How Tyson Foods' Business Has Been Hurt by the Coronavirus

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.

10 stocks we like better than Tyson Foods
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Tyson Foods wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of August 1, 2020


Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More