Tyson Foods(TSN) - 2025 Q2 - Quarterly Results

Financial Performance - Sales for the second quarter of 2025 were $13,074 million, flat compared to the prior year, with legal contingency accruals reducing sales by$ 343 million, or 2.6%[6] - Adjusted operating income for the second quarter increased by 27% to $515 million, while GAAP operating income decreased by 68% to$ 100 million[6] - Adjusted net income per share attributable to Tyson was $0.92, up 48% from the prior year, while GAAP EPS was$ 0.02, down 95%[6] - Total company adjusted operating margin was 3.8% for the second quarter, compared to 3.1% in the prior year[8] - Sales for the three months ended March 29, 2025, were $13,074 million, a slight increase from$ 13,072 million in the same period last year, resulting in a sales growth of 1.2% for the six months ended[23] - Gross profit for the three months ended March 29, 2025, was $600 million, with a gross profit margin of 4.6%, down from 6.6% in the same period last year[23] - Operating income decreased to$ 100 million for the three months ended March 29, 2025, compared to $312 million in the same period last year, reflecting an operating margin of 0.8%[23] - Net income attributable to Tyson for the three months ended March 29, 2025, was$ 7 million, a significant decrease from $145 million in the same period last year, resulting in a net income margin of 0.1%[23] - The total adjusted operating income for the six months ended March 29, 2025, was$ 1,174 million, up from $817 million for the same period in 2024[36] - Tyson Foods' EBITDA for the six months ended March 29, 2025, was$ 1,391 million, compared to $1,273 million for the same period in 2024, reflecting a year-over-year increase of 9.3%[38] Future Projections - For fiscal 2025, Tyson anticipates total company adjusted operating income between$ 1.9 billion and $2.3 billion[15] - The company expects sales to be flat to up 1% in fiscal 2025, including the$ 343 million reduction due to legal contingency accruals[16] - Capital expenditures are projected to be between $1.0 billion and$ 1.2 billion for fiscal 2025[17] - Free cash flow is expected to be between $1.0 billion and$ 1.6 billion for fiscal 2025[20] - The adjusted effective tax rate is expected to approximate 25% for fiscal 2025[21] Cash Flow and Liquidity - Liquidity as of March 29, 2025, was $3.2 billion, expected to remain above the minimum target of$ 1.0 billion[19] - Cash provided by operating activities for the six months ended March 29, 2025, was $846 million, down from$ 1,177 million in the same period last year[27] - Cash and cash equivalents at the end of the period were $992 million, a decrease from$ 2,182 million at the end of the previous period[27] - Operating cash flow for the six months ended March 29, 2025, was $846 million, down from$ 1,177 million for the same period in 2024, representing a decrease of approximately 28.2%[40] - Free cash flow for the six months ended March 29, 2025, was $382 million, a decline of 31.3% compared to$ 556 million for the same period in 2024[40] Debt and Assets - Total assets decreased to $36,280 million as of March 29, 2025, from$ 37,100 million as of September 28, 2024[25] - Current liabilities increased to $5,494 million as of March 29, 2025, compared to$ 4,787 million as of September 28, 2024[25] - Tyson Foods' total gross debt as of March 29, 2025, was $9,787 million, with a net debt of$ 8,060 million[38] - The ratio of gross debt to EBITDA was reported at 3.4x for the six months ended March 29, 2025, compared to 3.0x for the previous year[38] Operational Insights - The company incurred $343 million in legal contingency accruals during the second quarter of 2025, significantly impacting net income[34] - The network optimization plan charges amounted to$ 116 million for the six months ended March 29, 2025, contributing to the overall operating income adjustments[36] - The company reported a significant increase in operating income from chicken products, totaling $312 million for the second quarter ended March 29, 2025[36] - The company faced$ 54 million in restructuring and related charges during the second quarter of 2024, impacting overall financial performance[34] Taxation - The effective tax rate for the three months ended March 29, 2025, was 51.0%, significantly higher than 26.9% in the same period last year[23] Dividends - Dividends declared per share for Class A and Class B were $0.500 and$ 0.450 respectively, compared to $0.490 and$ 0.441 in the same period last year[23] Workforce and Corporate Responsibility - Tyson Foods had approximately 138,000 team members as of September 28, 2024, indicating a stable workforce size[41] - The company is committed to providing high-quality food safely and sustainably, aligning with its purpose of feeding the world like family[41] Communication and Risks - A conference call to discuss financial results is scheduled for May 5, 2025, at 9 a.m. Eastern, with a replay available until June 5, 2025[42] - Forward-looking statements indicate potential impacts from global pandemics, market conditions, and consumer preferences on future performance[43] - The company faces risks related to livestock diseases, input costs, and competition from alternative proteins, which could affect operations[43] - Tyson Foods emphasizes the importance of maintaining good relationships with team members and contract farmers to ensure operational stability[43] - The company is focused on leveraging brand value propositions and adapting to changes in consumer trends and preferences[43] - Financial information and updates can be accessed through the Tyson Investor Relations website, ensuring transparency for investors[42]