Tyson Cuts Full-Year Forecast on Widening Losses in Beef Segment

Tyson Foods Inc. lowered its full-year profit forecast on Monday, signaling that persistent tightness in U.S. cattle supplies will lead to wider-than-expected losses in its beef segment.

The company's performance has been hampered by elevated livestock costs and weakening consumer demand for higher-priced beef, forcing it to revise its financial outlook for the fiscal year.

Revised Financial Outlook

Tyson announced it now anticipates fiscal 2026 adjusted operating income to be between $2.1 billion and $2.3 billion, a reduction from its previous forecast of $2.2 billion to $2.4 billion. The company's third-quarter sales of $13.87 billion also fell short of analysts' estimates of $14.12 billion, as compiled by LSEG.

The most significant pressure comes from the beef division, where the company now projects an adjusted operating loss of $500 million to $650 million. This is a considerable increase from the prior estimate of a $350 million to $500 million loss.

Headwinds in the Beef Market

Ad

The downgrade reflects severe margin pressure on meatpackers. U.S. cattle inventories have fallen to their lowest levels in 75 years after prolonged drought and high feed costs led ranchers to shrink their herds. This scarcity has driven up the cost of livestock for processors like Tyson.

These higher costs, passed on to consumers, have also dampened demand as inflation-conscious shoppers reduce spending. The impact was evident in Tyson's third-quarter results, where beef volumes declined by 15.9%. Supply constraints were further exacerbated by a U.S. Department of Agriculture suspension of livestock imports from Mexico, though the agency plans to begin lifting the ban this month.

Chicken Segment Offers a Buffer

While the beef business struggles, Tyson's chicken segment is providing some stability. The company has benefited from consumers shifting to chicken as a more affordable protein alternative amid rising beef prices.

Sales volumes in the chicken division rose 1% during the third quarter. More notably, the segment's adjusted operating margin increased to 11.2%, helping to partially offset the significant losses from the beef operations.