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- Tyson Foods slumped nearly 6% after missing Wall Street estimates for quarterly profits.
- The meat processor said fiscal first-quarter earnings sank 70% from a year ago.
- "We got hit in the mouth in Q1 because of all the protein on the market," Tyson CEO Donnie King said.
Tyson Foods stock tumbled after posting weak quarterly results on Monday as falling meat prices took a bite into the company's profits.
Shares of the meat processor fell as much as 6% to $60.11, notching its biggest intraday decline since November.
The Arkansas-based firm's fiscal first-quarter earnings plunged 70% from a year ago to 85 cents a share, missing analysts' estimates of $1.35 a share, according to FactSet. Sales rose 2.5% to $13.26 billion.
"We faced some challenges in the first quarter," Tyson Chief Executive Donnie King said in a call with investors. "Market dynamics and some operational inefficiencies impacted our profitability."
Still, Tyson expects performance to improve in the latter half of the fiscal year, and expects record sales between $55 billion and $57 billion for 2023.
Meanwhile, profits are suffering as inflation-weary customers reduced spending on pricier chicken, pork, and beef during the three months ending on December 31. Profit margins in chicken shrank to 1.6% from 3.6% a year ago as "the demand didn't show up in fresh chicken."
Tyson said US chicken production should increase 3% this year, placing further pressure on prices, which are already trending downward. Boneless and skinless chicken breast prices should fall around 45% in the quarter, according to investment bank Piper Sandler.
Elsewhere, margins in Tyson's beef business narrowed sharply to 3.5%, as the average sales price slipped 8.5%. Beef margins are expected to continue to "decrease from historically high levels," according to the company's earnings report.
"We got hit in the mouth in Q1 because of all the protein on the market," CEO King said on the call.