Tyson Foods (TSN) Retail Grows on Strong Demand

Tyson Foods, Inc. TSN took advantage of higher home consumption trends amid the pandemic. This well-known meat products company is experiencing high demand in its retail channel. Additionally, the company benefited from increased demand for high protein food products in key markets. In addition, the company’s strong brand image and efforts to increase its operational efficiency have served as growth catalysts.

Retail channel wins with higher demand

Tyson Foods’ retail business is experiencing favorable demand conditions due to increased home consumption amid the pandemic. Notably, strong retail sales were a critical advantage for the company in the second quarter of fiscal 2021. During the quarter under review, the company saw growth across all segments of the retail channel. . Notably, retail contributed $ 700 million to the overall sales improvement in the first half and over $ 260 million in the second quarter.

Strong portfolio of protein products

Tyson Foods has a rich portfolio of high protein brands that are growing rapidly around the world. For the beef segment, the USDA predicts that domestic production will increase by nearly 3% in fiscal 2021. For pork, domestic production growth is expected to increase by less than 1%, according to the USDA . To drive the growth of the prepared food segment, the company is focused on responding effectively to changing consumer preferences. The company is also engaged in plant expansions to increase its production capacity.

In addition, Tyson Foods has constantly expanded its offering of fresh prepared foods, due to increasing consumer demand for natural fresh meat offerings without added hormones or antibiotics. Additionally, Tyson Foods is exploring growth opportunities in the alternative meat products space, which primarily includes protein from plant sources.

Final thoughts

We note that the performance of Tyson Foods is negatively affected by the production inefficiencies induced by the pandemic. This impacted the company’s sales volumes in the second quarter of fiscal 2021. Additionally, severe winter weather during the quarter negatively impacted volumes. In addition, the recovery volumes have not yet accelerated. Apart from that, the company faces the rising operating costs associated with the pandemic.

Nevertheless, the company uses several operational efficiency and supply chain programs to better position itself over the long term. These advantages, along with the strong presence of the Tyson Foods brand, its geographic reach as well as its efforts to meet changing global demand, keep it well positioned for growth in the periods to come.

The shares of this Zacks Rank # 3 (Hold) stock have risen 17.1% in the past three months compared to industrythe increase of 6.7%.

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Pilgrims Pride Corporation PPC, with a Zacks # 2 (Buy) rank, has a long-term profit growth rate of 27%. You can see The full list of current Zacks # 1 Rank (Strong Buy) stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

About Timothy Cheatham

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