Meat processing giant Tyson Foods saw its shares surge by nearly 12 percent on opening bell Monday after the company reported forecast-beating fiscal first-quarter profits, boosted by higher consumer prices amid the broader inflationary environment.
The profit surge came on the back of a more modest rise in sales of $12.93 billion in the first quarter compared to $10.46 billion in the first quarter of 2021.
The meatpacking giant said that high consumer prices amid strong demand and supply-side constraints helped the company boost operating income in beef, chicken, and pork. Beef prices jumped by 32 percent in the quarter, with chicken up about 20 percent and pork 13 percent.
Tyson said it is looking to boost productivity, targeting $1 billion in productivity savings by the end of fiscal 2024 and $300 million to $400 million in fiscal 2022, relative to a fiscal 2021 cost baseline.
“We’re pleased with the results of the first quarter and of the steps that we are taking to improve productivity,” Donnie King, president and CEO of Tyson Foods, said in a statement. “Our performance reflects the resilience of our multi-protein portfolio even with continued volatility in the marketplace.”
It comes amid a broader inflationary trend that has seen consumer prices vault to levels not seen in decades, with upward pressure on wages, too.
Average hourly wages in January rose by an annual 5.7 percent, putting economists on alert for the stirrings of a possible wage-price spiral as concerns about the persistence of underlying inflationary pressures shift from supply-side bottlenecks to worker demands for higher pay.