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Tyson Foods (TSN) is trading modestly higher after reporting its Q2 (Mar) results this morning. The protein supplier beat EPS expectations, while revenue increased 4.4% yr/yr to $13.65 bln, in line with expectations. TSN also reaffirmed its FY26 revenue growth outlook of +2-4% and raised its adjusted operating income guidance to $2.2-2.4 bln.

• Chicken was the bright spot, with sales increasing 3.5% yr/yr to $4.29 bln, driven by a 1.7% increase in volume and 1.8% favorable price/mix. Adjusted operating margin expanded 230 bps to 12.2%, while adjusted operating income increased 27% to $523 mln.
• Prepared Foods sales increased 4.8% yr/yr to $2.51 bln, supported by a 0.4% increase in volume and 4.4% favorable pricing. Adjusted operating margin expanded 30 bps to 14.0%, while adjusted operating income increased 7% to $352 mln.
• Pork is benefiting from relative balance across supply, production, and retail/foodservice demand. Sales increased 27% yr/yr to $1.58 bln, supported by a 4.4% increase in volume and 1.3% favorable pricing. Adjusted operating margin fell to 2.6% from 4.6%, while adjusted operating income declined to $41 mln from $69 mln.
• Beef remains the main overhang as TSN's largest segment. Sales were essentially flat at $5.21 bln, as higher pricing offset a 13.1% volume decline. Adjusted operating loss widened to $(202) mln from $(113) mln, and TSN softened its FY26 Beef outlook to a loss of $(500)-(350) mln from $(500)-(250) mln.
• Importantly, the demand environment remains healthy as consumers continue to prioritize protein. The higher operating income guidance is supported by stronger Chicken expectations, with segment income now expected at $1.9-2.05 bln, up $200 mln at the midpoint. TSN reaffirmed its outlook for Prepared Foods, Pork, and International.

Briefing.com Analyst Insight

TSN's Q2 was mixed, with encouraging trends in Chicken, Prepared Foods, and Pork offset by continued pressure in Beef, which remains the main issue for the company. Chicken was the bright spot, benefiting from healthy demand for affordable protein, better mix, and stronger execution, while Prepared Foods continued to see share gains and demand for convenient, higher-protein products. Pork also remained stable, helped by relative balance across supply, production, and retail/foodservice demand. The issue continues to be Beef, as tight cattle supply and elevated cattle costs continue to pressure volumes and margins. Still, TSN raised its total adjusted operating income guidance on stronger Chicken expectations, with the outlook implying lower losses in the back half as footprint and utilization actions build. Overall, the report supports the view that TSN is making solid progress, but a more meaningful move likely depends on clearer evidence that Beef is becoming more manageable and recent operational actions are starting to support results.