Tyson Foods closed the first quarter of fiscal 2026 with better-than-expected earnings, boosted by demand for chicken, which more than offset the severe challenges in the beef sector. Quarterly revenue reached $14,31 billion (+5,1%), exceeding analysts' estimates, while adjusted EPS reached $0,97, exceeding consensus.
Consumption trends reflect a complex macroeconomic environment: in the United States, consumer confidence fell to its lowest level in over 11 years in January, impacted by food price inflation and a less dynamic labor market. In this environment, consumers are favoring lower-cost proteins, favoring chicken over beef.
The Chicken segment benefited from this shift in demand, with sales up 3,7% and its fifth consecutive quarter of volume growth, despite a slight decline in adjusted operating profit to $459 million. According to management, the outlook remains favorable: beef supplies are expected to remain tight at least until 2027, further strengthening chicken's attractiveness as a value-oriented protein.
Beef fared in the opposite direction, penalized by record cattle prices and a U.S. herd at a 75-year low, reduced by a persistent drought and rising feed costs. In the quarter, beef sales volumes fell 7,3%, compared to a 17,2% increase in prices, resulting in an adjusted operating loss of $143 million.
Cattle supply costs increased by approximately $850 million year over year, further compressing industry margins. In December, retail ground beef prices hit an all-time high of $6,69 per pound (up 19% year over year), according to data from the Bureau of Labor Statistics.
The group has already initiated streamlining measures, announcing the closure of a large beef processing plant in Nebraska and the reduction of operations at a plant in Texas.
Despite the challenges, the company maintains a solid financial position, with $4,5 billion in liquidity and a $468 million reduction in debt in the quarter. For the full year 2026, Tyson Foods expects revenue to grow between 2% and 4% and adjusted operating profit between $2,1 billion and $2,3 billion. In an environment of high prices and more selective consumption, the group's strategy aims to capitalize on the shift in demand toward more accessible proteins, while continuing to seek structural solutions to revitalize the beef sector.
