Tyson Gets Beef for Big Earnings

Feb 15, 2022

Demand in the meat market has Tyson turning top dollar, according to their first-quarter earnings report.

But with operating income up 40% in the first quarter, Tyson finds themselves walking a fine line between shareholder success and government scrutiny.

Something to cluck about. This quarter, Tyson saw:

  • Shares increase 12% to $99.20
  • Average sales price increase 19.6% compared to the same period last year
  • Chicken alone had 37% higher sales year over year
  • Transportation, grain costs, and other goods cost increase 18%

Not to mention: Total sales were up 23.6% year over year to $12.9B, yet sales volume increased by less than 1%. John Tyson, the man himself, saw the stock surge raise his net worth to $3.3B.

Sound bite: “…in an economy where both wage growth and supply chain bottlenecks are driving inflation, businesses that sell things that people want cannot only deal with the higher costs, but thrive from them,” said Jamie Powell of the Financial Times.

That luck is self-made, according to Tyson representatives who say better execution coupled with rising meat demand has delivered.

Catch-22: Tyson’s announcement exceeded expectations, a good sign for investors. On the flip side, their financial results seem to play into the hands of those who believe meatpackers are “pandemic profiteering” or using industry consolidation as a pricing advantage to the detriment of farmers and consumers.

Meat manipulation: Tyson and JBS have both recently settled in price-fixing class action lawsuits. And the Biden administration has announced plans to spend $1B and create new rules to address a lack of competition in the meatpacking industry. The steaks are high with these financial results.