(Reuters) – Tyson Foods Inc said on Monday it would temporarily close plants as needed in the battle with the coronavirus outbreak and expects meat sales to fall in the second half of this year as shutdowns hammer restaurants and other food outlets.
FILE PHOTO: Tyson Foods brand frozen chicken wings are pictured in a grocery store freezer in the Manhattan borough of New York City, U.S. May 11, 2017. REUTERS/Carlo Allegri
Shares of the Jimmy Dean sausages maker, one of the world’s biggest meat processors and a key cog in the food supply chain, fell 7% in premarket trading.
Tyson said demand from retailers for its beef, pork and poultry products had jumped in recent weeks but was not enough to offset the loss in sales to restaurants and caterers hit by strict lockdown measure to control the spread of the virus.
The company has been among those at the heart of a row over employee safety, after President Trump ordered processing plants to stay open to protect U.S. food supplies, drawing a backlash from unions that said at-risk workers need more protection.
Tyson, Smithfield Foods Inc [SFII.UL] and JBS USA [JBS.UL] have all had to shutter plants in recent weeks as the respiratory illness spread widely through the meat-processing facilities.
“We are experiencing multiple challenges related to the pandemic. These challenges are anticipated to increase our operating costs and negatively impact our volumes for the remainder of fiscal 2020.”
“Operationally, we have and expect to continue to face slowdowns and temporary idling of production facilities from team member shortages or choices we make to ensure operational safety,” the company said.
The company’s sales rose 4.3% to $10.89 billion, in the second quarter ended March 28. Analysts had expected revenue of $10.96 billion, according to IBES data from Refinitiv.
Net income attributable to Tyson fell to $364 million, or $1 per share, from $426 million, or $1.17 per share, a year earlier. [nGNX1Vn8q9]
Excluding items, the company earned 77 cents per share, missing estimates of a profit $1.04 per share.
(This story refiles to add dropped word said in first paragraph)
Reporting by Uday Sampath in Bengaluru; Editing by Krishna Chandra Eluri and Patrick Graham