What happened
Shares of Tyson Foods (TSN -1.01%) surged 12.2% to a record-high closing of $99.09 on Monday after the food services giant delivered strong revenue and earnings growth.
So what
Tyson's sales rose 24% year over year to $12.9 billion in its fiscal 2022 first quarter, which ended on Jan. 1. The company's adjusted operating income, in turn, leaped 40% to $1.4 billion, while its adjusted earnings per share soared 48% to $2.87.
The gains were driven by price increases. Average prices for Tyson's beef, chicken, and pork products jumped 31.7%, 19.9%, and 12.8%, respectively.
Image source: Getty Images.
Tyson said it hiked prices to offset rising expenses. Supply chain constraints and a tight labor market are leading to higher animal feed prices, shipping costs, and wages.
Still, Tyson's surging profits show that the company was able to successfully navigate these challenges while demonstrating impressive pricing power.
"We're pleased with the results of the first quarter and of the steps that we are taking to improve productivity," CEO Donnie King said in a press release. "Our performance reflects the resilience of our multi-protein portfolio even with continued volatility in the marketplace."
Now what
Management expects Tyson to generate as much as $51 billion in sales in fiscal 2022. That would represent year-over-year growth of roughly 8%.
To further boost profits, the company is targeting $1 billion in cost savings by the end of fiscal 2024, with up to $400 million in savings coming in 2022.
Tyson's swelling profits, however, could draw the ire of regulators. The Biden administration is seeking to foster greater competition in the meat production industry to curb rising food costs.
