Tyson (TSN), Oatly (OTLY) raise guidance after quarterly results

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Tyson (TSN), Oatly (OTLY) raise guidance after quarterly results

 Tyson (TSN), Oatly (OTLY) raise guidance after quarterly results
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Highlights

  • Tyson Foods, Inc’s (NYSE: TSN) GAAP operating income in fiscal 2021 was US$4,396 million, up 46% YoY, and in Q4, it was up 98% YoY to US$1,909 million.

  • Oatly Group AB (NASDAQ: OTLY) revenue was US$171.1 million in the third quarter ended September 30, 2021, an increase of 49.2% YoY.

  • Both the companies have revised their outlook after the results.

Tyson Foods, Inc. (NYSE: TSN) and Oatly Group AB (NASDAQ: OTLY) declared their quarterly results before the opening bell on Monday.

The TSN stock traded at US$82.25, up 1.26%, while OTLY stock traded flat at US$11.82 in the premarket session from their previous closing prices.

Tyson Foods, Inc. 

Tyson posted sales of US$47.05 billion for the fiscal year ended October 2, 2021, compared to US$43 billion in FY 2020. For Q4, its sales were US$12.8 billion.

The GAAP operating income for the fiscal year 2021 was US$4,396 million, 46% increase YoY, and adjusted operating income of US$4,288 million, 42% growth YoY. The GAAP EPS was US$8.34, up 48% YoY, and adjusted EPS was US$8.28, up 53% YoY.

Tyson’s total GAAP operating margin was 9.3%.

For Q4, 2021, the GAAP operating income was US$1,909 million, up 98% YoY, and adjusted operating income was US$1,152 million, up 26% YoY. The GAAP EPS increased by 107% YoY to US$3.71, and the adjusted EPS grew 35% from the previous year to US$2.30.

The company’s total GAAP operating margin was 14.9%.

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Segment-wise

Beef sales volume declined 15.4%, Pork sales volume fell 17.7%, Chicken sales volume decreased 5.9%, and Prepared Foods sales volume decreased 12.5% in Q4, 2021.

Outlook for fiscal 2022

The company plans to launch a new productivity program for a more agile organization and improved decision-making. It is targeting to save around US$1 billion in productivity costs by the end of FY 2024 and between US$300 and US$400 million in FY 2022.

The company expects the adjusted operating margin for the Beef segment to be between 9% and 11%, Pork and Chicken segments to be between 5% and 7%, each, and Prepared Foods to be around 7% to 9% in FY 2022. 

TSM expects the sales to be in the range of approximately US$49 billion to US$51 billion.

The company has a market capitalization of US$29.6 billion. TSN’s P/E ratio is 12.44, the dividend yield is 2.19%, and the annualized dividend is US$1.78. 

The Springdale, Arkansas-based company produces processed chicken and beef. Other products include processed pork and protein-based products.

The stock closed at US$81.23 on Nov 12, 2021, and it rose to around 26.06% YTD.

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 Q3 Results: Tyson Foods, Inc. (NYSE: TSN), and Oatly Group AB (NASDAQ: OTLY))

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Oatly Group 

Oatly reported revenue of US$171.1 million for the third quarter ended September 30, 2021, an increase of 49.2% YoY compared to US$114.7 million in Q3, 2020.

Its gross profit was US$44.9 million compared to US$36.0 million a year ago. However, the gross profit margin was 26.2% compared to 31.3% in Q3, 2020. The decline was due to increased logistics and container rates and expenses incurred for scaling-up activities.

The net loss attributable to shareholders of the parent company was US$41.2 million in Q3, 2021, compared to US$10.4 million in the corresponding period of the previous year.

Oatly booked EBITDA loss of US$36.5 million in Q3, 2021, compared to a loss of US$4.6 million in the previous year. The adjusted EBITDA loss was US$27.0 million, up from the previous year due to higher expenses on employees and operating costs.

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Outlook for fiscal 2021 

The company expects revenue to exceed US$635 million, up over 51%, in FY 2021. The capital expenditures are expected to remain between US$280 million and US$320 million. OATLY expects the production capacity to be around 600 million liters of finished goods at the end of 2021. Additionally, the company expects a gross profit margin of more than 40% and an adjusted EBITDA margin of approximately 20% in the long term.

The Malmo, Sweden-based company has a market capitalization of US$7.0 billion. The food and drink company has a presence in the US and Europe. Its products include Oat drinks and ice creams, Oatgurt, and Creamy Oats, etc.

Its stock fell nearly 41% since its IPO in May this year. Its closing price on November 12, 2021, was US$11.82.

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Bottomline

The Dow Jones US Consumer Goods Total Stock Market Index (DWCCGS) gave around 17.39% return YTD. Tyson has recorded strong quarterly and fiscal year results due to the growing demand for protein products. Oatly has also registered robust third-quarter results, helped backed by higher demand for its products globally. However, investors must analyze the companies carefully before investing in stocks.

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