Tyson Foods, Inc. (NYSE:TSN) reported worse-than-expected sales and earnings on Monday and lowered the profit outlook for 2017, shares tumbled more than 14 percent. The nation’s biggest meat processor also said its chief executive Donnie Smith will step down at the end of this year. The company president Tom Hayes will succeed Smith as the new CEO.
“The board’s decision to name Tom (Hayes) CEO at this time was based on both his track record and how his skills align with the company’s strategic direction and continuing evolution,” said John Tyson, chairman of the board and the founder’s grandson.
The company faces questions about whether it can maintain its high growth in the future as the company suffers from declining food prices and lower volume. The average prices fell 5.1 percent in the quarter, compared with the price a year earlier. Beef price dropped 14.9 percent. The company expected profit of $4.70 to $4.85 a share for the year ending September 2017. Analysts had projected earnings to be $4.98 per share.
For the fourth quarter, the company said profit surged 51.6 percent to $391 million, or $1.03 per share, compared with $258 million, or 63 cents a share, a year earlier. Excluding certain items, the company earned 96 cents a share, missing analysts’ estimate of $1.17 per share. Revenue fell 12.8 percent to $9.16 billion in the fourth quarter due to lower beef prices. Analysts had projected $9.38 billion. The stock fell 14.49 percent to $57.60.