Tyson Foods, Inc. delivered first-quarter fiscal 2026 sales totaling approximately $14.313 billion, reflecting a 5.1% increase compared to the same period last year. While adjusted earnings per share (EPS) came in at 97 cents—surpassing analyst forecasts of 94 cents—this figure marked a 15% decline year-over-year. The company's Generally Accepted Accounting Principles (GAAP) EPS was significantly lower at 24 cents, down 76% from the previous year. The shares experienced a downward adjustment in post-earnings trading.
The reported revenue exceeded estimates of $14.085 billion. Notably, the company indicated that sales rose by 6.2% after excluding a $150 million legal contingency accrual classified as a sales reduction. On an operating basis, GAAP operating income declined 48% to $302 million. Adjusted operating income, which excludes certain non-recurring items, also fell by 13% to $572 million. Correspondingly, the GAAP operating margin settled at 2.1%, with the adjusted margin at 4.0%.
Tyson Foods’ President and CEO, Donnie King, highlighted the company's "solid execution across our portfolio" in his remarks. He pointed out that the Prepared Foods segment achieved growth in both sales and earnings, and forecasted that the Chicken business completed its fifth straight quarter of increasing volumes compared to the prior year. King emphasized Tyson's strengthened market position, supported by rising protein demand and consistent share gains, which he believes set the stage for ongoing improvement in controllable business areas throughout fiscal 2026.
During the earnings conference call, executives expressed confidence in chicken becoming the preferred protein choice in the coming year. King discussed strategic initiatives within the beef business, noting that Tyson has actively downsized and streamlined these operations to enhance efficiency and capacity utilization, aiming to maintain competitiveness over the long term. He characterized the accumulated beef losses over the past two years as "unacceptable," prompting necessary restructuring.
The company anticipates continued constraints in U.S. cattle supplies through 2026 and 2027, which it expects to favor stronger demand for chicken products. However, management cautioned that the full financial effects from beef plant closures will emerge only in upcoming quarters, introducing uncertainty into near-term results.
Segment Analysis
- Beef: Sales advanced to $5.771 billion from $5.335 billion year-over-year, supported by price increases of 17.2% despite a 7.3% decrease in volume. The beef segment registered an operating loss of $319 million, or an adjusted operating loss of $143 million after accounting for $90 million in legal contingency charges.
- Pork: Revenues were relatively flat at $1.609 billion versus $1.617 billion previously. Operating income stood at $50 million, with an adjusted figure of $111 million after excluding $60 million related to legal contingencies.
- Chicken: This segment showed sales growth to $4.212 billion from $4.065 billion. Operating income reached $450 million, with adjusted operating income slightly higher at $459 million, underscoring its role as a strong performance contributor.
- Prepared Foods: Sales increased to $2.673 billion from $2.473 billion, while operating income rose to $322 million and adjusted operating income was $338 million.
- International: Sales were stable at $582 million compared to $584 million the prior year. Operating income was $41 million, with adjusted operating income at $46 million.
Financial Position and Cash Flow
Cash generated from operating activities amounted to $942 million, representing a decrease of $89 million from the prior year. On a non-GAAP basis, free cash flow came in at $690 million, down $70 million sequentially. The company reported cash and cash equivalents of $1.278 billion as of December 27, 2025, maintaining total liquidity of $4.5 billion. Moreover, Tyson successfully reduced its total debt by $468 million during the quarter.
The company has revised its financial reporting structure starting in fiscal 2026. Corporate expenses and amortization will no longer be allocated to individual business segments; instead, these costs will be reported separately. Additionally, the International segment has been designated as a reportable segment.
Outlook for Fiscal 2026
Tyson Foods forecasts an increase in sales ranging from 2% to 4% over the prior year and reaffirmed its sales guidance between $55.530 billion and $56.619 billion. The company projects total adjusted operating income between $2.1 billion and $2.3 billion and anticipates free cash flow in a range of $1.1 billion to $1.7 billion.
Segment expectations include an adjusted operating loss in Beef from $500 million to $250 million, adjusted operating income in Pork between $250 million and $300 million, $1.65 billion to $1.90 billion in Chicken, $1.25 billion to $1.35 billion in Prepared Foods, and $150 million to $200 million in International operations.
Market Response
As of the publication time on Monday, Tyson Foods shares showed a modest increase of 0.14% to $65.42, remaining near their 52-week high of $65.96.