Tyson Foods reported its 2023 third quarter results, and in that posting announced that it would be closing four of its chicken plants.
“While current market dynamics remain challenging, Tyson Foods is fully committed to our vision of delivering sustainable, top line growth and margin improvement,” says Donnie King, President and CEO, Tyson Foods. “I’m encouraged by the improvements we made this quarter, including our Tyson Core Business lines that continue to outpace our peers in volume growth.
“The difficult decision to close four chicken facilities in North Little Rock, Ark., Corydon, Ind., Dexter, Mo. and Noel, Mo., demonstrates our commitment to bold action and operational excellence as we drive performance, including lower costs and improving capacity utilization, and build on our strategy of making Tyson Foods stronger in the long-term.”
The company says that the USDA projects chicken production to increase approximately 3% in fiscal 2023 as compared to fiscal 2022. The company anticipates an adjusted operating margin of (1)% to 1% for fiscal 2023.
Despite this, Tyson says it is closing the four aforementioned facilities "to further optimize network asset utilization." The company says that it expects to shift production to other facilities. Operations at the impacted locations are expected to cease in the first two quarters of fiscal year 2024. The company adds that it continues to evaluate the financial statement impact of the closures for charges related to contract terminations, impairments, accelerated depreciation, severance and retention. "Based on our preliminary analysis, we currently estimate total charges of $300 million to $400 million which will be recorded through the planned closure dates," reads the company's statement.