What happened

Meat processing giant Tyson Foods (NYSE:TSN) stock has badly trailed the market in the wake of the COVID-19 pandemic, with shares down over 30% in 2020 through mid-August. The S&P 500 is up by 6% in that time.

So what

The owner of popular chicken, pork, and beef brands like Tyson and Jimmy Dean took a significant hit in the fiscal third quarter, which ran through late July and included temporary plant closures and unprecedented stress on its supply chain. Sales fell across its four operating segments as Tyson struggled to maintain supply to supermarket chains.

A woman shops for meat at the grocery store.

Image source: Getty Images.

Revenue declined 8% in Q3 and earnings dipped to $1.40 per share from $1.47 per share a year earlier. "Our third fiscal quarter was one of the most volatile and uncertain periods I've seen during my time in the industry," CEO Noel White said in an early August press release.

Now what

Several of the stressors that impacted Tyson's business last quarter, including extra costs related to COVID-19 outbreaks and sanitation measures, may linger well into 2021. As a result, the consumer staples company could report several quarters of unusually weak sales and earnings. However, it remains solidly profitable and continues to generate healthy cash flow. The bigger question is how Tyson will adjust to shifting consumer demand for meat products.

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