidance, with focus on improving capacity utilization and operational efficiency.

Q: Product reformulation and consumer response A: Kristina Lambert discussed reformulations to meet consumer preferences, balancing quality, cost, and pricing, with positive consumer response expected.

Q: M&A and capital allocation A: Curt Calaway stated capital allocation focuses on financial strength, business investment, and shareholder returns, with M&A considered selectively.

Q: Beef market dynamics and screwworm impact A: Devin Cole discussed beef market challenges and limited insight on screwworm impact on border reopening.

Q: Operational improvements and future opportunities A: Donnie King emphasized ongoing efforts to improve capacity utilization, growth, and efficiency across all business facets.