In its recent third quarter sales and financial report, Tyson Foods announced it was closing four chicken processing plants including two in Missouri and one in Arkansas.
“While current market dynamics remain challenging, Tyson Foods is fully committed to our vision of delivering sustainable, top line growth and margin improvement,” stated Donnie King, president and CEO, Tyson Foods, in the filing. “I’m encouraged by the improvements we made this quarter, including our Tyson core business lines that continue to outpace our peers in volume growth.”
“The difficult decision to close four chicken facilities in North Little Rock, Arkansas;, Corydon, Indiana;, Dexter, Missouri;, and Noel, Missouri, demonstrates our commitment to bold action and operational excellence as we drive performance, including lower costs and improving capacity utilization, and build on our strategy of making Tyson Foods stronger in the long-term.”
In the quarterly report Tyson noted the U.S. Department of Agriculture projects chicken production will increase 3% in fiscal year 2023 as compared to fiscal year 2022 and that and that will mean adjusted operating margin of (minus 1%) to1% for fiscal year 2023.
“We expect to shift production to other facilities and cease operations at the impacted locations in our first two quarters of fiscal 2024. We continue to evaluate the financial statement impact of the closures for charges related to contract terminations, impairments, accelerated depreciation, severance and retention,” the company stated in its release.
“Based on our preliminary analysis, we currently estimate total charges of $300 million to $400 million which will be recorded through the planned closure dates.”
Overall, the company reports sales of $13.14 billion for the third quarter, which was 3% below the same quarter a year ago ($13.495 billion).
Beef sales for the quarter was at $4.956 billion, chicken was at $4.212 billion and pork at $1.324 billion. In other categories, prepared food was at $2,383 billion and international was at $633 million.
Dave Bergmeier can be reached at 620-227-1822 or [email protected].
