Tyson Foods CEO Donnie Smith punctuated his opening remarks in the second-quarter 2016 earnings call by reeling off a dozen or more key performance superlatives now being enjoyed by the company since the acquisition of Hillshire Brands, and he concluded, “Through a game-changing acquisition and continuous improvement, Tyson Foods is a different company.”
Indeed, in what is typically the most challenging quarter of Tyson Foods’ fiscal year, the company achieved the following:
- Record second-quarter operating income up 27 percent to $704 million compared to the same period of 2015
- Record second-quarter total company operating margin of 7.7 percent
- Total synergies captured of $144 million; $67 million incremental synergies over the second quarter of 2015
The Tyson Foods business, in fact, is built for growth, Smith told analysts.
Tyson Foods, he said, has “advantaged brands in advantaged categories” and investors can expect to see the company grow 1.5 times the category growth.
Smith said he is very pleased with the initial performance of Tyson’s growth-driving initiative for the upcoming summer selling season. Total Tyson sales volume, as tracked by IRI in the most recent four weeks prior to the earnings call, was up 3 percent.
In September 2016, Tyson Foods plans to launch an extension of the Hillshire snacking platform and roll out the Tyson Naturals line of frozen chicken products, which feature all-natural ingredients and no antibiotics ever.
As Tyson innovates, Smith said, the company will align with customers to grow where the growth is, including in non-store retail or e-commerce, which is projected to grow three times faster than the rest of the market.
“We will continue to partner with the leading U.S. retailers testing click-and-collect models. Additionally, we are expanding our relationship with Amazon Fresh to sell fresh protein as well as partner with them around innovation,” he said.
There are plans this fall to launch Tyson Tastemakers, a line of chef-inspired meal kits in premium proteins for home delivery with Amazon Fresh.