Tyson: CFO Apologizes For Arrest, Profits Miss

During the company’s Q4 FY2022 earnings call on Monday, newly-appointed Tyson Foods CFO John R. Tyson said he was “embarrassed” and apologized for his arrest on charges of public intoxication and trespassing on November 6 .

“I take full responsibility for my actions,” Tyson said in a prepared statement. “This was an incident inconsistent with our company values as well my personal values. I just wanted you guys to hear this directly from me and to know that I’m committed to making sure this never happens again.”

John R. Tyson, the son of current company chairman John H. Tyson and great-grandson of founder John W. Tyson, was arrested last week after a woman returned to her home in Fayetteville, Arkansas late to find the 32-year-old executive undressed and sleeping in her bed. According to the local authorities, Tyson smelled of alcohol and could not verbally respond to questions.

Current Tyson president and CEO Donnie King followed up Tyson’s apology Monday by saying the company had a “strong, robust corporate governance process” and the independent board of directors would be conducting a thorough review of the matter.

Tyson was appointed CFO on October 2, succeeding Stewart Glendinning, who has moved into the role of president of prepared foods. Tyson had previously held the role of EVP and chief sustainability officer and was widely expected to eventually run the company. He is one of the youngest serving chief executives of a Fortune 500 company.

During the question-and-answer portion of the call, BMO Capital’s analyst Kenneth B Zaslow asked about the reasons for the recent shakeup to the executive team.

Tyson assured investors that his experience as a company executive for the past two years and his involvement in senior leadership level decisions prepared him to meet the needs of the CFO position.

“From a capital allocation standpoint or a strategy standpoint, you shouldn’t expect too many significant changes or departures from how things have been handled in the past,” he said. “These leadership moves are kind of over continuity rather than in radical change of any kind.”

Pork sales and higher than expected live cattle costs dragged down the company revenues.

Gross profits for Tyson’s FY 2022 were $6.6 billion compared to $6.5 billion in 2021. The company’s end of year report announced a total year GAAP operating margin and adjusted operating margin of 8.3%, slightly lower than the 9.3% in 2021. Sales were up 7% in Q4 to $13.7 billion versus $12.8 billion in the same period last year.

The Springdale, Arkansas-based meat giant said that its Prepared Foods segment was overcoming a challenging macro-environment and reported relatively flat sales volume in Q4. The company noted that it was investing strategically in merchandising and advertising to support its various brands, and expects to see margins of 8% to 10% in prepared foods driven by volume growth and “disciplined revenue management.”

Tyson forecasts FY margin growth for 2023 of 6% to 8% on $55 billion to $57 billion in sales, accounting for a 3% to 7% growth overall.