Chicken Segment Outlook
Q: What's driving growth and potential upside in Chicken for FY'25?
A: Management highlighted that the Chicken business is fundamentally different and better than a year ago, achieving over $1 billion in AOI for FY'24, exceeding prior expectations of up to $700 million. " " They expect AOI between $1 billion to $1.2 billion in FY'25, a high single-digit growth at midpoint. " This growth is driven by over $500 million in operational improvements, with an additional $185 million planned, independent of market conditions. " " They are investing around $100 million to drive a mix shift towards value-added products, leveraging upgrades in quality, packaging, and a new advertising campaign. " " "

Prepared Foods Performance
Q: What are the drivers for Prepared Foods growth in FY'25?
A: The company reported the best Prepared Foods performance since 2018 and expects over 10% AOI growth in FY'25, driven entirely by controllable improvements. " " Key drivers include operational efficiencies with significant improvements in yield and throughput, a 26% reduction in distressed sales, and service levels improved over 170 points year-over-year. " They're focusing on core business distribution gains and leveraging a robust innovation pipeline, carrying momentum from '24 into '25. "

Beef Segment Challenges
Q: How is Tyson addressing challenges in the Beef segment?
A: Tyson is guiding to a loss of $400 million to $200 million in Beef for FY'25 due to continued challenges from tight cattle supply. " " They are implementing operational improvements to cushion against market pressures, focusing on efficiencies in plants, yields, and utilization of their six harvest assets. " " They aim to minimize losses during this cycle and position for future growth. " "

Operational Improvements Across Segments
Q: Can you quantify operational improvements across segments?
A: In Chicken, Tyson achieved over $500 million in operational improvements in FY'24 and plans an additional $185 million in FY'25, independent of markets. " " In Prepared Foods, they realized significant gains in yield and throughput, reduced distressed sales by 26%, and improved service levels over 170 points year-over-year. " In Beef, they improved operating costs year-over-year and are leveraging data analytics to drive efficiencies and yield improvements. " "

Capital Allocation and Leverage
Q: How is Tyson approaching capital allocation and leverage targets?
A: Tyson reduced net leverage from 4.1x to 2.6x in FY'24 and plans to invest $1 billion to $1.2 billion in CapEx for FY'25. " Free cash flow is expected to exceed the annual dividend, estimated at around $700 million. " They remain committed to an investment-grade credit rating and a long-term target leverage of at or below 2x " , and focus on improving returns on invested capital. "

Impact of Higher Chicken Supply
Q: Will increased chicken supply affect Tyson's outlook?
A: Management acknowledges increased egg sets and chick placements but notes that industry challenges in hatch and livability mean excess chicks aren't reaching processing plants. " " They have accounted for potential supply increases in their guidance and believe supply and demand are fairly balanced. " " Tyson is more insulated due to its focus on strategic customers and value-added products. "

Shift from Chicken to Beef Promotions
Q: Are retailers shifting promotions from Chicken to Beef?
A: Despite higher beef prices, demand remains strong, and retailers are employing various strategies, including promoting beef cuts to drive market baskets higher. " " Tyson expects beef demand to continue into '25 and is leveraging this through convenience products and innovation. " "

Network Optimization and Plant Closures
Q: Are there further plant closures or network changes planned?
A: Tyson evaluates assets based on age, profitability, scale, competitiveness, and future capital requirements. " While they have made decisions to optimize their network, including plant closures, they are focused on controlling what they can and executing with excellence. "

Prepared Foods Start-up Costs
Q: How are start-up costs affecting Prepared Foods profitability?
A: Start-up costs in FY'24 were around $20 million. " The company expects to lap these costs in FY'25 but also notes lower depreciation in the first half due to overhead. "

Impact of New Administration
Q: How might a new administration affect Tyson?
A: Management stated they have successfully operated for over 90 years, regardless of political changes, and will focus on controlling what they can control. "

Capital Deployment and Cash Flow Generation
Q: How is Tyson planning future capital deployment?
A: Tyson plans to continue investing in the business and returning cash to shareholders, with CapEx between $1 billion to $1.2 billion in FY'25. " They emphasize improving returns on invested capital and maintaining financial strength. "

Further Improvements in Beef Segment
Q: Can operational improvements lessen Beef segment losses?
A: While acknowledging that 85% of the Beef business is influenced by uncontrollable market spreads, Tyson is implementing efficiencies to minimize losses and position for future success. "

Prepared Foods Cadence
Q: How will Prepared Foods growth unfold across FY'25?
A: Management expects a more balanced performance across the year, differing from historical seasonality, due to ongoing operational efficiencies. "

Expansion of Fully Cooked Lines
Q: Is Tyson expanding fully cooked production lines?
A: After successfully selling out five fully cooked lines in Danville, Virginia, Tyson is working on adding the next five lines to support growth in value-added products. "