Tyson Foods said it sees current year earnings in the range of $5.30 to $5.70 per share, down from a prior forecast of $5.75 to $6.10, thanks in part to costs linked to a fire at its Holcomb, Kansas slaughterhouse. Tyson also cited volatile commodity markets, slower-than-expected improvements in its chicken business and the implementation of food safety initiatives.
"The discrete challenges we've encountered this quarter now lead us to believe we will fall short of our previously stated guidance, but our outlook for fiscal 2020 remains positive as we believe some of the challenges we're experiencing are not expected to repeat, and we're expecting more favorable market conditions as well," said CEO Noel White.
"Our diversified portfolio is uniquely suited to respond to dynamic and challenging market conditions, and we continue to expect better performance in fiscal 2020," White added. "We're very optimistic about our long-term potential as we focus on prepared foods growth, international growth and serving our customers."
Tyson Foods shares were marked 2.5% lower Wednesday to change hands at $90.98 each, a move that would still leave the stock with an impressive 66% year-to-date gain.
Tyson's profit downgrade comes just weeks after the group posted solid third quarter earnings that highlighted optimism for export markets in the coming financial year.
Tyson Foods said adjusted earnings for the three months ending in June, the company's fiscal third quarter, came in at $1.47 per share, essentially flat from last year and matching the Street consensus forecast. Group revenues, the company said, rose 3.56% from last year to $10.855 billion, narrowly missing analysts' estimates of a $10.95 billion tally.