Things Are Not Going Well at Tyson
I write about different companies in my blog and newsletter, and it is always interesting to watch how things develop. This week is a good time to check in on Tyson.
Tyson’s Big Move
In early October, Tyson announced that it was closing its Chicago office and consolidating operations in Springdale, Arkansas. This was a big shift; in recent years Tyson had expanded its Chicago presence, in an effort to attract top marketing and finance talent to its branded products group. The team in Chicago led innovation and managed brands like Jimmy Dean and Hillshire Farm.
At the time, I wrote that it was a bad move because people weren’t going to relocate, so Tyson would lose all the expertise it had built up. This meant that either Tyson was retreating from its efforts to build great brands and instead focusing on its commodity protein businesses such as chicken and beef, or it was just a poor decision. People sometimes make bad choices.
Latest Results
So how have things been going at Tyson since the announcement?
Not well.
As expected, virtually the entire Chicago team resigned. I don’t think Tyson publicly released the final relocation figures, but people at Tyson tell me more than 90% of the Chicago marketers left the company.
The CFO was arrested.
Tyson last week announced dreadful results. CEO Donnie King stated, “…this quarter was definitely a tough one.” That was an accurate assessment. Operating income fell from $1,156 million to a loss of of $(49) million. For the most recent six months, operating income has declined from $2,611 million to $418 million.
Not surprisingly, the stock has dropped like a stone. Tyson’s stock price is down from about $65 back on October 6 when it announced the relocation to $49 today, a drop of 25%. The S&P 500 is up more than 10% over the same period. In early 2022 Tyson stock traded at almost $100 a share.
Worse Than It Looks
While the overall results are terrible, the situation is actually much worse than it seems.
In the latest financial results, Tyson’s commodity businesses delivered horrible results, with adjusted operating income in the 1H of FY 2023 falling from a profit of $2,155 million last year to a loss of $(77) million. The company attributed this to an unusual confluence of factors.
The branded products business – which used to be based in Chicago – did well. Through the 1H of FY 2023, adjusted operating income increased from $449 million to $499 million, a gain of +11%. The businesses did even better in the second quarter. Tyson celebrated the fact that market shares were looking good. Donnie King observed, “Winning with customers and consumers is a key priority, and it’s clear we’re having success with both.”
The problem is that there is a significant lag effect when managing brands. Building a brand and developing innovative new products isn’t quick. The results coming in today are from programs researched and developed last year, or the year before. The Tyson team clearly did some great work in 2022.
Which means that you have to be worried about Tyson’s Chicago move. What happens in late 2023 and 2024? All the programming for that period will now be developed by, well, I wonder who. Everyone responsible for the great Q1 and Q2 results left.
Perhaps Tyson will recruit a brilliant marketing team in Springdale that will be even more capable than the terrific team that Tyson had in Chicago, and lost. Some people like Springdale, and there are good people there. Just not a lot of them.
Last time I wrote about Tyson I said I was hanging onto my stock because I was sitting on a gain and the stock was well off its high. I’m now sitting on a loss. I wonder if I should sell and take the loss or look with hope far into the future when perhaps Tyson leadership will realize that you need a great team to build great brands. There are bumpy days ahead.
Claryville Plant/Alexandria Kentucky is Racist and Discrimination covering up alot including Upper Management/Head of H.R. Ask the Caucasian Supervisor on 2nd shift what does “CS” stands for on the Lil Smokies package , covering up for her buddies, erasing points along with stepping over Employees!
There’s a lot of Racial Discriminated Supervisors,Leads and Upper Management @the Claryville Plant/Alexandria Kentucky. I am living proof,I was Terminated because I wrote Corporate letters about a couple of Supervisors to where upper Management/Head of H.R. there are covering up alot of Bull-shit. Erasing Employees Points, covering up their days off. It’s a shame that that Plant has lost so many Great ppl including Managers because of what’s going on there right now. Ask the Caucasian Supervisor on 2nd shift what does “CS”stands for on the Lil Smokies
Tyson said I had to take an experimental DNA changing vaccine. Tyson should go broke because lots of people have AIDS and have had miscarriages and myocardial etc. This is illegal, immoral and stupid to force workers to take the death jab. Many like me had to find another job.
I work in there. Its not going to get better. Us northerners have a much different work ethic. After July 31, its going to get worse.
Tyson eufaula plant cook plant runs short on meat and truck drivers that cuts time and employees going home early is the reason i left
Tyson fired me over hear say after two years and getting employee of the month six months ago I was a safety in my at material handling at Tyson in Amarillo ..they fired me after I just got custody of my 12 year old son ..shame on Tyson
Yeah i second that, sounds like his buddy lost his office job hundreds of miles from the production lines. Wish you pencil pushers spent one hour on the factory floor… and fuck tyson for the vax mandates.
I Worked at Tysons Vernon Tx n I’ma Wright. I loved Tysons. Drove an hr away out of town to work. Then moved out thr. Their employees pursuit you 4 no reason. After you quit n move on they continue 2 pursuit you n ruin your life. The company is getting Suited 4 their employees running after people n me. Some of their people pursuitd me when I was a little kid n injured me very badly multiple xs. They dissapatd my Twin. N Now their trying 2 hurt my son. N set his yard on fire.
You make no sense what does tyson have to do with tou being a little kid? You might want to stop writing comments while drunk.
The comms and marketing team at Tyson are in shambles, too. They did higher a new Chief Growth Officer; however, they have gone through two different VPs in the last year. They have very toxic leaders and a toxic environment due to both VP’s influence.
The recent 10% cut back of management cut their last graphic designer in corporate comms and their senior social media manager. Many people on the team are actively searching for new employment. The ship really does seem to be sinking.
“There are good people in Springdale just not alot of them”. Who the fuck are you ?
Hi Michael—I was noting that Springdale is a smaller city, with a population of about 85,000.
The real reason Tyson is suffering right now is not the marketing, its getting quality workers, they fired a lot over not getting vaxxed, and it hasnt been the same since.
I like your article!! Lot of truth!