Tyson Foods Inc. has decided to save costs by closing four poultry processing units.
On Monday’s announcement, plants in Arkansas, North Little Rock, Dexter, Corydon, Indiana, and Noel, Missouri, were slated for closure.
In the first half of fiscal 2024, Tyson will cease operations at the four factories and begin moving production elsewhere. Based on this early investigation, the corporation expects to incur costs of $300 million to $400 million.
Due to costs associated with plant closures and layoffs, Tyson unexpectedly lost money in the second quarter and lowered its sales projection in May.
In fiscal 2022, Tyson launched an initiative to reduce productivity costs by $1 billion by fiscal 2024. Over $700 million in cost reductions were announced by the corporation in fiscal 2022, which were used to cushion the blow of rising prices in the marketplace. Tyson’s second-quarter fiscal 2023 earnings were $1 billion, exceeding expectations by over a year.
In recent months, Tyson has been making an effort to save costs. The company concentrated operations in Arkansas late last year after shuttering its headquarters in Chicago and South Dakota. To maximize output from its remaining sites, the company announced in March that it would shut down its Arkansas and Virginia production facilities.
In April, Tyson cut 15 percent of its upper management and 10 percent of its corporate staff because of rising costs for labor, grain, and other inputs.
On Monday, the corporation also released its financial results for the fiscal third quarter. For the fiscal year ended July 1st, Tyson recorded a loss of $417 million, or $1.18 per share. The company earned $750 million, or $2.07 per share, in the prior fiscal year.
A $448 million goodwill impairment charge was taken in the current quarter.
The Springdale, Arkansas-based firm generated 15 cents per share in profit before asset impairment charges and restructuring expenses. Zacks Investment Research questioned financial experts and found that they predicted 34 cents per share earnings.
The $13.14 billion in revenue was down from the $13.5 billion recorded the year before.
Revenue for fiscal 2023 is projected to be between $53 and $54 billion by Tyson. Revenue is projected to be $53.74 billion by FactSet-surveyed analysts.
Before the market opened, share prices had dropped by 8%.
