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American consumers have been turning more cautious and pulling back on their meat purchases as higher rent and interest rates squeeze household budgets, hurting sales at multinational meat packers such as Tyson and Hormel Foods (NYSE:HRL).
The U.S. meat packer, which had bumped up meat prices last year, reported a 3% drop in quarterly net sales to $13.14 billion, below analysts’ expectations of $13.59 billion in Refinitiv data.
The biggest U.S. meat company by sales, Tyson has also seen its margins come under pressure as declining U.S. cattle herds force it to pay more for livestock, while a lingering drought has pushed animal feeding expenses further up.
In a bid to keep costs under control, Tyson has also been cutting jobs and closing certain chicken processing units.
On Monday, the company said it would close four more chicken facilities in the U.S. to reduce costs and improve capacity utilization.
Net loss attributable to Tyson came in at $417 million, or $1.18 per share, in the reported quarter, compared to a net income of $750 million, or $2.07 per share, a year earlier.
On an adjusted basis, the company earned 15 cents per share in the quarter ended July 1.
Tyson reaffirmed its full-year revenue forecast.
