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Tyson Foods reported Q3 FY2026 revenue of $13.9 billion, down −0.12% from Q3 FY2025, and the company missed the consensus revenue estimate of $14.1 billion. The company reported adjusted EPS, as counted by the consensus, of $0.99, below the $1.03 consensus estimate; diluted EPS under the company’s reported results was $0.52, compared with $0.17 a year earlier.
The filing said sales were relatively flat because lower Beef sales were largely offset by higher sales in the other segments. Tyson Foods said higher average sales prices offset lower volume, with Beef and International volume declines partly offset by volume increases in Pork, Chicken and Prepared Foods. The filing reported gross margin of 6.64%, versus 8.22% a year earlier, while operating margin was 2.61%, versus 1.87%. The filing said third-quarter operating income was affected by a $98 million legal contingency accrual, $73 million of executive leadership transition charges and $14 million of restructuring-related charges. Tyson Foods reported free cash flow of $525.0 million, compared with $799.0 million in Q3 FY2025.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $13.9 billion | $13.9 billion | −0.12% |
| Diluted EPS | $0.52 | $0.17 | 205.9% |
| Gross margin | 6.64% | 8.22% | −1.6 percentage points |
| Operating margin | 2.61% | 1.87% | 0.7 percentage points |
| Free cash flow | $525.0 million | $799.0 million | −34.3% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $0.99 | $1.03 | Missed by 3.88% |
| Revenue | $13.9 billion | $14.1 billion | Missed by 1.91% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
Donnie King said consumer demand for protein remained resilient despite pressured consumer sentiment and elevated inflation, while customers were making value-conscious choices. He said Prepared Foods recorded its third consecutive quarter of volume and sales growth, with Q3 sales up 1.7%, or $42 million, to $2.6 billion, and said higher commodity costs outpaced pricing in the quarter. King said the company expects the benefit from moderating commodity costs to reach production and inventory later in the fourth quarter and into fiscal 2027.
King said Chicken generated $488 million of segment operating income at an 11.2% margin, with retail and food-service volume up 3.8% and total Chicken volume up 1%. He attributed Chicken’s pricing and volume performance to branded and value-added mix, customer relationships, revenue management and operational execution. In response to analyst questions about industry chicken supply and fiscal 2027, King said most of Tyson’s Chicken volume is committed before chick placement and said the company expects continued volume and profitability growth, without providing fiscal 2027 guidance.
King said Beef recorded a $138 million segment operating loss as volume declined 15.9% and pricing increased 12.1%, reflecting constrained cattle supply and higher costs. He said footprint optimization actions delivered as expected but were outweighed by USDA margin compression, and said the company was concentrating on customer mix, revenue management, network productivity and costs. Curt Calaway said the maintained Chicken outlook implied a comparatively balanced fiscal-year result, rather than the fourth-quarter pattern of the prior year.
King told analysts that Prepared Foods faced about $30 million of higher commodity costs in Q3, concentrated predominantly in beef trim. He said declining pork commodity costs were in inventory during Q3 and that their benefit would flow through in Q4 and into fiscal 2027. King also said fuel and distribution costs had been a headwind since April, although customer freight is generally passed through with a lag.
Guidance
Tyson Foods narrowed FY2026 sales-growth guidance to 2.50% to 3.50%. The company lowered FY2026 adjusted operating-income guidance from $2.2 billion to $2.4 billion to $2.1 billion to $2.3 billion. Tyson Foods raised the low end of its Prepared Foods adjusted operating-income range from $1.25 billion to $1.35 billion to $1.3 billion to $1.35 billion, and changed Beef guidance from a loss of −$500.0 million to −$350.0 million to a loss of $650 million to $500 million. The company narrowed free-cash-flow guidance from $1.2 billion to $1.8 billion to $1.3 billion to $1.7 billion and capital-expenditure guidance from $700.0 million to $1.0 billion to $700.0 million to $900.0 million.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Tax rate, non-GAAP | FY2026 | 25.0% | — | New |
| Free cash flow | FY2026 | $1.3 billion–$1.7 billion | $1.2 billion–$1.8 billion | Held |
| Capex | FY2026 | $700.0 million–$900.0 million | $700.0 million–$1.0 billion | Cut |
| Revenue growth | FY2026 | 2.50%–3.50% | — | New |
| Operating income, non-GAAP | FY2026 | $2.1 billion–$2.3 billion | — | New |
| Operating expenses, Corporate, non Gaap | FY2026 | $950.0 million–$975.0 million | — | New |
| Operating income, International, non Gaap | FY2026 | $150.0 million–$200.0 million | — | New |
| Operating income, Prepared Foods, non Gaap | FY2026 | $1.3 billion–$1.4 billion | — | New |
| Operating income, Chicken, non Gaap | FY2026 | $1.9 billion–$2.1 billion | — | New |
| Operating income, Pork, non Gaap | FY2026 | $250.0 million–$300.0 million | — | New |
| Tax rate | FY2026 | 25.0% | — | New |
| Operating expenses, Corporate | FY2026 | $950.0 million–$975.0 million | — | New |
| Operating income, International | FY2026 | $150.0 million–$200.0 million | — | New |
| Operating income, Pork | FY2026 | $250.0 million–$300.0 million | — | New |
| Operating income, Beef | FY2026 | −$500.0 million–−$350.0 million | — | New |
| Operating income, Chicken | FY2026 | $1.9 billion–$2.1 billion | — | New |
| Operating income, Prepared Foods | FY2026 | $1.3 billion–$1.4 billion | — | New |
| Operating income | FY2026 | $2.2 billion–$2.4 billion | — | New |