Growth in demand for chicken products and increase in sales volumes resulted in record first quarter sales for Tyson Foods, Inc., according to the company’s Q1-2015 financial results announced Jan 30.
"Tyson's fiscal year is off to a great start with our first full quarter as a combined company producing record sales and adjusted operating income," said Donnie Smith, president and chief executive officer of Tyson Foods. "We used our strong cash flows to pay down debt by $650 million in the quarter.
For the fiscal first quarter ended Dec. 27, Tyson Foods reported a net profit of $309 million, $55 million more than the Q1-2014. In addition, the company sales across all the segments climbed 23.5% to $10.82 billion.
Although lower feed costs assisted with decrease in ingredients cost of $110 million during the first quarter, chicken products accounted for the strongest demand increase. The chicken segment rose 3.1% in volume and 4.7% in sales to $2.78 billion this quarter.
Similar, a growth in the demand for pork products was also noted by the company. The pork segment benefiting from higher prices, up 7%, and increased volume 1.1%, sales climbed to $1.54 billion.
Lower cattle supplies decreased beef sales volume in Q1-2015 however the average sales price did increase. For the beef segment, sales were calculated at $4.39 billion with 20.9% increase in average price but 2.7% drop in volume.
Acquiring Hilllshire Brands helped the company to more than double its prepared-food sales to $2.13 billion, representing a 89.5% volume growth.
In its fiscal outlook for 2015, Tyson Foods expects domestic animal protein production to increase approximately 1% over last year. As well, the company is anticipating higher grain prices which will boost its feed ingredients costs.