Aug. 9 (Reuters) – Tyson Foods Inc (TSN.N) cannot raise prices for chicken and prepared foods fast enough to keep pace with rising costs of raw materials like grains, the general manager said on Monday Donnie King, after the company reported a rise. quarterly profit than expected.
The meat company has lifted its revenue forecast for 2021 due to strong demand for beef, as steak and hamburger sales at U.S. restaurants and hotels resumed after COVID-19 restrictions were eased. American beef exports are also strong.
But costs are also rising, a potential drag on future profits.
Tyson has raised prices for restaurant customers to offset inflation and plans to raise retail prices on September 5, King said on a conference call with analysts. Further increases are planned, he said.
“The costs are hitting us faster than we can get the prices at this point,” King said.
Branded and value-added products are particularly affected by inflation, which reached 14% in the quarter ended July 3, he said.
“We have seen unprecedented and accelerating inflation, and we are trying to catch up with that,” King told reporters.
Tyson increased its average pork price 39.3% last quarter, while it increased beef and chicken prices 11.6% and 15.6% respectively. Sales volumes have also increased.
Total quarterly sales hit $ 12.48 billion from $ 10.02 billion a year earlier, beating analysts’ estimates at $ 11.49 billion.
Net income attributable to Tyson increased to $ 2.05 per share from $ 1.44 a year earlier. On an adjusted basis, Tyson earned $ 2.70 per share, crushing estimates by $ 1.62, according to IBES data from Refinitiv.
Hot dog maker Jimmy Dean said he expects total sales of around $ 46 billion to $ 47 billion for fiscal 2021, down from an earlier forecast of $ 44 billion to $ 46 billion.
The company, which makes COVID-19 vaccination mandatory for U.S. employees, said the increase in coronavirus cases has made it harder to find workers. Read more
“We were on a good line and then the Delta variant came along,” King said.
Reporting by Praveen Paramasivam in Bengaluru and Tom Polansek in Chicago, editing by Sherry Jacob-Phillips, Chizu Nomiyama and Steve Orlofsky
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