Tyson Foods, Inc. (NYSE:TSN) reported first-quarter fiscal 2026 sales of $14.313 billion on Monday, up 5.1% from the prior year. Shares were trading lower in post-earnings activity following the release.
Adjusted EPS of 97 cents, down 15% YoY, beat an analyst estimate of 94 cents, while revenue exceeded an estimate of $14.085 billion. GAAP EPS was 24 cents, down 76% year over year.
The company said sales increased 6.2% excluding the impact of a $150 million increase in legal contingency accruals that was recognized as a reduction to Sales.
GAAP operating income was $302 million, down 48%, while adjusted operating income (non-GAAP) was $572 million, down 13%. Total company GAAP operating margin was 2.1%, and adjusted operating margin was 4.0%.
“Our first quarter results reflect solid execution across our portfolio,” said Donnie King, President & CEO of Tyson Foods. “Prepared Foods delivered top and bottom-line growth while Chicken reported its fifth consecutive quarter of year-over-year volume gains.”
“As protein demand continues to increase, our consistent share gains demonstrate we are well-positioned to capture this momentum. I’m encouraged by the progress we’ve made and confident we will drive continued improvement across the controllable aspects of our business in fiscal 2026.”
During the earnings conference call, a Tyson Foods executive said the company expects chicken to be the preferred protein in the upcoming year.
Donnie King said the company has downsized and streamlined its beef operations to improve efficiency, capacity use and long-term competitiveness, calling it necessary as losses over the past two years have become "unacceptable."
Management expects tight U.S. cattle supplies through 2026 and 2027, which should support stronger demand for chicken, but warned that the full financial impact of the beef plant closures won't be visible until future quarters, leaving near-term results uncertain.
Segment performance
Beef sales rose to $5.771 billion from $5.335 billion, as pricing gains of 17.2% offset a 7.3% volume decline. The segment posted an operating loss of $319 million and an adjusted operating loss of $143 million, reflecting $90 million in legal contingency accruals.
Pork sales were $1.609 billion, compared with $1.617 billion a year earlier. Operating income was $50 million, while adjusted operating income was $111 million, excluding $60 million in legal contingency accruals.
Chicken sales increased to $4.212 billion from $4.065 billion. Segment operating income was $450 million, and adjusted operating income was $459 million.
Prepared Foods sales rose to $2.673 billion from $2.473 billion. Segment operating income was $322 million, while adjusted operating income was $338 million.
International sales were $582 million, compared with $584 million a year earlier. Segment operating income was $41 million, and adjusted operating income was $46 million.
Cash flow and balance sheet
Cash provided by operating activities was $942 million, down $89 million from the prior year. Free cash flow (non-GAAP) was $690 million, down $70 million from the prior quarter.
Cash and cash equivalents were $1.278 billion as of December 27, 2025. The company reported total liquidity of $4.5 billion and said it reduced total debt by $468 million during the quarter.
The company said that beginning in the first quarter of fiscal 2026 it no longer allocates corporate expenses and amortization to segments and now separately discloses those items, with International identified as a reportable segment.
Outlook
For fiscal 2026, Tyson said it expects sales to increase 2% to 4% year over year and reiterated its sales guidance of $55.530 billion to $56.619 billion.
The company expects total adjusted operating income of $2.1 billion to $2.3 billion and free cash flow of $1.1 billion to $1.7 billion.
It anticipates an adjusted operating loss in Beef of $500 million to $250 million, adjusted operating income of $250 million to $300 million in Pork, $1.65 billion to $1.90 billion in Chicken, $1.25 billion to $1.35 billion in Prepared Foods, and $150 million to $200 million in International.
TSN Price Action: Tyson Foods shares were up 0.14% at $65.42 at the time of publication on Monday. The stock is trading near its 52-week high of $65.96, according to Benzinga Pro data.
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