Tyson Foods increased quarterly revenue due to higher meat prices

Meat maker Tyson Foods publishes financial report for the fourth quarter of fiscal year 2021. Compared to the same quarter last year:

revenue increased by 12%, up to $12.8 billion;
operating profit increased by 98%, up to 1.9 billion;
net profit increased by 107%, up to 1.4 billion.

Like the rest, Tyson Foods is in trouble, caused by COVID-19. But unlike many, the company operates in a recession-resistant segment., because the demand for its products is always high. And in case of problems, Tyson Foods can always raise prices. So she does.

Revenue. Sales volume of all types of meat - beef, pork and chicken - fell compared to last year. The first reason is accounting.. The fourth quarter of fiscal 2020 was extended by a week. The second is disruptions due to lack of staff and supply issues.. As a result, quarterly sales decreased by 11%.

But, as the company notes, demand for meat remained high throughout the period. To reduce rising wage and transportation costs, Tyson Foods raised prices. So, for the year beef has risen in price by 33%, pork — on 38%, chicken — on 19%. As a result, it was possible not only to compensate for the costs, but also to increase quarterly revenue by 12%.

Profit. Tyson Foods divests pet treat business in Q4. This added approximately $0.8 billion to operating profit.. Therefore, adjusted operating income did not double., according to accounting standards, and on 26%, up to $1.2 billion. Again, due to rising prices.

Forecast. In 2020, when the demand of catering for meat fell, Tyson Foods' revenue grew by only 2%. In the same year, due to the effect of a low base, revenue increased by 9%, up to 47 billion dollars. According to company forecasts, next, 2022 revenue will grow by 6%, up to 50 billion dollars. On average, in the last five years, Tyson Foods' revenue has grown by 5% in year.