Tyson Foods(US:TSN)2025-11-10 12:35Financial Performance - Sales increased by 2.1%, or $1.1 billion, to $54.4 billion in fiscal 2025, driven by higher average sales prices in the Beef, Pork, and Prepared Foods segments[158]. - Operating income for fiscal 2025 was $1,098 million, down from $1,409 million in fiscal 2024, impacted by $738 million in legal contingency accruals and $343 million in goodwill impairments[158][159]. - Net income attributable to Tyson was $474 million in fiscal 2025, down from $800 million in fiscal 2024, with diluted earnings per share decreasing from $2.25 to $1.33[181]. - Total sales for fiscal 2025 reached $54,441 million, a 2.1% increase from $53,309 million in 2024[184]. - Net income for fiscal 2025 is reported at $507 million, a decrease from $822 million in fiscal 2024[231]. - EBITDA for fiscal 2025 is $2,495 million, down from $2,872 million in fiscal 2024[231]. Segment Performance - Beef segment sales increased to $21,623 million in 2025, up 5.6% from $20,479 million in 2024, despite a sales volume decrease of 1.9%[190]. - Pork segment sales decreased to $5,781 million in 2025, down 2.1% from $5,903 million in 2024, with an operating loss of $199 million[191]. - Chicken segment sales rose to $16,837 million in 2025, a 2.5% increase from $16,425 million in 2024, with operating income of $1,427 million[196]. - Prepared Foods segment sales increased to $9,930 million in 2025, up 0.8% from $9,851 million in 2024, with operating income of $898 million[199]. - The Beef segment reported an operating loss of $1,135 million in 2025, compared to a loss of $381 million in 2024[190]. - The Chicken segment's operating income improved significantly from a loss of $770 million in 2023 to a profit of $1,427 million in 2025[196]. Expenses and Costs - Selling, general and administrative expenses decreased by $97 million to $2,121 million, primarily due to lower costs in the Chicken segment and reduced legal contingency accruals[172][173]. - Cost of sales increased by $1,197 million, with higher input costs per pound impacting the Beef segment by approximately $1,840 million[168][170]. - The Prepared Foods segment faced $41 million in charges related to a product recall in 2025[187]. - The company experienced a $340 million decrease in feed ingredient costs, positively impacting operating income in the Prepared Foods segment[201]. Legal and Contingency Accruals - The company recognized $698 million in legal accruals related to various litigations in fiscal 2025[240]. - Legal contingency accruals impacted the Beef and Pork segments, with $318 million and $380 million recognized in 2025, respectively[190][185]. Tax and Goodwill - The effective tax rate increased to 34.1% in fiscal 2025, primarily due to a non-deductible goodwill impairment[179][180]. - The company recognized $343 million in goodwill impairment in the Beef segment during fiscal 2025[175][176]. - During fiscal 2023, the company recognized $781 million of goodwill impairment charges, including $333 million for the Beef reporting unit[258]. - In the third quarter of fiscal 2025, the company recognized a $343 million impairment to fully impair the remaining goodwill of the Beef reporting unit[260]. Liquidity and Debt - The company had total liquidity of $3,729 million as of September 27, 2025, including $1,229 million in cash and cash equivalents[211]. - The ratio of net debt to EBITDA increased to 3.0x at September 27, 2025, compared to 2.8x at September 28, 2024, due to a decrease in EBITDA[215]. - The company fully repaid a $750 million term loan due May 2026 and $310 million of a term loan due May 2028 using cash on hand in fiscal 2025[210]. - The company expects net interest expense to approximate $395 million for the 53 weeks of fiscal 2026[216]. - The revolving credit facility has a committed capacity of $2.5 billion, with no borrowings under the facility during fiscal 2025[212]. - The company was in compliance with all debt covenants at September 27, 2025, and expects to maintain compliance[221]. Pension and Benefits - The funded status of the defined benefit pension plans is underfunded by $146 million at the end of fiscal 2025, an improvement from $158 million at the end of fiscal 2024[222]. - The company contributed $14 million to pension plans in fiscal 2025 and expects to contribute approximately $15 million in fiscal 2026[222]. - The net periodic benefit cost for defined benefit pension plans was $7 million in fiscal 2025, with a projected benefit obligation of $176 million[250]. Market Risks and Sensitivities - The company continuously evaluates macro-economic conditions, including inflationary pressures and rising interest rates, which could impact the fair value of reporting units and indefinite life intangible assets[267]. - The company has variable rate debt of $484 million with a weighted average interest rate of 5.9%, and a hypothetical 10% increase in interest rates would raise annualized interest expense by approximately $3 million[283]. - The company holds fixed-rate debt of $8,346 million with a weighted average interest rate of 4.8%, and a hypothetical 10% decrease in interest rates would increase the fair value of this debt by approximately $231 million[284]. - At September 27, 2025, a hypothetical 10% change in foreign exchange rates would have impacted pretax income by $21 million[286]. Future Outlook and Strategy - The company aims to grow its branded portfolio and expand in international markets by delivering profitable value-added food offerings in high-growth categories[164]. - Capital expenditures for fiscal 2026 are expected to be between $700 million and $1,000 million, focusing on profit improvement and maintenance projects[209].