The global meat processor,
Tyson Foods Inc.
) has announced that they will focus on innovation as an
important part of their growth strategy and they have an
aggressive product launch scheduled ahead in fiscal 2013.
Management drew the investors' attention to the three pillars
of the company's growth strategy, namely, accelerate, innovate
Tyson expects to achieve top line sales growth of 3% to 4%
every year. Value added sales are expected to grow 6% to 8%,
while international sales are expected to increase 12% to 16%
during ?. The company also aims to maintain a bottom line growth
of 10% every year.
International growth has also been given great importance. The
company expects to grow its business in China, Mexico and India.
Moreover, Tyson is foraying into Mexican food business with its
strategic acquisition of Don Julio. This is particularly
encouraging as Mexican food is gaining popularity in the U.S.
processed food industry.
Tyson has many product launches in the pipeline for fiscal
2013. Its focus is mainly on hand-held, on-the-go items. The
company plans to enhance its portfolio with whole-grain items and
bolder flavors in this line. In the gluten-free line of items,
Tyson plans to add gluten-free nuggets and other gluten-free
Tyson has also launched NatureRaised Farms brand of chicken
which are free from antibiotics. The series of new launches come
at a time when the clients of Tyson, which comprise mainly of
Quick Service Restaurants, mid-scale restaurants, big box
retailers and club stores, small grocery chains, distributors,
convenience stores, the military and schools, will be interested
in new product launches amid a weakening consumer demand.
On May 6, 2013, Tyson delivered its fiscal 2013 first-quarter
adjusted earnings (excluding impairment charges and currency
translation gains) of 36 cents per share, missing the Zacks
Consensus Estimate of 46 cents by 21.7%. Quarterly earnings also
slipped significantly by 18.2% over the prior-year quarter
earnings of 44 cents.
Profits declined due to margin compression in the Chicken
segment due to higher feed cost, lower sales in the Beef segment
as consumers opted for low-fat chicken and meat products, as well
as a supply-demand imbalance in the Pork segment during the
quarter. Net sales declined 1.2% to $8.4 billion in the
Tyson lowered its fiscal 2013 earnings guidance. For fiscal
2013, the company expects sales to increase to approximately
$34.5 billion compared to $35.0 billion as anticipated
previously. The lowering of guidance was due to the expected
price increases caused by the decrease in domestic availability
of protein and rising raw material costs.
Tyson currently carries a Zacks Rank #3 (Hold). Other
favorable stocks in the retail and wholesale sector that are
worth considering include
Sanderson Farms Inc
), holding a Zacks Rank #2 (Buy).
HORMEL FOODS CP (HRL): Free Stock Analysis
SANDERSON FARMS (SAFM): Free Stock Analysis
TYSON FOODS A (TSN): Free Stock Analysis
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