Commodity prices have surged over the past year as farmers have struggled to keep up with burgeoning global demand. Tyson Foods, which hiked prices of its foods to contend with the rise, said those price rises were working, helping it to post second quarter earnings that mostly beat Wall Street expectations.
The Chicago Tribune reports the company said high costs for grains, which are used in feed, squeezed its profit margins. However, the company had previously moved to raise consumer prices as it looked to ensure it maintained profitability going into the new year. That move helped lower business costs and improve efficiency, and helped revenue rise 15.7 percent to $8 billion, beating the $7.54 billion many analysts had expected.
Now, Tyson said it expects its full-year sales figures to rise to more than $32 billion thanks to the price hikes. Tyson raised its chicken prices by 3.7 percent, and said its chicken sales climbed by 10 percent in the quarter to $2.74 billion. Even with the price increases, though, its operating margins in that unit declined to 1.4 percent from 4.6 percent.
Prices in its beef unit were raised by 19.6 percent, but sales rose 18.9 percent to $3.33 billion.
The Chicago Tribune reports the company said high costs for grains, which are used in feed, squeezed its profit margins. However, the company had previously moved to raise consumer prices as it looked to ensure it maintained profitability going into the new year. That move helped lower business costs and improve efficiency, and helped revenue rise 15.7 percent to $8 billion, beating the $7.54 billion many analysts had expected.
Now, Tyson said it expects its full-year sales figures to rise to more than $32 billion thanks to the price hikes. Tyson raised its chicken prices by 3.7 percent, and said its chicken sales climbed by 10 percent in the quarter to $2.74 billion. Even with the price increases, though, its operating margins in that unit declined to 1.4 percent from 4.6 percent.
Prices in its beef unit were raised by 19.6 percent, but sales rose 18.9 percent to $3.33 billion.
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