Tyson Foods (NYSE:TSN) reported third-quarter fiscal 2026 adjusted earnings per share of $0.99, up 9% from a year earlier, as stronger results in chicken, pork and international operations more than offset continued losses in beef.
Total sales were essentially flat at $13.9 billion. A 3.4% increase in average selling prices offset a 2.8% volume decline, which the company said was driven largely by constrained cattle supplies affecting its beef business. Adjusted operating income totaled $547 million, representing a 3.9% margin, while segment operating income increased $18 million year over year to $779 million.
Prepared Foods, Chicken Drive Results
Prepared Foods sales rose 1.7%, or $42 million, to $2.6 billion. Segment operating income was $321 million, down slightly from a year earlier, with a 12.6% margin. King said roughly $30 million in higher commodity costs, particularly beef trim, outpaced price recovery during the quarter.
The company said it expects lower pork commodity costs to begin benefiting results later in the fourth quarter and into fiscal 2027, though the timing will be affected by production and inventory cycles. King also said higher fuel and distribution costs have been a headwind since mid-April, but customer freight is generally passed through over one or two quarters.
Tyson said its prepared foods brands gained retail share throughout all 13 weeks of the quarter. Volume share rose 70 basis points, unit share increased 70 basis points and dollar share rose 50 basis points. The company cited growth in Hillshire Snacking, Hillshire Farm lunch meat, Aidells dinner sausage, smoked sausage products and Jimmy Dean refrigerated breakfast.
Chicken segment operating income increased $40 million year over year to $488 million, producing an 11.2% margin. Retail and foodservice volumes increased 3.8%, compared with total chicken volume growth of 1%.
King said Tyson’s chicken business is less exposed to commodity market swings than traditional processors because much of its volume is tied to strategic customer commitments, branded offerings and value-added products. Although industry chicken cutout values fell during the quarter, the company said its net price realization increased from the prior year because of product mix, customer pricing models and commercial execution.
The company also discussed progress with its big-bird chicken genetics program. King said a new, more competitive genetic line is moving through Tyson’s supply chain and is expected to account for about 75% of applicable production by the end of calendar 2026, with the remaining transition occurring in fiscal 2027. He said the change should benefit both the genetics operation and domestic chicken operations through improved productivity metrics.
Beef Losses Continue Amid Tight Cattle Supply
Tyson’s beef segment posted an operating loss of $138 million in the quarter. Beef volume declined 15.9%, while pricing rose 12.1% as limited cattle supplies pushed raw-material costs higher.
The company said footprint optimization actions taken in the second quarter delivered as expected, but those benefits were more than offset by U.S. Department of Agriculture margin compression. Tyson lowered its full-year beef outlook and now expects an operating loss of $500 million to $650 million.
Chief Operating Officer Wes Morris said the phased reopening of the Mexican border to cattle imports could provide a longer-term benefit. He noted that cattle from Mexico historically account for about 5% of U.S. harvest, though the impact will take time because most imports are feeder cattle that must first move through grazing or feedlot operations. Morris said it could take close to a year before the reopening produces a positive effect on supply.
King said the border reopening will not materially affect the remainder of Tyson’s fiscal year, which ends in September, and will not independently resolve current beef losses. The company remains focused on customer mix, revenue management, productivity and cost control within an optimized production footprint.
Pork, International Results Remain Stable
Pork segment operating income was $60 million, or a 3.8% margin, supported by solid consumer demand and adequate hog supplies. King said Tyson’s pork operations also benefit from their role as a raw-material supplier for prepared foods, enabling the company to direct products toward higher-value uses.
International operating income was $48 million, with an 8% margin, as cost discipline and improved execution in key markets supported results. Tyson maintained its annual outlook for both pork and international operations.
For fiscal 2026, Tyson narrowed expected sales growth to 2.5% to 3.5% on a comparable 52-week basis. The company maintained its adjusted operating income outlook at $2.1 billion to $2.3 billion, reflecting pressure in beef.
- Prepared Foods operating income outlook: $1.3 billion to $1.35 billion, with the midpoint raised.
- Chicken operating income outlook: $1.9 billion to $2.05 billion, reaffirmed.
- Pork operating income outlook: $250 million to $300 million, reaffirmed.
- International operating income outlook: $150 million to $200 million, reaffirmed.
- Free cash flow outlook: $1.3 billion to $1.7 billion.
- Capital expenditures outlook: $700 million to $900 million.
Cash Flow and Leadership Transition
For the first nine months of fiscal 2026, Tyson generated $1.47 billion in operating cash flow and $913 million in free cash flow after $556 million in capital expenditures. The company ended the quarter with $4 billion in liquidity and net leverage of 2.1 times.
Tyson repurchased $31 million of shares during the quarter and an additional $49 million after quarter-end. Including dividends, the company said it has returned $652 million to shareholders year to date.
Incoming Chief Executive Officer Jeff Schomburger, who has served on Tyson’s board for more than 10 years, said the company will continue to focus on operational execution, its multi-protein portfolio, brand investment, innovation, affordability and long-term shareholder value. King said he will leave the CEO role but remain on Tyson’s board.
Looking toward fiscal 2027, management did not provide formal guidance but said it expects continued volume and profitability growth in prepared foods, another constructive year for chicken, stable pork and international results, and continued operational focus in beef.
About Tyson Foods (NYSE:TSN)
Tyson Foods, Inc (NYSE: TSN) is a multinational food company primarily engaged in the production, processing and marketing of protein-based and prepared food products. Founded in 1935 and headquartered in Springdale, Arkansas, the company is one of the world’s largest processors of chicken, beef and pork. Its operations span live animal procurement and farming relationships through slaughter, further processing and distribution, supplying raw protein and value-added prepared foods to retail, foodservice and industrial customers.
The company’s product portfolio covers fresh and frozen meats, branded and private-label prepared foods, and a range of value-added items such as ready-to-eat and ready-to-cook meals, snack and sandwich meats.
