Tyson Foods' Chicken Wings Carry Mixed Q2 Results Amid Beef Struggles

Tyson Foods (TSN) delivered a tale of two meats in its fiscal second quarter 2025 earnings report. While the chicken segment soared on surging prices and retail demand, the beef division languished under rising input costs and weak consumer spending. The mixed results left revenue flat year-over-year, but Tyson’s adjusted earnings per share (EPS) beat expectations, underscoring the company’s resilience in a volatile protein market.

Chicken Takes Flight

Tyson’s chicken business was the clear star, with sales of $4.035 billion rising 0.7% year-over-year. Operating income jumped 76.6% to $282.5 million, lifting margins to 7%—a stark contrast to 3.9% in the prior year. The surge was fueled by a 40% rise in breast meat prices, as consumers shifted to cheaper protein alternatives amid climbing beef prices. Retail demand for Tyson’s chicken products—think frozen wings and ready-to-cook meals—also held steady, offsetting weaker foodservice sales.

Beef’s Sinking Ship

The beef segment, however, struggled. Sales hit $5.0 billion (+1% YoY), but operating losses widened to $96.5 million, compared to a $34 million loss in the prior year. Margins contracted to 1.3%, as live cattle prices rose 12.8%—outpacing beef’s retail price increases. “Consumers are voting with their wallets,” said one analyst. “Higher beef prices are driving demand destruction.” Trade disputes also loomed large: tariffs on U.S. beef exports to Canada and Japan continue to crimp profitability.

Pork and Prepared Foods: Mixed Bag

Pork sales rose 1%, but operating income fell 43% to $18.8 million, as processing margins dropped 33.9% due to higher input costs. Prepared foods, Tyson’s high-margin segment, fared better: sales grew 1% to $2.428 billion, with operating income up 9.4% to $254.9 million. The division’s 10.5% margin highlighted the benefits of Tyson’s focus on value-added products, from hot dogs to frozen dinners.

Numbers That Matter

• Adjusted EPS: $0.92, up 48% YoY, beat the $0.84 consensus.
• Revenue: $13.07 billion, flat YoY, with $343 million in legal accruals dragging sales.
• Debt Reduction: $738 million paid down during the quarter, boosting liquidity to $3.2 billion.

Analysts and the Market

While Tyson’s adjusted results pleased investors—shares closed at $60.58, near the 52-week high—the GAAP EPS of $0.02 exposed the risks of non-operational charges. Analysts remain cautious, with a consensus “Neutral” rating and a $60.33 price target, just below current levels. “Chicken is flying, but beef is a drag,” said Wedbush analyst, Ian Zaffino. “Until beef margins stabilize, Tyson’s upside is capped.”

Risks on the Horizon

1. Beef’s Margin Pressures: Analysts project cattle prices will stay elevated through summer, squeezing profitability.
2. Trade Headwinds: Ongoing U.S.-Canada beef tariffs and Japan’s retaliatory duties could persist into 2026.
3. Input Costs: Feed and energy expenses remain volatile, with corn prices up 15% year-to-date.

Conclusion

Tyson Foods’ fiscal Q2 results paint a picture of a company balancing growth and headwinds. The chicken segment’s strength, driven by price hikes and shifting consumer preferences, has provided a critical lifeline. However, the beef division’s struggles—and the broader risks of trade disputes—threaten to limit Tyson’s full-year outlook. With adjusted operating income projected between $1.9 billion and $2.3 billion for fiscal 2025, management is banking on chicken’s momentum to offset red meat challenges.

Investors should monitor Tyson’s liquidity ($3.2 billion) and free cash flow ($1.0–$1.6 billion) as key buffers against volatility. While the stock’s current performance suggests optimism about Tyson’s long-term strategy, the path to sustained EPS growth hinges on whether beef margins stabilize—and whether Tyson can keep its wings flying.

Data as of May 2, 2025.