Tyson shuts down chicken plants, scrambles to cut costs amid rising expenses.
Tyson Foods Inc. to Close Four Chicken Processing Plants
Tyson Foods Inc. is taking steps to lower costs by closing four chicken processing plants. The plants being closed are located in North Little Rock, Arkansas; Corydon, Indiana; Dexter, Missouri; and Noel, Missouri.
Tyson plans to shift production to other facilities and halt operations at the four plants in the first two quarters of fiscal 2024. The company estimates total charges of $300 million to $400 million based on a preliminary analysis.
In fiscal 2022, Tyson launched a plan to achieve $1 billion in productivity savings by the end of fiscal 2024. The company exceeded expectations by realizing over $700 million in savings in fiscal 2022, partially offsetting the impacts of inflationary market conditions. Tyson surpassed its $1 billion target in the second quarter of fiscal 2023, more than a year ahead of schedule.
In May, Tyson posted a surprise loss in its second quarter and reduced its sales forecast due to the costs associated with plant closures and layoffs.
Over the past several months, Tyson has been actively cutting costs. It closed its corporate offices in Chicago and South Dakota last year and consolidated its workforce in Arkansas. In March, the company announced the closure of two plants in Arkansas and Virginia to optimize available capacity at other facilities.
As it faces steep inflation on labor, grain, and other inputs, Tyson laid off 15 percent of its senior leadership and 10 percent of its corporate workers in April.
Fiscal Third-Quarter Financial Results
Tyson also reported its fiscal third-quarter financial results. The company posted a loss of $417 million, or $1.18 per share, for the period ended July 1. This is a significant decrease from the $750 million, or $2.07 per share, it earned in the same period a year earlier.
The current quarter included a goodwill impairment charge of $448 million.
Excluding asset impairment charges and restructuring costs, Tyson earned 15 cents per share. This falls short of the 34 cents per share expected by analysts polled by Zacks Investment Research.
Revenue for the quarter totaled $13.14 billion, down from $13.5 billion in the previous year.
Tyson still expects fiscal 2023 revenue in the range of $53 billion to $54 billion, while analysts surveyed by FactSet anticipate revenue of $53.74 billion.
Shares of Tyson dropped 8 percent before the market opened.
The Western Journal has reviewed this Associated Press story and may have altered it prior to publication to ensure that it meets our editorial standards.
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