On Monday, Tyson Foods raised its forecast for profit for its full fiscal year as the supplier of meat’s earnings for the quarter easily beat expectations and its revenue was down less than had been expected thanks to continued strong demand by consumers and lower costs.
CEO at Tyson Donnie Smith said the meat supplier was helped during the third quarter of its fiscal year by focusing on its growth in prepared foods.
Its earnings jumped even though sales declined overall, which has been a trend recently that executive said showed the investment by Tyson in prepackaged food products that are aimed at lowering its dependence for fresh meats shrink wrapped is now paying off.
Two months ago, Tom Hayes was named by the company as president. Hayes was the supply-chain officers for Hillshire Brands when Tyson acquired the group in 2014 for $7.7 billion.
That deal helped enhance the position of Tyson in the higher margin area of prepared foods through choosing brands like Jimmy Dean’s and Ball Park. Sales volume for its prepared foods area increased during the most recent period by 1.9%.
The company has been the benefactor of late from strong consumer spending, higher cattle supplies and lower prices for their animal feeds.
The largest meat processor in the U.S. by sales, Tyson has said expanding hog, poultry and cattle supplies will lower costs for its business of prepared foods, while restaurant clients are to benefit from consumers that are freer spending.
Operating margin overall at the business increased by 8.2% during the most recent periods compared to 5.6% last year.
The company increased its forecast for adjusted profit for the full year to between $4.40 and $4.50 per share, in comparison to its guidance released before of between $4.20 and $4.30 per share. Analysts were expecting $4.36 per share.
During its third quarter, which came to a close on July 2, Tyson was able to post a $484 million in profit equal to $1.25 per share, which was up from last year during the same period of $343 million equal to 83 cents per share.
Excluding special items earnings per share equaled $1.21, which was up from last season of 80 cents. Analysts were expecting $1.06 per share of earnings.
Revenue was down 4.1% ending the quarter at $9.4 billion, while analysts were expecting $9.33.