TYSON FOODS, INC.

Tyson Foods, Inc. (NYSE: TSN) is a global leader in protein, operating across four reportable segments: Beef, Pork, Chicken, and Prepared Foods. The company's business model is centered on processing live fed cattle and hogs, raising and processing live chickens, and manufacturing and marketing a wide range of fresh, value-added, frozen, and refrigerated food products under iconic brands such as Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, State Fair®, Aidells®, and ibp®. Revenue is primarily generated through sales to grocery retailers, wholesalers, meat distributors, warehouse club stores, military commissaries, industrial food processing companies, and chain restaurants, with a significant portion of sales to Walmart Inc., which accounted for approximately 18.7% of consolidated sales in fiscal 2025 ¹. The company also has a subsidiary, Tyson New Ventures, LLC, focused on investing in breakthrough technologies and business models to transform the food industry, complementing its core businesses.

The Beef segment processes live fed cattle into primal and sub-primal meat cuts and case-ready products, marketed domestically and internationally. It also includes sales from specialty products like hides and rendered products, and logistics operations. In fiscal 2025, the Beef segment generated sales of $21,623 million ² and reported an operating loss of $(1,135) million ³, representing an operating margin of (5.2)% ⁴. This segment's operating income was significantly impacted by $343 million of goodwill and intangible impairments ⁵, $318 million of legal contingency accruals ⁶, and $48 million of restructuring and related charges ⁷.

The Pork segment processes live market hogs into primal and sub-primal cuts and case-ready products, also marketed domestically and internationally. This segment includes live swine operations and related specialty product processing. For fiscal 2025, the Pork segment recorded sales of $5,781 million ⁸ and an operating loss of $(199) million ⁹, resulting in an operating margin of (3.4)% ¹⁰. The operating loss was primarily due to compressed pork margins and $380 million of legal contingency accruals ¹¹.

The Chicken segment focuses on domestic operations, raising and processing live chickens into fresh, frozen, and value-added products, including breaded chicken strips, nuggets, and patties. It also includes the global operations of Cobb-Vantress, a chicken breeding stock supplier. The Chicken segment achieved sales of $16,837 million ¹² and an operating income of $1,427 million ¹³ in fiscal 2025, yielding an operating margin of 8.5% ¹⁴. This segment's results were positively influenced by improved operational execution and a $340 million net decrease in feed ingredient costs ¹⁵.

The Prepared Foods segment manufactures and markets frozen and refrigerated food products under brands like Jimmy Dean®, Hillshire Farm®, and Ball Park®. Products range from ready-to-cook and ready-to-eat sandwiches to breakfast sausage and hot dogs. This segment reported sales of $9,930 million ¹⁶ and an operating income of $898 million ¹⁷ in fiscal 2025, with an operating margin of 9.0% ¹⁸. Its operating income was boosted by higher average sales prices and improved operational execution, despite charges related to a product recall.

For the fiscal year ended September 27, 2025, Tyson Foods reported total sales of $54,441 million ¹⁹, an increase of 2.1% from fiscal 2024. Gross profit was $3,562 million ²⁰, with a cost of sales as a percentage of sales of 93.5% ²¹. Operating income stood at $1,098 million ²², translating to an operating margin of 2.0% ²³. Net income attributable to Tyson was $474 million ²⁴, and diluted EPS was $1.33 ²⁵. Cash and cash equivalents were $1,229 million ²⁶, while total debt was $8,830 million ²⁷, resulting in net debt of $7,601 million ²⁸. Cash provided by operating activities was $2,155 million ²⁹.

Comparing fiscal 2025 to fiscal 2024, total sales increased by $1.1 billion ³⁰, primarily due to higher average sales prices in the Beef, Pork, and Prepared Foods segments, partially offset by $653 million of increased legal contingency accruals ³¹. Operating income decreased from $1,409 million ³² in fiscal 2024 to $1,098 million ³³ in fiscal 2025, driven by lower operating income in Beef and Pork, despite improvements in Chicken and Prepared Foods. The Beef segment experienced a sales volume decrease of 1.9% ³⁴ and an average sales price increase of 9.0% ³⁵. The Pork segment saw a sales volume decrease of 1.7% ³⁶ and an average sales price increase of 5.3% ³⁷. The Chicken segment's sales volume increased by 2.6% ³⁸, while its average sales price remained relatively flat, changing by (0.1)% ³⁹. Prepared Foods experienced a sales volume decrease of 2.5% ⁴⁰ but an average sales price increase of 3.3% ⁴¹.

During fiscal 2025, the company initiated a network optimization plan, recognizing $45 million in net charges ⁴², which included a $107 million gain from the sale of storage facilities ⁴³. This plan involved the closure of two Prepared Foods facilities, a non-harvesting Beef facility, and asset write-offs in Chicken, Prepared Foods, and International/Other, along with severance and contract termination costs. Additionally, the company received $252 million in proceeds from the sale of storage facilities ⁴⁴. The company also recorded a $343 million goodwill impairment charge in the Beef segment ⁴⁵ and $738 million in legal contingency accruals ⁴⁶.

For fiscal 2026, Tyson Foods anticipates capital expenditures to be between $0.7 billion and $1.0 billion ⁴⁷, which will include investments in profit improvement projects, as well as maintenance and repair. The company expects to contribute approximately $15 million in cash to its pension plans in fiscal 2026 ⁴⁸. Net interest expense is projected to approximate $395 million for the 53 weeks of fiscal 2026 ⁴⁹. The Board of Directors increased the quarterly dividend to $0.51 per share on Class A common stock and $0.459 per share on Class B common stock ⁵⁰, payable on December 15, 2025, and again on March 13, 2026. This results in an anticipated annual dividend rate for fiscal 2026 of $2.04 for Class A shares and $1.836 for Class B shares ⁵¹, representing a 2% increase compared to the fiscal 2025 annual dividend rate.

The company's strategy for fiscal 2026 and beyond is focused on three key areas: delivering margins in the core protein business by driving efficiencies and valuing-up offerings, growing its branded portfolio through innovation in new occasions, categories, and channels, and scaling in international markets by delivering profitable value-added food offerings in high-growth categories. The network optimization plan, initiated in fiscal 2025, is expected to incur additional charges in the future as further actions are approved, aiming to reduce network complexity, streamline inventory flow, simplify processes, and reduce operating expenses.

The company continues to evaluate growth opportunities in foreign locations, with current foreign operations in China, Malaysia, Mexico, South Korea, Thailand, and the Kingdom of Saudi Arabia, as well as joint ventures in Brazil and Argentina/Uruguay. These international activities are a key part of the strategy to scale in international markets by delivering profitable value-added food offerings in high growth categories.

The company's operational outlook includes a continued focus on managing natural resources, increasing operational efficiencies, reducing greenhouse gas emissions across the supply chain, and partnering with stakeholders to create a more resilient food system. The climate strategy is evolving, with efforts underway to refresh and embed it into business and operations. The company also plans to continue investing in research and development activities, including new product innovation, product improvements, ingredient simplification, manual process automation in processing facilities and grow-out operations, and chicken breeding stock improvements.

Tyson Foods faces several material risks, including the potential failure to realize anticipated benefits from financial excellence programs and operational optimization plans, which could be more difficult, costly, or time-consuming than expected. International activities expose the company to risks such as border closures due to animal disease, currency exchange rate fluctuations, political and economic instability, and changes in import/export policies, including tariffs, which could negatively impact sales and operations. Global pandemics or localized epidemics could lead to increased operating costs, supply chain disruptions, and labor shortages. Cybersecurity threats, including cyber attacks and security breaches, pose a risk to information technology systems, potentially causing transaction errors, loss of customers, and reputational damage. Fluctuations in commodity prices and raw material availability, particularly for feed grains, live cattle, and live swine, directly impact gross margin and profitability, and the company may not always be able to offset these increases with pricing actions. Disease outbreaks in animals, such as African swine fever or avian influenza, could significantly affect demand, consumer perceptions, and the availability of livestock. Changes in consumer preferences and failure to innovate or maintain brand image could negatively impact business, especially during economic downturns when consumers may shift to lower-priced private label products. The loss of one or more large customers, such as Walmart Inc. which accounted for 18.7% of fiscal 2025 consolidated sales ¹, could significantly impact sales and operating income. Labor shortages, increased turnover, or rising employee costs could adversely affect profitability and the ability to operate facilities efficiently. Product liability claims from contamination or recalls could result in significant financial losses and reputational damage. Non-compliance with stringent environmental laws and regulations, or new regulations, could impose material costs. The company's level of indebtedness could negatively impact its business and liquidity, limiting future financing or restricting dividend payments. Impairment in the carrying value of goodwill or indefinite life intangible assets, which totaled $13.5 billion at September 27, 2025 ⁵², representing approximately 37% of total assets ⁵³, could negatively impact consolidated results. Participation in a multiemployer pension plan with a significant underfunded liability could lead to increased contributions or withdrawal liabilities. Volatility in capital markets or interest rates could adversely impact pension costs and funded status. Market fluctuations from commodity hedging activities could negatively impact operating results. Deterioration of economic conditions, including inflation and rising interest rates, could adversely affect demand, customer and supplier financial conditions, and raw material costs. Extreme factors beyond control, such as natural disasters or pandemics, could impair operations and demand. Failure to maximize or assert intellectual property rights could impact competitiveness. Additional tax expense or liabilities could arise from changes in tax laws or examinations.

Management's message to shareholders emphasizes Tyson Foods' purpose to "Feed the World Like Family™" and its commitment to bringing high-quality food to every table safely and affordably. The overall tone is one of strategic focus on core protein business efficiency, branded portfolio growth, and international market expansion, while acknowledging and actively managing operational and market challenges. Management explicitly guides for capital expenditures between $0.7 billion and $1.0 billion for fiscal 2026 ⁴⁷ and expects net interest expense to approximate $395 million for the 53 weeks of fiscal 2026 ⁴⁹. The Board of Directors has also increased the quarterly dividend to $0.51 per share on Class A common stock and $0.459 per share on Class B common stock ⁵⁰, anticipating an annual dividend rate in fiscal 2026 of $2.04 for Class A shares and $1.836 for Class B shares ⁵¹, a 2% increase over fiscal 2025. The three strategic priorities highlighted are: delivering margins in the core protein business by driving efficiencies and valuing-up offerings to better serve consumers; growing the branded portfolio by innovating new occasions, categories, and channels; and scaling in international markets by delivering profitable value-added food offerings in high growth categories.