Meat&Poultry - December 2014 - 10

Business Notes

Tyson expects revenues to surpass $40B in 2015
Despite a weak fourth quarter, Springdale, Ark.-based

analysts, Smith said the acquisition was completed in the

Tyson Foods Inc. concluded a profitable fiscal 2014 and

fourth quarter and now the combined company promises

has high expectations for fiscal 2015 as the company reaps

a record-breaking fiscal 2015.

the benefits of its acquisition of Hillshire Brands.

Dennis Leatherby, executive vice president and CFO,

For the year ended Sept. 27, Tyson Foods' net income

quantified the reasons for Smith's optimism, telling ana-

rose to $864 million, equal to $2.48 per share on the com-

lysts the company expects revenues to top $40 billion for

mon stock, an increase compared with the previous year

the first time, forecasting the number to be closer to $42

when the company earned $778 million, or $2.26 per

billion for fiscal 2015. With record revenue growth, Ty-

share. Sales for the year totaled $37.6 billion compared

son continues investing in itself. "We spent $195 million

with $34.4 billion the previous year.

on capital expenditures for the fourth quarter and $632

"Two years ago, I told our team members, 'The turn-

million for the full fiscal 2014," he said. Capital expen-

around is over; it's time to turn it on,'" said Donnie Smith,

ditures in the coming year are slated to be $900 million,

president and CEO. "They did and the proof is in our sec-

increasing by nearly 50 percent.

ond year in a row of record sales and earnings.

Several times, Smith referenced the company's plans to
continue growing its chicken business as pricing for pork
and especially beef is expected to remain high to the advantage of the chicken segment. Specifically, growth in
Tyson's fully cooked and tray-pack offerings are expected
to flourish in early 2015.
"Demand for tray pack is growing as retail consumers
seek fresh, healthy options," he said. He clarified that the
emphasis on these products doesn't represent an increase
in supply, "but rather shifting capacity to a more valueadded product mix."
Also addressing the growing demand for antibioticfree chicken, the company expects to see double-digit
growth in its NatureRaised Farm brand. The company
is well positioned to grow the segment due in part to the
fact that domestic feed costs are expected to be down by

"It's Tyson 2.0 and we're a
different company."
-Donnie Smith

"This is an exciting time as we integrate Hillshire
Brands and Tyson Foods and I believe that when we look
back on this merger years from now, we'll see it as a wa-

approximately $350 million in the coming year.
"We have a diverse value-added portfolio and we don't
require record [high] chicken prices and cheap corn to do
well," Smith said. "Our strategy is steady growth, not a
commodity roller coaster ride."
Meanwhile, investing in brand building on the Hillshire
side of the business is expected to continue.

tershed event. We're setting higher expectations and an-

Smith mentioned that in the last fiscal quarter the com-

ticipating more growth and increased profitability, spe-

pany rolled out a line of Jimmy Dean frozen sandwiches

cifically in the Chicken and Prepared Foods segments. In

and protein-based bowls for lunch and dinner. Also, after

the long term, our Chicken segment should generate a 7

successful test marketing, the Hillshire Snacking platforms

percent to 9 percent return on sales, although we expect

are expected to grow in the coming year as well as Hillshire

fiscal 2015 to be particularly strong with a return of more

Farm Naturals sliced lunch meat, featuring cleaner labels.

than 10 percent."
In summing up the fiscal year in a Nov. 17 call with

* Meat&Poultry * December 2014 * www.MeatPoultry.com

In concluding his comments, Smith said, "It's Tyson
2.0 and we're a different company."

http://www.MeatPoultry.com

Meat&Poultry - December 2014

Table of Contents for the Digital Edition of Meat&Poultry - December 2014