Tyson Foods (NYSE:TSN) executives used the company’s fiscal first-quarter 2026 earnings call to emphasize momentum in Prepared Foods and Chicken, ongoing operational and portfolio initiatives, and a tougher outlook for Beef as cattle supplies remain constrained. Management also introduced a change in segment reporting designed to provide investors with greater transparency into how leaders evaluate performance.
First-quarter results and a change in segment reporting
CEO Donnie King said Tyson’s first-quarter results showed initiatives “clearly working,” with sales increasing to “more than $14 billion.” CFO Curt Calaway reported total company sales rose 6.2% year-over-year to $14.3 billion, noting the comparison was calculated excluding the effect of a $150 million legal contingency reserve recognized in the quarter.
Management highlighted a key reporting change: Tyson will now present results using “segment operating income,” which excludes corporate expenses and amortization from the segment level. King said the change reflects how he judges business effectiveness and accountability, and that it removes a largely fixed overhead burden from segment evaluations to “empower” business leaders to pursue growth and improve decision-making. Calaway said the shift is meant to increase transparency and improve comparability to other food producers; the company recast the prior three fiscal years of quarterly segment results to reflect the new format.
In Q1, corporate expenses and amortization were lower by $20 million, or 7.7%, versus the prior year quarter. In response to an analyst question, Calaway said the reduction was primarily due to lower team-member related costs, with some year-over-year decrease in amortization as well.
Prepared Foods and Chicken led operating performance
Prepared Foods posted sales growth of 8.1% versus last year, driven by volume, channel mix, and pass-through pricing. COO Devin Cole said segment operating income was $338 million, up $16 million year-over-year, reflecting progress on a multi-year plan to enhance profitability. Cole also cited solid fill rates with “room to improve,” supported by improved S&OP processes and efficiencies across plants and distribution.
On pricing and inflation, management said the sales increase in Prepared Foods was “not pure price,” but reflected mix and formula-based pass-through pricing—particularly in foodservice. Cole said commodity costs in the quarter were up about $100 million, but pricing was “catching up,” with beef and pork trim still elevated while other inputs stabilize.
The Chicken segment produced segment operating income of $459 million, with King citing a 10.9% margin. Cole said Q1 sales rose 3.6% year-over-year, driven entirely by volume, as Tyson’s product mix and diversified pricing strategies kept average selling price steady amid declines in commodity prices and disruptions tied to a temporary government shutdown. Management said the chicken business has now delivered five consecutive quarters of year-over-year volume and net sales gains.
In Q&A, King said Tyson’s chicken volume in Q1 was an all-time record, with strength where the company has been emphasizing growth. He cited branded fresh chicken volume up 9% and branded frozen volume up 12.2%, and said net sales were up 3.6% while pricing was flat compared to the prior year. He also pointed to USDA’s projection of 1% industry production growth, which he called “very manageable,” and said Tyson expects fiscal 2026 to resemble fiscal 2025 in terms of the overall chicken environment.
Beef remains pressured; footprint changes target utilization and efficiency
Tyson’s Beef business remained the primary headwind. King said the company made a strategic decision to close its Lexington, Nebraska facility and scale back operations at its Amarillo, Texas plant to a single shift. Those changes were implemented in January, but both King and Cole said first-quarter results did not reflect the impact of the adjustments because the moves were completed after the quarter ended.
Cole said Beef segment operating income declined versus the prior year, as higher cattle costs more than offset higher cutout values and healthy consumer demand. He described four key drivers of results in the beef business: cattle costs, cutout, drop credit, and manufacturing cost structure. He also cited additional freight impacts as Tyson worked to fill production needs amid regional supply deficits, and noted quarter-to-quarter variability from basis and derivatives used to risk-manage the business.
Management expects cattle supplies to remain tight through 2026 and 2027. In Q&A, Cole referenced USDA data showing the smallest U.S. cattle herd since 1951 and said availability remains a key issue, though he also pointed to early signs of a rebuild, including a 1% increase in replacement heifers. He cautioned that rebuilding can temporarily reduce supply as animals are held back from the production chain.
For fiscal 2026, Calaway forecast Beef segment operating income to be a loss of $500 million to $250 million, and noted the Beef outlook does not include costs related to facility closures.
Pork and International: stable conditions and continued momentum
In Pork, Cole said segment operating income margin increased 220 basis points to 6.7%, driven by network optimization and operational efficiencies. Management described hog supplies as adequate in the quarter, with projections for ample supply appearing favorable for the upcoming year. Cole also emphasized integration benefits, citing efforts to utilize pork bellies, hams, and trimmings across Tyson’s branded portfolio.
Tyson’s International segment “continued its momentum” and had another good quarter, according to King. For fiscal 2026, Calaway guided to International segment operating income of $150 million to $200 million, attributing recent performance to managing controllable costs, maximizing efficiencies, and lowering conversion costs.
Cash flow, capital allocation, and fiscal 2026 outlook
Calaway said Tyson’s capital allocation remains “disciplined, deliberate, and forward-looking,” focusing on financial strength, business investment, and shareholder returns. In Q1, operating cash flow was $942 million and capital expenditures were $252 million, producing free cash flow of just under $700 million. Dividends paid were $177 million. Tyson ended the quarter with $4.5 billion of liquidity and net leverage of 2.0x, down a tenth of a turn since year-end, and Calaway said the company reduced gross debt by $1.4 billion over the last 12 months. Tyson repurchased $47 million of shares in the quarter and returned $224 million to shareholders through dividends and repurchases.
For fiscal 2026, Tyson maintained its expectations for sales growth of 2% to 4% (on a comparative 52-week basis, as fiscal 2026 is a 53-week year). The company reiterated total company adjusted operating income guidance of $2.1 billion to $2.3 billion, interest expense of about $370 million, and a tax rate around 25%. Capex guidance remained $700 million to $1 billion. Tyson raised its free cash flow outlook to $1.1 billion to $1.7 billion, which Calaway said is “mostly associated” with expected improvements in working capital versus the prior outlook.
Segment operating income guidance for fiscal 2026 included:
- Beef: loss of $500 million to $250 million (excluding closure costs)
- Pork: $250 million to $300 million
- Chicken: $1.65 billion to $1.9 billion
- Prepared Foods: $1.25 billion to $1.35 billion
- International: $150 million to $200 million
- Corporate expenses and amortization: $950 million to $975 million
In closing remarks, King said the team navigated a “dynamic and challenging market landscape” in the quarter and emphasized Tyson’s focus on providing nutritious, affordable, and convenient protein as it moves through fiscal 2026.
About Tyson Foods (NYSE:TSN)
Tyson Foods, Inc (NYSE: TSN) is a multinational food company primarily engaged in the production, processing and marketing of protein-based and prepared food products. Founded in 1935 and headquartered in Springdale, Arkansas, the company is one of the world’s largest processors of chicken, beef and pork. Its operations span live animal procurement and farming relationships through slaughter, further processing and distribution, supplying raw protein and value-added prepared foods to retail, foodservice and industrial customers.
The company’s product portfolio covers fresh and frozen meats, branded and private-label prepared foods, and a range of value-added items such as ready-to-eat and ready-to-cook meals, snack and sandwich meats.
