Q4 2023 Tyson Foods Inc Earnings Call

Good morning, everyone and welcome to the Tyson Foods fourth quarter 2023 earnings Conference call all participants will be in a listen only mode.

Speaker 1: Good morning, everyone, and welcome to the Tyson Foods fourth quarter 2023 earnings conference call. All participants will be in a listen only mode. Should you need assistance, please send to a conference specialist by pressing the star key followed by zero. After today's presentation...

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After todays presentation, there will be an opportunity to ask questions.

Speaker 1: To ask a question, you may press star and then one on your touchtone telephones. To answer all your questions, you may press star and two on your touchtone telephones.

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Please also note today's event is being recorded and at this time I'd like to turn the floor over to Sean Cornett.

Speaker 1: Please also note today's event is being recorded and at this time I'd like to turn the floor over to Sean Cornett, VP of Investor Relations. Sir, you may begin.

V P of Investor Relations, Sir you may begin.

Speaker 2: Good morning and welcome to Tyson Foods fiscal fourth quarter 2020 three earnings conference call.

Good morning, and welcome to Tyson Foods fiscal fourth quarter 2023 earnings conference call.

Speaker 2: On today's call, Tyson's President and Chief Executive Officer Donnie King and Chief Financial Officer John R. Tyson will provide some prepared remarks followed by Q&A.

On today's call Titans, President and Chief Executive Officer, Donnie King Chief Financial Officer, John Our Tyson will provide some prepared remarks, followed by Q&A.

Speaker 2: Additionally, joining us today are Brady Stewart, Group President Beef, Pork, and Chief Supply Chain Officer. Melanie Bolden, Group President Prepared Foods and Chief Growth Officer. Wes Morris, Group President Poultry, and Amy Tu, President International.

Additionally, joining us today are Brady Stewart, President beef, pork and chief supply chain officer.

Melanie Bolden group, President prepared foods, and Chief growth Officer Wes.

West Morris group, President poultry and Amy to President International.

Speaker 2: We have also provided a supplemental presentation, which may be referenced on today's call and is available on Tyson's investor relations website and via the link in our webcast.

We have also provided a supplemental presentation, which may be referenced on today's call and is available on Titans Investor Relations Web site and via the link on our webcast.

Speaker 2: During today's call, we will make forward-looking statements regarding our expectations for the future.

During today's call, we will make forward looking statements regarding our expectations for the future.

Speaker 2: These forward-looking statements made during this call are provided pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

These forward looking statements made during this call are provided pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

Speaker 2: Forward looking statements include comments reflecting our expectations, assumptions, or beliefs about future events or performance that do not relate solely to historical period.

Forward looking statements include comments, reflecting our expectations assumptions or beliefs about future events or performance that do not relate solely to historical periods.

Speaker 2: These forward looking statements are subject to certain risks and uncertainties and assumptions, which may cause actual results to differ materially from our current project.

These forward looking statements are subject to certain risks and uncertainties and assumptions, which may cause actual results to differ materially from our current projections.

Speaker 2: Please refer to our forward-looking statements disclaimers on slide 2, as well as our SEC filings, for additional information concerning risk factors that could cause our actual results to differ materially from our projections. We assume no obligation to update.

Please refer to our forward looking statements disclaimers on slide two as well as our SEC filings for additional information concerning risk factors that could cause our actual results to differ materially from our projections.

We assume no obligation to update any forward looking statements.

Speaker 2: Please note that references to earnings per share, operating income, and operating margin in our remarks are on an adjusted basis unless otherwise noted.

Please note that references to earnings per share operating income and operating margin and our remarks are on an adjusted basis unless otherwise noted.

Speaker 2: For reconciliation of these non-GAAP measures to their corresponding GAAP measures, please refer to our earnings press release. See you soon withlikely on our next episode of persuasion captivity show, sleep engagement now.

For reconciliation of these non-GAAP measures to their corresponding GAAP measures. Please refer to our earnings press release.

Now I'll turn the call over to Dani.

Speaker 3: Thanks, Sean, and thank you to everyone for joining us this morning. Earlier this morning, we announced our fourth quarter and total fiscal year 2023 results.

Thanks, Sean and thank you to everyone for joining us this morning.

Earlier this morning, we announced our fourth quarter and total fiscal year 2023 results in Q4, we saw another quarter of sequential improvements in our overall earnings as we continue to make good progress in improving our performance.

Speaker 3: In Q4, we saw another quarter of sequential improvements in our overall earnings as we continue to make good progress in improving our performance.

Speaker 3: And I want to thank our team members for delivering these results in what continues to be a tough macro environment.

I wanted to thank our team members for delivering these results and what continues to be a tough macro environment.

Speaker 3: Consumer demand for protein remains relatively stable, and we are well positioned to meet this demand, giving us confidence in our long term prospects.

<unk> demand for protein remains relatively stable and we are well positioned to meet this demand.

Confidence in our long term prospects.

Speaker 3: Q4 also wraps up an unusual fiscal year where all of our core protein categories were challenged, and yet one where our branded business delivered solid results while we continue to see challenging market dynamics, our broader portfolio has set up well for the future.

Q4 also wraps up an unusual fiscal year, where all of our core protein categories were challenged and yet one where our branded business delivered solid results. While we continue to see challenging market dynamics, our broader portfolio are set up well for the future.

Speaker 3: As we anticipated, our results continue to improve sequentially in chicken, with Q4 building on the momentum we gained in Q3 as part of a much better second half of Physical 23 after a difficult start.

As we anticipated our results continued to improve sequentially in chicken with Q4 building on the momentum we gained in Q3 as part of a much better second half of fiscal 'twenty three after a difficult start.

Our brands continue to perform well and we grew market share across our core business fine outperforming our peers.

Speaker 3: Our brands continue to perform well and we grew market share across our core business line, outperforming our peers.

Speaker 3: This helps our prepared food segment generate solid, adjusted operating income in 2023.

This helped her prepared foods segment generate solid adjusted operating income in 2023.

Market dynamics in beef and pork were challenging this past year, causing spread compression although for different reasons. Despite these headwinds our goal remains to be best in class operators. So that we can manage these businesses as efficiently as possible.

Speaker 3: Market dynamics in beef and pork were challenging this past year, causing spread compression, although for different reasons. Despite these headwinds, our goal remains to be best-in-class operators so that we can manage these businesses as efficiently as possible. We remain focused on what we can control.

We remain focused on what we can control.

One of our priorities is to execute with excellence our operations have improved across the business and we have a long runway of opportunities to perform better.

Speaker 3: Our operations have improved across the business, and we have a long runway of opportunities to perform better.

Controlling the controllable extends to capital allocation as well.

Speaker 3: where we will remain disciplined with CAPEX and working capital.

Well, we will remain disciplined with Capex and working capital.

We continued to execute our multi point plan focused on efficiency and modernization you've seen us take bold actions to improve performance and everything remains on the table to drive operational excellence and address inefficiencies.

Speaker 3: We continue to execute our multi-point plan focused on efficiency and modernization.

Speaker 3: You've seen us take bold actions to improve performance, and everything remains on the table to drive operational excellence and address inefficient

Speaker 3: Our plan is working and we are seeing tangible benefits of our efforts to end fiscal 2023.

Our plan is working and we are seeing tangible benefits of our efforts to end fiscal 2023.

Speaker 3: I remain very confident in our long-term strategy and optimistic about our future.

I remain very confident in our long term strategy and optimistic about our future.

Speaker 3: Rest assured that we're leaving no stone unturned to drive long-term value for our shareholders.

Rest assured that we're leaving no stone unturned to drive long term value for our shareholders.

Let's dive into an overview of segment performance by starting with an update on market share or.

Speaker 3: Let's dive into an overview of segment performance by starting with an update on market share.

Speaker 3: Our brands continued to outpace the broader food and beverage category in volume growth across the retail channel in Q4. Our volume grew while the overwhelming majority of food and beverage peers saw volume decline.

Our brands continue to outpace the broader food and beverage category and volume growth across the retail channel in Q4, our volume grew while the overwhelming majority of food and beverage peers saw volume declines.

Speaker 3: Our core business lines including the iconic retail brands Tyson, Jimmy Dean, Hillshire Farm, and Ballpark saw Q4 volume growth of 3.2% versus last year, far outpacing our competition. Those four brands also all hold favorite brand status with consumers over our nearest competitor by a wide margin.

Our core business lines, including the iconic retail brands.

Jimmy Dean Sarkar, and ballpark saw Q4 volume growth of three 2% versus last year far outpacing our competition. Those four brands also all whole favorite brand status with consumers over our nearest competitor by a wide margin.

Speaker 3: We continue to show market share leadership in most of the retail categories in which we compete, delivering both pound and dollar share gains across our core business.

We continue to show market share leadership in most of the retail categories in which we compete delivering both Pam and dollar share gains across our core business lines.

Speaker 3: We are accelerating food service where our focus six categories, including value added chicken, breakfast sausage, dinner sausage, pepperoni pizza toppings, bacon, and Philly steak outpaced the broad line industry in volume growth in the quarter, both versus last year and sequential.

We are accelerating foodservice, where our focus six categories, including value added chicken breakfast sausage dinner sausage pepperoni pizza toppings, Bacon and Philly steak outpaced the broad line industry in volume growth in the quarter, both versus last year and sequentially.

Speaker 3: We have a strong food service portfolio and are aligning with key customers as we build momentum for the future.

We have a strong foodservice portfolio and are aligning with key customers as we build momentum for the future.

Speaker 3: Speaking of winning with customers, we're proud to have made the top ten for the second year in a row in the most recent Kantor Power Rankings. In fact, Tyson finished in the top ten in seven of the nine categories they measure. As we continue to focus on meeting customer needs and planning the future together with Tyson.

Speaking of winning with customers. We're proud to have made the top 10 for the second year in a row and the most recent kantar power rankings. In fact Tyson finished in the top 10 in seven of the nine categories. They measure as we continue to focus on meeting customer needs and planning the future together with them.

Speaker 3: Moving to our segments, beginning with prepared foods. As I mentioned, our brands perform well in Q4. In fact, over the last year, nearly three-quarters of U.S. households purchased a TysonCorps Business Line product, which is an increase of 90 basis.

Moving to our segments, beginning with prepared foods as I mentioned, our brands performed well in Q4 in fact over the last year nearly three quarters of U S households purchased a Tyson core business line product, which is an increase of 90 basis points. While this is impressive across our portfolio.

Speaker 3: While this is impressive across our portfolio, it's worth noting that our product with the highest penetration rate is only in about a third of households, leaving us room for continued growth.

It's worth noting that our product with the highest penetration rate is only in about a third of households, leaving us room for continued growth.

Speaker 3: This performance in retail helped prepared foods have a solid year in fiscal 23 with strong growth in AOI.

This performance in retail helped prepared foods have a solid year in fiscal 'twenty three with strong growth in Iowa.

Speaker 3: As you know, our branded foods business is a strategic growth pillar for the future. We believe it is imperative to support our brands with marketing and advertising. As consumers begin to face what could be a more difficult economic environment, we ramped up our map support for our brands in the second half of the year and will continue to do so as we move into fiscal 2024.

As you know our branded foods business as a strategic growth pillar for the future. We believe it is imperative to support our brands with marketing and advertising.

As consumers began to face what could be a more difficult economic environment, we ramped up our map support for our brands in the second half of the year and we will continue to do so as we move into fiscal 2024.

Speaker 3: While the full-year AOI for chicken was a modest loss, our progress toward improved performance continued in Q4, with sequential improvement versus Q3. In fact, this is the second consecutive quarter with more than $100 million in sequential AOI increases.

While the full year AOE for chicken was a modest loss our progress toward improved performance continued in Q4 with sequential improvement versus Q3. In fact this is the second consecutive quarter with more than $100 million in sequential AOR increases I am proud of what our team has accomplished over the past.

Speaker 3: I'm proud of what our team has accomplished over the past six months.

Six months.

Not only did we hold onto the operational enhancements. We made in Q3, we made incremental improvements in yield and then our live operations. This allowed us to take advantage of improving market conditions, including lower grain costs, leading to a positive margin to end the year.

Speaker 3: Not only did we hold onto the operational enhancements we made in Q3, we made incremental improvements in yield and in our live operation.

Speaker 3: This allowed us to take advantage of improving market conditions including lower grain costs leading to a positive margin to end the year.

Speaker 3: As we head into new fiscal year, we expect a better outlook for input costs while seeing the benefits of some of the bold actions we took this year.

As we head into new fiscal year, we expect a better outlook for input costs, while seeing the benefits of some of the bold actions. We took this year.

Coming into fiscal 'twenty, three we expect it to be under pressure due to limited catalyst plot. This trend held true as cattle cost depreciated at a faster rate than the wholesale price of box be eroding export opportunities due to our strong U S dollar and low price of competing ex borders and <unk>.

Speaker 3: Coming into fiscal 23, we expected beef to be under pressure due to limited cattle supply. This trend held true as cattle costs appreciated at a faster rate than the wholesale price of boxed beef, eroding export opportunities due to a strong U.S. dollar and low price of competing exporters, and ultimately creating a very tight spread scenario.

Really creating a very tight spread scenario. We also expected to see signs of a rebuild of the herd to surface as cattle prices moved higher however, this did not materialize.

Speaker 3: We also expected to see signs of rebuild of the herd to surface as cattle prices moved higher. However, this did not materialize.

Speaker 3: Until significant heifer retention and subsequent herd rebuilding takes place, we expect challenging supply conditions to remain.

That's a significant heifer retention and subsequent herd rebuilding takes place we expect challenging supply conditions to remain.

Speaker 3: In this context, while the timing remains uncertain, we will be prepared by focusing on operational distance.

In this context, while the timing remains uncertain, we will be prepared by focusing on operational discipline.

Speaker 3: Moving to pork, as you know in fiscal 23 the industry suffered from supply and demand imbalances which negatively impacted spreads. While we are seeing some signs of improving spreads and lower grain costs, there is still an imbalance between supply and demand of pork. Our team is focused on running the business as efficiently as possible while continuing to review all the options.

Moving to poor as you know in fiscal 'twenty three the industry suffered from supply and demand imbalances, which negatively impacted spreads while we're seeing some signs of improving spreads and lower grain costs. There is still an imbalance between supply and demand of pork. Our team is focused on running the biz.

As efficiently as possible, while continuing to review all of the options.

Speaker 3: We saw significant sequential and year-over-year improvement in AOI and Q4 driven primarily by improving spreads and operational enhancements.

We saw significant sequential and year over year improvement in Oi in Q4, driven primarily by improving spread and operational enhancements.

Before I turn the call over to John to review our financials in FY 'twenty for guidance I want to give you my priorities for the coming year.

Speaker 3: Before I turn the call over to John to review our financials and FY24 guidance, I want to give you my priorities for the coming year. First is improving our financial strength with a focus on cash. I want to emphasize that we will be disciplined and prudent with capital while remaining committed to our dividend as the primary way of returning cash to shareholders.

First is improving our financial strength with a focus on cash I want to emphasize that we will be disciplined and prudent with capital while remaining committed to our dividend as the primary way of returning cash to shareholders.

Speaker 3: As you saw in our earnings press release this morning, we increased our dividend for the 12th consecutive year.

As you saw in our earnings press release. This morning, we increased our dividend for the 12th consecutive year.

Speaker 3: We will continue to evaluate our production footprint and network to drive efficient.

We will continue to evaluate our production footprint and network to drive efficiencies as you saw we've made significant changes in chicken by announcing the closure of six of our older less efficient plant, which we expect to improve our capacity utilization and mix.

Speaker 3: As you saw, we've made significant changes in chicken by announcing the closure of six of our older, less efficient plants, which we expect to improve our capacity utilization and mix.

And a similar move to leverage efficiencies and reduce network redundancies. We also recently made the difficult decision to take two of our smaller fresh meat case ready value added facilities offline.

Speaker 3: Production from these locations will shift to larger, more efficient plants, and our harvest capacity, sales volume, and importantly our customers will see no impact. We are reviewing whether there are similar opportunities across our sector.

Production from these locations will shift to larger more efficient plants and our harvest capacity sales volume and importantly, our customers will see no impact we are reviewing whether there are similar opportunities across our segments.

Speaker 3: In chicken, we will remain focused on further enhancing our competitiveness going forward. Prepared Foods was the profit engine for the company last year. We want to sustain and build on that strength by supporting our brands and driving momentum in food service while being responsive to changes in the market conditions. Some of the key focus areas are making better use of our data, shifting more of our map support to digital media, and being disciplined with revenue management.

And chicken, we will remain focused on further enhancing our competitiveness going forward.

Prepared foods was the profit engine for the company last year, we want to sustain and build on that strength by supporting our brands and driving momentum in foodservice, while being responsive to changes in the market conditions. Some of the key focus areas are making better use of our data shifting more of our mats support to digital media and being <unk>.

Disciplined with revenue management.

Speaker 3: In beef, multiple outcomes are possible during the current cattle cycle.

And beef multiple outcomes are possible during the current catalyst cycle. We believe we have best in class assets and team members and are aligning with the right suppliers and customers, giving us confidence that we'll be prepared for all of them.

Speaker 3: We believe we have best-in-class assets and team members and are aligning with the right suppliers and customers, giving us confidence that we'll be prepared for all of them.

Speaker 3: In Port, we believe we have a bright future ahead of us and are excited about the team we've built that continues to drive operational improvement and synergies with our prepared food

We believe we have a bright future ahead of US and are excited about the team. We've built that continues to drive operational improvements and synergies with our prepared foods business.

Speaker 3: As we said before, we're taking a hard look at our cost structure to drive operational

As we said before were taking a hard look at our cost structure to drive operational excellence. Our ongoing productivity initiatives are focused on things that can be deployed at scale enterprise wide, including procurement logistics and digitalization.

Speaker 3: Our ongoing productivity initiatives are focused on things that can be deployed at scale, enterprise-wide, including procurement, logistics, and digitalization.

Speaker 3: These are a few of the initiatives that will make us a fundamentally stronger business as we go forward. With that, I'll turn the

These are a few of the initiatives that will make us a fundamentally stronger business as we go forward.

With that I'll turn the call over to John.

Speaker 4: Thank you, Donny. Let me start with a quick summary of our total company results and then review our individual segments.

Thank you Donnie let.

Let me start with a quick summary of our total company results and then review our individual segments.

Speaker 4: Our sales were down year over year in Q4, and for fiscal 23, driven by pork and chicken, where we saw a reduction in price per pound.

Our sales were down year over year in Q4 and for fiscal 'twenty, three driven by pork and chicken, where we saw a reduction in price per pound.

Speaker 4: The decline in adjusted operating profit for both periods was driven by lower profitability in beef industry.

The decline in adjusted operating profit for both periods was driven by lower profitability in beef and chicken.

Speaker 4: While profit in Q4 was down substantially versus last year, it's important to note that it continued to improve on a sequential basis, and adjusted EPS more than doubled compared to Q3.

While profit in Q4 was down substantially versus last year. It's important to note that it continued to improve on a sequential basis and adjusted EPS more than doubled compared to Q3.

Speaker 4: Challenges remain, but we continue to drive efficiencies and improve our operations, and we believe we're headed in the right direction.

<unk> remain but we continue to drive efficiencies and improve our operations and we believe we're headed in the right direction.

Speaker 4: Now, on to the individual segment results, starting with prepared.

Now on to the individual segment results starting with prepared foods.

In prepared foods revenue was down modestly in Q4 year over year, driven by lower Bacon pricing.

Speaker 4: In prepared foods, revenue was down modestly in Q4 year over year, driven by lower bacon prices.

Speaker 4: This lower pricing was offset by volume growth, which highlights the strength of our brand.

This lower pricing was offset by volume growth, which highlights the strength of our brands.

Speaker 4: AOI improves slightly year-over-year, despite lower sales. Our ongoing productivity initiatives in easing inflation offset lower pricing, increased marketing, advertising, and promotional support, and the onset of startup costs for our new facility.

<unk> improved slightly year over year, despite lower sales.

Our ongoing productivity initiatives and easing inflation offset lower pricing increased marketing advertising and promotional support and the onset of startup costs for our new facilities.

Speaker 4: AOI margin declined sequentially in Q4 due to seasonality, increased brand support, and startup costs. However, the $151 million of AOI this segment generated is the second highest Q4 result in the past five years. In full year, fiscal 23 AOI grew by more than $100 million, representing growth of nearly 14% year over year.

Margin declined sequentially in Q4 due to seasonality increased brand support and startup costs. However, the $151 million of AOR. The segment generated is the second highest Q4 result in the past five years and full year fiscal 'twenty three AOR grew by more than $100 million representing growth of nearly 14% year.

Over here.

Now moving to chicken.

Speaker 4: Now, moving to chicken. Sales declined 10% year over year in the quarter driven by lower pricing, reflecting primarily lower commodity

Sales declined 10% year over year in the quarter, driven by lower pricing, reflecting primarily lower commodity protein prices.

Speaker 4: Volume grew modestly in Q4 versus last year, driven by continued sell-through of finished goods inventory, and this was partially offset by a decline in production.

Volume grew modestly in Q4 versus last year, driven by continued sell through of finished goods inventory and this was partially offset by a decline in production with.

Speaker 4: This decrease in production highlights our ongoing focus on balancing supply with our customers.

This decrease in production highlights our ongoing focus on balancing supply with our customers' demand.

Speaker 4: Year-over-year profitability declined primarily due to lower commodity chicken pricing, but this was partially offset by lower input costs and operational efficiency.

Year over year profitability declined primarily due to lower commodity chicken pricing, but this was partially offset by lower input costs and operational efficiencies.

Speaker 4: On a sequential basis, lower grain cost and productivity enhancements drove another quarter of AOI improvement. In fact, when we compare to Q4 to Q2, chicken AOI increased by more than $240 million.

On a sequential basis, lower grain cost and productivity enhancements drove another quarter of AOR improvement in fact, when we compare to Q4 to Q2 chicken AOR increased by more than $240 million.

And beef revenue increased modestly year over year in Q4, with lower head throughput offset by higher pricing.

Speaker 4: In beef, revenue increased modestly year over year in Q4 with lower head throughput offset by higher price.

Speaker 4: Operating profit was down, reflecting compressed spreads, primarily due to higher cattle costs.

Operating profit was down reflecting compressed spreads primarily due to higher capital cost.

As we've been discussing all year beef is likely to continue to face headwinds, including in fiscal 'twenty four as we don't expect the ongoing tightening of cattle supply and spread compression to abate until her rebuilding is underway.

Speaker 4: As we have been discussing all year, beef is likely to continue to face headwinds, including in fiscal 24, as we don't expect the ongoing tightening of cattle supply and spread compression to abate until herd rebuilding is underway.

Speaker 4: Moving on to pork, revenue was down nearly 7% driven primarily by lower pricing due to softer global demand.

Moving on to pork revenue was down nearly 7% driven primarily by lower pricing due to softer global demand.

Speaker 4: AOI for the quarter was a modest loss, but importantly, it increased by more than $40 million year-over-year and by more than $60 million sequentially, as spreads improved along with operating costs.

<unk> for the quarter was a modest loss, but importantly increased by more than $40 million year over year and by more than $60 million sequentially as spreads improved along with operating performance.

Speaker 4: Before moving to our capital priorities, it's worth noting that our international business posted solid Q4 and fiscal 23 results driven by growing penetration across our key markets and channels. We remain focused on market share growth and continued operational excellence as we ramp up our new facility.

Before moving to our capital priorities, it's worth noting that our international business posted solid Q4 in fiscal 'twenty three results driven by growing penetration across our key markets and channels. We remain focused on market share growth and continued operational excellence as we ramp up our new facilities.

Now to our financial position and capital priorities, we're building financial strength investing in our business and returning cash to shareholders, primarily via our dividend remain the priorities of our capital allocation strategy.

Speaker 4: Now, to our financial position and capital priorities, we're building financial strength, investing in our business, and returning cash to shareholders, primarily via our dividend, remain the priorities of our capital allocation strategy.

As Donnie said earlier, we will remain disciplined and prudent with capital we came into fiscal 'twenty three with the plan to spend roughly $2 5 billion in Capex. As you saw we ended up reducing our spend by $600 million as we reacted to market conditions, driving lower profitability and impacting our operating cash flow.

Speaker 4: As Donnie said earlier, we will remain disciplined and prudent with capital. We came into fiscal 23 with a plan to spend roughly $2.5 billion in CapEx. As you saw, we ended up reducing our spend by $600 million as we reacted to market conditions driving lower profitability and impacting our operating cash flow.

Speaker 4: We were also disciplined managing working capital, which was a source of cash this year.

We were also disciplined managing working capital, which was a source of cash this year.

Speaker 4: We ended the year with $3 billion of liquidity and net leverage of just over four times. Our balance sheet management approach remains unchanged as we are committed to building financial strength, maintaining our investment grade credit rating, and returning to net leverage of at or below two times net debt to EBITDA.

We ended the year with $3 billion of liquidity and net leverage of just over four times, our balance sheet management approach remains unchanged. We are committed to building financial strength, maintaining our investment grade credit rating and returning to net leverage of at or below two times net debt to EBITDA.

During the year, we returned $670 million to shareholders via dividends and $354 million in share repurchases primarily to offset dilution.

Speaker 4: During the year, we returned $670 million to shareholders via dividends and $354 million in share repurchases.

Speaker 4: We remain committed to maintaining a disciplined capital allocation strategy, ensuring that we deploy resources to maximize long-term shareholder value. Now, let's review our

We remain committed to maintaining a disciplined capital allocation strategy, ensuring that we deploy resources to maximize long term shareholder value.

Now, let's review our outlook for fiscal 2024.

Fiscal 'twenty three was a challenging year and we took a hard look at how we manage the business in times like these and how we can better communicate and manage expectations for investors.

Speaker 4: Fiscal 23 was a challenging year and we took a hard look at how we manage the business in times like these and how we can better communicate and manage expectations for investors.

Speaker 4: Our focus for Fiscal 24 is to manage the business for profit and cash dollar generation. These are our internal goals and what we want investors to understand. So for this year, as you'll see, we are giving guidance in dollar terms instead of a margin percentage.

Our focus for fiscal 'twenty for us to manage the business for profit and cash dollar generation. These are our internal goals and what we want investors to understand so for this year as Youll see we are giving guidance in dollar terms instead of a margin percentage.

Well there are some topline uncertainties within the individual protein categories. We expect our overall sales to be approximately in line with fiscal 'twenty three.

Speaker 4: While there are some top-line uncertainties within the individual protein categories, we expect our overall sales to be approximately in line with fiscal 23.

Moving on to the segments.

Speaker 4: Prepared Foods has been a solid and stable driver of operating cash flow. We expect that to continue in fiscal 24, driven by volume growth, discipline revenue management, and productivity, offset by MAP support for our brands and the startup costs for our new facilities, as well as risks from changes in consumer behavior. Reflecting these dynamics,

Prepared foods has been solid and stable driver of operating cash flow.

We expect that to continue in fiscal 'twenty, four driven by volume growth disciplined revenue management and productivity offset by map support for our brands and the startup costs for our new facilities as well as risks from changes in consumer behavior.

Reflecting these dynamics.

Speaker 4: Our expectations for adjusted operating income is in the range of $800 million to $1 billion.

Our expectations for adjusted operating income is in the range of $800 million to $1 billion.

Speaker 4: To help navigate any potential shifts in consumer spending and sentiment, we are focused on the most efficient marketing, advertising, and promotions that drive the highest ROI and the most effective consumer engagement in demand.

To help navigate any potential shifts in consumer spending and sentiment. We are focused on the most efficient marketing advertising and promotions to drive the highest ROI in the most effective consumer engagement and demand.

Speaker 4: To help meet demand and value-added brands and categories, we had previously invested in new capacity, and we expect to incur startup costs in fiscal 24.

To help meet demand and value added brands and categories. We had previously invested in new capacity and we expect to incur startup costs in fiscal 'twenty four.

On the chicken.

Speaker 4: Our operational turnaround in chicken is progressing as we expected. We demonstrated sequential profit improvement in Q3 and again in Q4. We anticipate operational improvement to continue into next year, and that along with lower input costs, net of pass-through pricing, the segment should generate between $400 million and $700 million of adjusted operating income.

Our operational turnaround in chicken is progressing as we expected we demonstrated sequential profit improvement in Q3 and again in Q4.

We anticipate operational improvement to continue into next year and that along with lower input costs net of pass through pricing. This segment should generate between $400 million $700 million of adjusted operating income.

Now onto our beef segment.

Speaker 4: When and how fast meaningful heifer retention will take hold is uncertain at this point, and this influences our outlook for our beef segment in 2024.

When and how fast meaningful heifer retention will take hold is uncertain at this point and this influences our outlook for our beef segment in 2024.

Speaker 4: Multiple outcomes are possible and we will be prepared for all of them to operate as efficiently as we can.

Multiple outcomes are possible and we will be prepared for all of them to operate as efficiently as we can.

Speaker 4: Our guidance for this segment is a loss of $400 million to break even for the year, reflecting uncertainty in market dynamics.

Our guidance for this segment is a loss of $400 million to breakeven for the year, reflecting uncertainty and market dynamics.

Speaker 4: Now on to our pork segment, where we see momentum in the business.

Now onto our pork segment, where we see momentum in the business.

Speaker 4: As spreads begin to improve and we continue to execute, we expect AOI to improve versus last year to roughly break even for fiscal 2020.

As spreads begin to improve and we continue to execute we expect AOR to improve versus last year to roughly breakeven for fiscal 2024.

Speaker 4: For the total company, we've given a range of outcomes for each segment, but we expect any outsized weakness or strength in any one area to be balanced by the remainder of the portfolio. In other words, neither the low end nor high end of the range is anticipated to happen simultaneously across all the businesses. As a result, we expect our total company AOI for fiscal 24 to be between 1.0 and 1.5 billion dollars.

For the total company, we've given a range of outcomes for each segment, but we expect any outsized weakness or strength in any one area to be balanced by the remainder of the portfolio in other words, neither the low end or high end of the range is anticipated to happen simultaneously across all the businesses. As a result, we expect our total company AOR for fiscal 'twenty.

And four to be between one point and $1.5 billion.

To further help understand the shape of the year, let me provide some context on the quarterly phasing, while we foresee more typical seasonality in our business for next year things like start up costs in prepared foods and rising capital costs will impact Q1, and Q2 and generally shift profitability to the back half of fiscal 'twenty. Four. In addition, we are monitoring potential impacts of the consumer.

Speaker 4: To further help understand the shape of the year, let me provide some context on the quarterly phasing. While we foresee more typical seasonality in our business for next year, things like startup costs and prepared foods and rising cattle costs will impact Q1 and Q2, and generally shift profitability to the back half of fiscal 24. In addition, we are monitoring potential impacts to the consumer of higher interest rates and inflation, which could create some volatility.

<unk> of higher interest rates and inflation, which could create some volatility.

Now to round out the key P&L items, we anticipate interest expense to be roughly $400 million for the year and our tax rate to be approximately 23%.

Speaker 4: Now to round out the key P&L items, we anticipate interest expense to be roughly $400 million for the year and our tax rate to be approximately 23%.

We moderated our pace of Capex in fiscal 'twenty three in a challenging environment. We ended the year with $375 million of expenditures in Q4, which annualized to one $5 billion as.

Speaker 4: We moderated our pace of CapEx in fiscal 23 in a challenging environment. We ended the year with $375 million of expenditures in Q4, which annualizes to $1.5 billion. As we maintain tight controls on our spending in line with profitability and cash flow, we expect CapEx for the year to be between $1.0 and $1.5 billion.

As we maintain tight controls on our spending in line with profitability and cash flow, we expect capex for the year to be between one point and $1.5 billion.

Speaker 4: While there are a range of possible outcomes for AOI, we expect to manage our working capital in CapEx so that we're free cash flow positive for the year.

While there are a range of possible outcomes for ally, we expect to manage our working capital and Capex. So that we're free cash flow positive for the year.

Speaker 4: In summary, while the current operating environment remains difficult, we are making improvements across our operations and remain optimistic on our long-term process.

In summary, while the current operating environment remains difficult, we are making improvements across our operations. We remain optimistic on our long term prospects. We have great teams growing demand for our products and the right portfolio mix to win in the marketplace now I'll turn the call back over to Sean for Q&A instructions.

Speaker 4: We have great teams, growing demand for our products, and the right portfolio mix to win in the marketplace. Now, I'll turn the call back over to Sean for Q&A instructions. Thanks, John .

Thanks, John we will now move on to your question. Please recall that our caution on forward looking statements and non-GAAP measures apply both to our prepared remarks and the following Q&A.

Speaker 2: Please recall that our cautions on forward looking statements and non-GAAP measures apply both to our prepared remarks and the following Q and a. Operator.

Operator, please provide the Q&A instructions.

Speaker 1: Ladies and gentlemen, at this time, we'll begin that question and answer session. To ask a question, you may press star and then one on your touchtone telephone.

Ladies and gentlemen at this time, we'll begin our question and answer session to ask a question you May Press Star and then one on your Touchtone telephone.

Speaker 1: If you are using a speakerphone, we do ask that you please pick up your handset prior to pressing the keys. We withdraw your question.

If you are using a speaker phone, we do ask that you. Please pickup your handset prior depressing the keys.

Withdraw your question you May press star into.

Speaker 1: Once again, that is star and then one to join the question queue. At this time, we will pause momentarily.

Once again that is star and then one to join the question queue.

At this time, we will pause momentarily to assemble the roster.

Speaker 1: And our first question today comes from Adam Samuelsson from Goldman Sachs. Please go ahead with your question. Yes. Thank you.

And our first question today comes from Adam Samuelson from Goldman Sachs. Please go ahead with your question.

Yes. Thank you good morning, everyone.

Speaker 5: Good morning, Adam. Good morning. So I guess the first question, John , Donnie, I'd love to get a little bit more color as we think about the high and low end of the segment profit ranges in chicken, beef, and prepared foods specifically, kind of how do we think about what gets to the high and low end of those ranges? What do we think are the key year-on-year kind of profits?

Good morning, Adam.

I'm sorry.

My first question John.

John Donny I'd love to get a little bit more color as you think about the high and low end of the segment profit ranges and chicken beef and prepared foods, specifically kind of how how do we think about what gets to the high and low end of those ranges. What do we think are the key year on year kind of profit.

Speaker 5: drivers, increases in chicken and decreases in beef in particular, to help kind of narrow the range of kind of company level.

Drivers increases in chicken than that.

Decreases in beef in particular.

Dale.

Kind of narrow the range of kind of company level outcomes.

Okay. Adam this is donnie thanks for the question. This morning, and thank you for being with us.

Speaker 3: Adam, this is Donnie. Thanks for the question this morning and thank you for being with us. You know, as we said earlier, 2023 was a very unusual year. One that I've not seen where all core protein categories were challenged at the same time.

As we said earlier 2023 was a very unusual year.

One that I have not seen where all core protein categories were challenged at the same time.

Speaker 3: You know, and at the same time, our brands continue to perform well, outperforming the broader food and beverage category.

And at the same time, our brands continued to perform well.

Performance broader food and beverage category.

Speaker 3: The demand for protein remains strong. We're controlling the controllables. We're focused on efficiency, modernization, and cost structure.

The demand for protein remains.

<unk> strong we're controlling the controllable.

We're focused on efficiency modernization and cost structure.

Speaker 3: You know, over this past year, we've taken bold actions to improve performance. We're managing the.

Over this past year, we've taken bold actions to improve performance.

May to managing the business for cash.

Speaker 3: We also have pulled down our capital spend and if you go back to 22 We were we spent 2.6 billion in 23 We pulled that down to 1.9 billion and we're projecting between one and one and a half billion in 24 We will continue to return

We also have pull down our capital spend and if you go back to 'twenty two.

We spent $2 6 billion in 'twenty, three we pulled that down to $1 9 billion and we're projecting between one and one 5 billion in 2004.

We will continue to return cash to shareholders.

Speaker 3: Predominantly through the dividend and we shared that earlier today. We had the 12th consecutive year of increasing dividends Yeah, we're winning

Predominantly through the dividend and we shared that earlier today, we had the 12 consecutive year of increasing dividends.

We're winning with customers and consumers.

Speaker 3: We do have advantaged brands and advantaged categories and are very proud to be in the top ten for the second year in a row with Kantar Power Rankings. We've seen sequential improvements across all...

Do have advantaged brands in advantaged categories, and we're very proud to be in the top 10 for the second year in a row with Kantar power rankings.

We've seen sequential improvements.

Across all the businesses in the second half of 'twenty three.

Speaker 3: We expect fiscal 24 to be better year over year in cash flow and profit.

We expect fiscal 'twenty four to be better year over year in cash flow and profitability.

Speaker 3: Chicken AOI improving considerably and prepared foods continuing to perform well.

Chicken.

Improving considerably and prepared foods continuing to perform well.

Speaker 3: You know, in short, our plan is working and delivering tangible results.

In short our plan is working and delivering tangible results.

Speaker 3: FY 24 is off to a great start and I could not be more excited about our future.

524 is off to a great start and I could not be more excited about our future.

Speaker 3: We do have a good plan. We do have the right team.

We do have a good plan.

We do have the right team and.

Speaker 3: And we are executing at levels I've not seen in a long, long time.

And we are executing at levels not seen in a long long time.

<unk>.

Speaker 4: In terms of individual segments, John , do you want to add something to that? Yeah, Adam, I think your question was around what gets you to the high or bottom end of the range in a few different segments. What I can tell you is...

In terms of individuals' segment, John you add something to that yes, Adam I think your question was around what gets you to the high or bottom end of the range.

And in a few different segments.

Can tell you is.

Speaker 4: In chicken, there's a few different things that will influence the profitability in the year. 1, I think our plan, we have an aggressive operational improvement plan. And so. Our range reflects some different timing on how we achieve that. We also expect timing benefits from the closures last year to roll through as we get into the around the mid point of the year. And then, of course, there's just market.

And chicken Theres, a few different things that will influence the profitability in the year. One I think our plan, we have an aggressive operational improvement plan and so our range reflects a different timing on how we achieve that we also expect timing benefits from the closures last year to roll through as we get into the around the midpoint.

Of the year and then of course, there is just market movement that we can't necessarily predict although I think recent market data would show you there is more.

Speaker 4: movement that we can't necessarily predict although I think recent market data would show you there's more tailwinds and there are headwinds in our chicken segment on beef

Tailwind and there are headwinds in our chicken segment on beef.

Speaker 4: width of that range really just reflects the range of outcomes and the spread in that business.

<unk>.

<unk> of that range really just reflects the range of outcomes in the spread in that business naturally we would expect that range of tightened as we move through the year, but.

Speaker 4: Naturally, we would expect that range to tighten as we move through the year, but just to comment on some of the movements in those markets, even Q4 for us that we just finished was better than we anticipated a quarter ago, so just acknowledging that there's a lot of movement there.

Just to comment on some of the movements in those markets.

Even Q4 for US that we just finished was better than we anticipated a quarter ago. So just acknowledging that there is a lot of movement. There and I think then on prepared was the last one you asked about that'll be driven by execution consumer demand shrink how we invest in our brands and how they perform so I think that.

Speaker 4: Then on prepared was the last one you asked about, that'll be driven by execution, consumer demand strength, you know, how we invest our brands and how they perform. So, I think that this range is actually by going to the AOI dollars, we've hopefully for you and all of our investors kind of tightened up the band of outcomes here, but, you know, there are still some natural unpredictability and just how close we can nail the number.

This range is actually.

By going to the AOE dollars, we've hopefully for you and all of our investors kind of tightened up the band of outcomes here, but there is still some natural unpredictability and just how close we can nail the number.

Okay now they they are high dollar guidance ranges are definitely appreciated versus the percent and if I could can you give us ask a follow up just on cash flow. So you said free cash flow positive.

Speaker 5: Okay, now the AOI dollar guidance ranges are definitely appreciated versus the percent. And if I could ask a follow-up just on cash flow. So you said free cash flow positive, is that free cash flow positive after dividends or what's the, I guess the big plug in there would be how much working capital do you think you can release if given the sales and profit outlook?

Is that free cash flow positive after dividends.

Or what's the I guess, the big plug in there would be what how much working capital do you think you can release, if given the sales and profit outlook that you have.

Speaker 4: Yeah, I think on working capital, the drivers will be pulling down some of the finished goods inventory, but, you know, we might give some of that back on inventory just in terms of the cattle prices and kind of what we've got in the, you know, on the balance sheet.

I think on working capital the drivers will be pulling down some of the finished goods inventory but.

We might give some of that back on inventory just in terms of the.

Cattle prices and kind of what we got in on.

On the balance sheet.

Speaker 4: As it relates to, yeah, free cash deposit, we are committed to supporting a dividend for the year, and so we've given a, you know, a range of CapEx.

As it relates to your free cash flow positive we are.

Committed to supporting the dividend for the year and so we've given a <unk>.

A range of Capex numbers.

Speaker 4: numbers that we would expect to kind of reflect wherever the AOI and EBITDA is so that we can be recapitalized.

We would expect to kind of reflect wherever the NOI and EBITDA is so that we can be free cash flow positive for the year.

Speaker 5: I think to clarify one thing is, you know, that would be net of or that would not include any opportunistic M&A. I think we've always been pretty, you know, active in the market, evaluating opportunities. And so, you know, we don't have any, you know, predictions or news to share there. But just acknowledging that, you know, we'll consider things should they come to market during the year. Okay. I appreciate that, Collar.

Okay I appreciate it I think it would be I think to clarify one thing is that would be net of that would not include any opportunistic M&A I think we've always been pretty active in the market and evaluating opportunities and so we don't have any.

Predictions or news to share there, but just acknowledging that.

We'll consider things should they come to market during the year.

Okay I appreciate that color I'll pass it on thanks. Thanks.

Thanks, Ed.

Our next question comes from Andrew Charles <unk> from BMO. Please go ahead with your question.

Speaker 1: Our next question comes from Andrew Strelzick from BMO. Please go ahead with your.

Speaker 6: Hey, good morning. Thanks for taking the questions.

Hey, good morning, Thanks for taking the questions.

Sure.

Speaker 6: Morning, I'd like to actually start on the on the CapEx guidance. Please. I, you know, if you could maybe unpack.

Good morning, I'd like to actually start on the on the Capex guidance. Please.

If you could maybe unpack.

Speaker 6: Where, how you landed where you did what the buckets are, I think you previously had talked about 1.7Billion, maybe getting as low as 1.5 over time. Obviously, this is lower than that. So, you know, what types of things are removed from the plan? How does that shift? And where do we go?

How you landed where you did what's bucket. So I think you previously had talked about $1 7 billion, maybe getting as low as one five over time, obviously this is lower than that so.

You know what types of things that are removed from the plan, how does that shift and where do we go from here.

Speaker 4: Yeah, I guess I'll give you three or four data points on how to think about CapEx. Number one, we communicated throughout last year that we were trending toward a $1.5 billion number. Did not mean to make any commitments last year as to when we got there, although we feel as though that's the high watermark this year. And so, I think I mentioned in my preparation.

Yes, I guess I'll give you three or four data points on how to think about capex.

Number one we communicated throughout last year that we were trending toward a one $5 billion number did not mean to make any commitments last year as to when we got there although we.

We feel as though that's the high watermark this year and so I think I mentioned in my prepared remarks.

Speaker 4: Q4 was a $370 spin for us.

Q4 was a $370 spend for us.

Speaker 4: And so that would track out to being at the high end of our range for the year.

So that that would track out to being.

The high end of our range for the year I think that the other the other two things that are worth pointing out is number one we have a lot of capacity expansion projects that are rolling off and finishing up as we start 24, and then last but not least if you just think about a normalized investment level in our business. If I were to go back to before.

Speaker 4: I think that the other the other two things that are worth pointing out is number one, we have a lot of capacity expansion projects that are rolling off and finishing up as we start 24 and then last but not least, if you just think about a normalized investment level in our business.

Speaker 4: If I were to go back to before we embarked on this.

We embarked on this.

Speaker 4: period of significant capital investment.

Period of significant.

Capital investment.

Speaker 4: One and a quarter billion dollars was probably the was the average number between I think 17 and 21. so that's just some recent history that would support the range that we're sharing today is is in line with what we need to invest in.

In the quarter $1 billion was probably that was the average number.

I think 17% and 21. So that's just some recent history that would support the range that we're sharing today is is in line with what we need to invest in our business.

Speaker 3: And John , if I might, if I might add one thing to that, and you referenced some of the larger projects being behind us, I think it's important to remind everyone that in twenty two.

John if I might if I might add one thing to that and you referenced some of the larger projects.

Being behind US I think it's important to remind everyone that in 'twenty two we began to.

Speaker 3: We began to have an outsized capital expense. All of that was in service to making sure we had the capacity necessary to grow our branded portfolio, the value-added chicken and prepared foods as well. And we've got those. Danville, Virginia, we have.

Have an outsize capital expense.

All of that was in service to making sure we have the capacity necessary to grow our branded portfolio and the value added chicken and prepared foods as well.

We've got those Danville, Virginia, we have.

Speaker 3: Also, we have Bowling Green, Kentucky, and Kerryville coming online, plus a number of operations coming online outside the United States.

Also we have bowling Green, Kentucky and carry bill.

Coming online plus.

A number of operations coming online outside the United States.

Okay.

Okay, Great that's super helpful and then.

Speaker 6: The second question, you know, I guess is, is maybe if you think about your footprint today, your capacity utilization across your business, and then you've been very, very consistent in terms of saying that you're looking for all the opportunities that are out there and those types of things across the business. So, you found some more in chicken that you've talked about, but I guess I'm just curious if you could characterize.

A second question I guess is maybe if you think about your footprint today your capacity utilization across your business.

We have been very very consistent in terms of saying that you are looking for all the opportunities that are out there and those types of things across the business. So you've found some more in chicken that.

You've talked about but I guess I'm just curious if you could characterize how you're thinking about your footprint today and hydro evaluating those opportunities. If there's anything beyond chicken that you think might make sense at some point or or maybe not since we haven't seen that yet, but just curious as you continue to go down that path. Thank you.

Speaker 6: how you think about your footprint today, and how you're evaluating those opportunities, if there's anything beyond chicken that you think might make sense at some point, or maybe not, since we haven't seen that yet. But just curious as you continue to go down that path. Thank you.

Sure and as we saw.

Said, a number of times and we will continue to say this we are evaluating everything leaving no stone unturned.

If you were to if you <unk>.

Go back and look at what we've announced thus far the <unk> chicken.

And then the most recently the two value added.

Case ready.

The plants in our in our beef and pork business.

Those those are typical of what we're looking for but but these are typically older less efficient.

Speaker 3: certainly not modern, that require a lot of capital expenditure to try to either expand or make efficient, and so we're choosing.

Certainly not modern that require a lot of capital expenditure to try to either expand or or make efficient and <unk>.

So we're choosing.

Speaker 3: We're choosing to move that capacity to another plant. We're not wanting to give up any volume or share, and we're doing that very well. But the other thing that may not be as, you know, quite as apparent is because of the efficiency play in all of our core plants.

We're choosing to move that capacity to another plant, we're not wanting to give up any volume or share and we're doing that very well, but the other thing that may not be as.

Quite as apparent.

Is because of the efficiency play in all of our core plants.

Speaker 3: It has enabled us to run lines at rate. It's allowed us to get the labor and yield and throughput on those lines that we need. But that's also been an unlock in our ability to take away some redundant capacities.

It has enabled us to run lines. It right. It's allowed us to get the labor in yield and throughput on those lines that we need but that's also been an unlock.

And our ability to to take away some redundant capacity.

Great. Thanks, I'll pass it on.

Speaker 1: Our next question comes from Ken Goldman from J.P. Morgan. Please go ahead with your question.

Our next question comes from Ken Goldman from Jpmorgan. Please go ahead with your question.

Alright, thank you.

Speaker 7: Hi, thank you. I wanted to ask first, you know, Tyson in the past has.

I wanted to ask first.

In the past as well.

Speaker 7: going back and forth a little bit about providing longer-term margin ranges by segment, and now that you're providing EBIT dollars by segment, and I would mirror, I think, Adam's thoughts about appreciating that. Is it possible that

Going back and forth a little bit about providing longer term margin ranges by segment now that you are providing EBIT dollars by segment.

They were I think Adam's thoughts about appreciating that.

Is it possible that.

Speaker 7: at some point in the future, you might consider going back to giving us some kind of longer-term EBIT ranges instead of margin ranges? Or is the goal to kind of, you know, hey, let's see where the business goes, and then maybe that'll be considered? Or is that just kind of off the table at all? I know there's some people that just are always curious what your longer-term outlook is at this point, you know, even though visibility is not great right now.

At some point in the future you might consider going back to giving us some kind of longer term EBIT.

EBIT ranges instead of margin ranges or is the goal to kind of hey, let's see where the business goes and then maybe that'll be considered or was that just kind of off the table at all I know theres. Some people that just are always curious what your longer term outlook is at this point, even the visibility is not great right now.

Speaker 4: Hey, Ken, this is John and we appreciate the question. I think today we're not backing off of the long term.

Hey, Ken This is John and we appreciate the question I think today, we're not backing off of the long term.

Speaker 4: Uh guidance that we've got out there, but we're really focused on 24

Guidance that we've got out there, but we're really focused on 24.

Speaker 4: And so I think a time in the future when is appropriate and, you know, reflective of our kind of high confidence on where things are, we will give revisions if we deem that to be appropriate or reflective of our outlook. But today, we're really just talking about 24 and the Q4 transition.

And so I think.

<unk> in the future.

When as appropriate.

Reflective of our kind of high confidence on where things are we will we.

We will give revisions if we deem that to be.

Appropriate or reflective of our outlook, but today, we're really just talking about 'twenty four and then Q4 'twenty three.

And then just as a quick follow up and thank you for that it was mentioned that you're still if I can paraphrase, maybe kind of reviewing all of your options for your pork business. I was just curious if theres any further insights you might be able to provide about what those options are and kind of where you are in that in that progress. Thank you.

Speaker 7: And then just as a quick follow up, and thank you for that, it was mentioned that you're still, if I can paraphrase, maybe kind of reviewing all of your options for your pork business. I was just curious if there's any further insights you might be able to provide about what those options are and kind of where you are in that in that progress. Thank you.

Yes. Thanks.

Speaker 3: Yeah, thanks. You know, I'll throw out a couple things and then I'll let Brady step on top of that. You know, if you look back in 23, supply, demand, and balance, there's a little of that occurring in pork as we move into 24. You know, we talked a lot about controlling the controllables, but here's what I would tell you about that. The team that we've got in place today in our pork business is

Okay.

So were out a couple of things and then I'll, let Brady step on top of that.

If you look back in 'twenty, three supply demand imbalance theres, a little of that occurring in court as we.

As.

We move into 'twenty four.

We talked a lot about controlling the controllable, but here's what I would tell you about the team that we've got in place today and our core business.

<unk>.

Speaker 3: world-class team delivering best-in-class results. Couldn't be prouder of the work that they've done. But they're also working across the lines with as it relates to prepared foods and trying to unlock new opportunities. We obviously have more prepared foods capacity coming online. Some of the Tyson pork raw material will be in support of that. But, you know, we're looking at each footprint in terms of, you know,

A world class team delivering best in class results Couldnt be prouder of the work that they've done.

But theyre also working across the lines with as it relates to prepared foods and trying to unlock new opportunities. We obviously have more prepared foods capacity coming online some of the Tyson pork raw material.

We will be in support of that but.

We're looking at these footprint.

Terms of it.

Capital requirements, how efficient, but it would take to make it modern.

Speaker 3: Capital requirements, how efficient, what it would take to make it modern and and to upscale it up, but then we're looking at network and how to do that. But with that, Brady, anything you would add to that.

And to scale it.

But then we're looking at network and how to do that but would that Brady anything you'd add to that.

Speaker 2: Thanks, Donnie. As Donnie indicated, we've seen improvement and John certainly in his open remarks talked about the improvement sequentially quarter over quarter and year over year in our pork business.

Thanks, Tony.

As Tony indicated we've seen improvement and John certainly in his opening remarks talked about the improvement sequentially quarter over quarter and year over year in our port business again, Thats driven by two things. One is we did see some moderate improvements relative to the spread and we did see a significant improvement relative to us controlling our control.

Speaker 2: Again, that's driven by two things. One is we did see some moderate improvements relative to the spread, and we did see significant improvement relative to us controlling our controls. And again, that is a focus on making sure our assets operate as efficiently as possible, really focused on our mix.

And again that is a focus on making sure our assets operate as efficiently as possible.

We're really focused on our mix and ensuring that we have.

Speaker 8: and ensuring that we have world-class yields coming out of our assets as well. So, when we talk about 24, again, we're looking at better than $100 million of improvement year-over-year relative to 23. We're excited about the team that we have. They've continued to really use data and analytics.

World class yields coming out of our assets as well so when we talk about 24 again, we're looking at better than $100 million of improvement year over year relative to 'twenty three.

We're excited about the team that we have they have continued to really use data and analytics.

Speaker 8: and ID all of the opportunities in the business. They've developed the right strategies for the future. And most importantly, they've executed on continuous improvement in mixed efficiency.

All of the opportunities in the business. They have developed the right strategies for the future and most importantly, they've executed on continuous improvement in mix efficiency and yields.

Our next question comes from Peter Galbo from Bank of America. Please go ahead with your question.

Speaker 1: Our next question comes from Peter Galbo from Bank of America. Please go ahead with your question. Hey, guys. Good morning.

Guys. Good morning, Thanks for taking the question Peter.

Speaker 4: I wanted to unpack a little bit on prepared foods in the guidance for the year. You know, Donny, just given your commentary, it's...

I wanted to to unpack a little bit on on prepared foods and the guidance for the year.

Dani just given your commentary it.

Speaker 4: competitors, it seems like there is a step up in the map spending and some of the promotion and maybe the category, some of the retail categories are getting more competitive. I was hoping maybe you could unpack that in the current environment and then kind of reconcile again, the guidance for the year, typically, you would see a stronger profit contribution for prepared in the first half versus the second half of the year. And maybe this year, it seems like it might be a bit different. So anything you could do more to.

And some of your competitors it seems like.

There is a step up in the map spending and some of the promotion and maybe the category.

You know some of the retail categories are getting more competitive.

I was hoping maybe you could unpack that in the current environment and then and then kind of reconcile all of that in the guidance for the year typically you would see.

<unk> profit contribution for prepared in the first half versus the second half of the year and maybe this year. It seems like it might be a bit different so any anything you can do more to get more detail there. Thanks.

Speaker 3: Thank you. Let me, let me say, make a couple of comments and I'll turn it over to Melanie. Let me start off by welcoming Melanie Bolden, who is our Chief Growth Officer. And she has taken over responsibility for our prepared foods. And she's on our first call today, representing prepared foods. And Melanie, welcome.

Let me, let me say it would make a couple of comments and I'll turn it over to Melanie Let me start off by welcoming mentally boldon, who is our chief growth officer and she has taken over responsibility for our prepared foods and she's on our first call today, representing prepared foods and mentally welcome.

Speaker 3: And, you know, let me just lay a little foundation and I'll let Melanie close the deal. You know, prepared foods is a key growth pillar for our future. Our brands continue to perform well, even last year, even in fiscal 23 when we were challenged. You know, we have advantaged brands and advantaged categories, so we like that.

And let me just let me just lay a little foundation and I'll, let Melanie close the deal.

Prepared foods as a key growth pillar for our future our brands continued to perform well even last year, even in fiscal 'twenty three when.

When we were challenged.

We have advantaged brands in advantaged categories. So we like that.

Speaker 3: But I'll let Melanie talk to you about some of the upside to even prepare foods today.

I'll, let <unk> talk to you about some of the upside to even prepared foods today.

Speaker 9: Hi, Peter. So let's first, you asked about performance and wanting to kind of unpack that, if you will, let's start with our performance in Q4. It's important to remember that the prepared foods business, it has some seasonality aspects.

Hi, Peter So, let's first you asked about performance and wanting to kind of unpack back if you will let's start with our performance and <unk>.

Q4.

It's important to remember that our prepared foods business. It has some seasonality aspects.

Speaker 9: that typically result in softer margins in Q4 compared with our full year expectations. But despite the seasonality and impacts from our startup costs this past quarter, our margins still remain, you know, our margins still increased year over year in line with our full year expectations. And as John pointed out, you know, this past quarter, you know, we generated, it's been our second highest Q4 result in the past five years.

Typically result in softer margins in Q4, compared with our full year expectation, but despite the seasonality and impact from our startup costs. This past quarter, our margins still remain.

Our margins still increased year over year in line with up both your expectations and as John pointed out.

This past quarter, we generated our second highest Q4 resulted in the past five years and so then as I think about the full year.

Speaker 9: And so then as I think about the full year and our outlook for 2024, I have full confidence in the growth proposition of our prepared foods business. You know, as we think about fiscal year 2024, we're driving profits behind disciplined revenue growth management and price pack architecture capabilities, as well as we have strong operational improvement initiatives. Thank you. Thank you.

Our outlook for 2024, I have full confidence in the growth proposition.

It's business.

As we think about fiscal year 2024, we're driving profits behind disciplined revenue growth management and price pack architecture capabilities as well as we have strong operational.

Our operational improvement initiatives plan and yes to your point about that we are investing for the future.

Speaker 9: And yes, to your point about map, we are investing for the future behind our business with increased maps, but we're also investing, you know, behind new, highly automated industry leading production facilities to increase our.

Behind our business split increase map.

But we're also investing behind new highly automated industry, leading production facilities.

<unk> increased our cost.

Speaker 9: increase our capabilities in service to meet our growing demand. But I do want to say, though, as I think about 2024, you know, it's also important to note just like we had in Q4, we still have some startup costs in Q1 for our new facilities, and that's probably going to impact.

Increased our capabilities and serve.

To meet our growing demand, but I do want to say, though I think about 2024.

It's also important to know just like we had in Q4, we still have some startup costs.

Q1 <unk>.

Facilities, and that's probably going to impact on profit.

Speaker 4: And Peter, if I can have one thing just to answer your question, we did not mean to indicate that the seasonality and prepare would be meaningfully different than from from prior year.

And Peter if I can add one thing just to answer your question, we did not mean to indicate.

With the seasonality and prepare would be meaningfully different than from.

From prior years.

Speaker 2: got it uh... okay now that that's helpful bank bank melanie and and and John and and and dot even if it is there and i know we're pretty on the call well with uh... two-parter on beef uh... and it seems like

Got it okay. That's helpful. Thanks, Thanks, Melanie and and John.

And then Johnny maybe just I.

Brady on the call as well.

A two parter on beef.

I mean, it seems like you missed the window or the industry missed the window on kind of heifer retention for last year.

Speaker 2: You know, you missed the window or the industry missed the window on kind of effort retention for last year.

Speaker 4: you know is that pushing out now another six to twelve months prior and on beef cycle recovery versus kind of what you thought previously and then the second p to b uh... you know obviously you're you're consolidating uh... to the case ready you know operations the you know last week you know historically that was supposed to be a pretty value driver in in in marketing up the beef business over time and just i wanna make sure that that still kind of courted to the strategy and and again removing those plants or shuttering those plants but then not that

Is that pushing out now another six to 12 months prior on beef cycle recovery versus kind of what you thought previously and then the second piece would be obviously youre consolidating.

Some of the case ready operations that you announced last week.

Historically that was supposed to be a pretty big value driver and margining up the beef business over time, and just I want to make sure that that's still kind of core to the strategy and again.

Moving those plants are shuttering those plants doesn't it doesn't kind of knock that off thanks guys.

Well thanks for thanks for the follow up there for a few this brady and first touching on a question relative to heifer retention and.

Speaker 8: Well, thanks for the follow-up there, Peter. This is Brady. And first, touching on the question relative to heifer retention. And I think a lot of industry analysts have continued to go back to where we saw diminished supplies almost a decade ago relative to the beef cycle. And certainly, the cattle on feed number relative to heifers is a percentage.

A lot of industry analysts have continued to go back to where we saw that many supplies almost a decade ago relative to the beef cycle and certainly the.

Cattle on feed number relative to <unk> as a percentage.

Speaker 8: is extremely high and we'll continue to monitor that. At least USDA indicated it was the largest on record for October .

Is extremely high.

And we'll continue to monitor that latest USDA indicated was the largest on record for October and so I think what we are looking at relative to the shape of the future certainly is.

Speaker 8: And so I think what we are looking at relative to the shape of the future certainly is maybe more of a U-shaped curve on the bottom end relative to supply as opposed to the V-shape we saw back almost a decade ago as well. So we will continue to monitor heifer retention and cows relative to production capabilities and supply.

Maybe more of a U shaped curve on the bottom end relative to supply as opposed to the V shape, we saw back almost a decade ago as well. So we will continue to monitor heifer retention and Calvin relative to production capabilities and supply.

Speaker 8: and really prepare for the variety of outcomes to go. We've got a solution for, really, those variety of potential outcomes.

And.

Really prepare for the variety of outcomes to go we've got a solution for <unk>.

Really those variety of potential outcomes relative to our case ready assets I think there's a few key focus areas here number one is we did not lose.

Speaker 8: Relative to our case-ready assets, I think there's a few key focus areas here. Number one is we did not lose any true capacity relative to our customers.

Any true capacity relative to our customers.

Speaker 8: All of our customers that we currently service today will be serviced in the future. We had redundant capacity, and so this just really allows us to continue to service our current customers, and we still have opportunity to grow into the future, but we're able to do that in a much more effective cost structure as well. So still a focus for Tyson is to get as close to our customers as we can relative to our value-added properties.

All of our customers that we currently service today will be serviced in the future we had redundant capacity and so this just really allows us to continue to service our current customers and we still have opportunity to grow into the future, but we're able to do that in a much more effective cost structure as well so still a focus for Tyson.

It is close to our customers as we can relative to our value added proposition.

Speaker 3: So if I could add a couple things to that as well, I think it's important that when you're evaluating bees, that you evaluate it across the entire cycle, which is approximately 10 years.

If I could add a couple of things to that.

As well I think it's important that.

When you are evaluating b that you evaluated across the entire Sac cycle, which is approximately 10 years.

Speaker 3: And, you know, I will tell you and, you know, it's this thing moves kind of quickly. But a year ago, I was testifying before Congress with some of my peers because Beef was making so much money.

I will tell you in.

At.

This thing moves kind of quickly.

But a year ago I was testified before Congress with some of my peers, because beef was making so much money.

Speaker 3: And today, we're talking about, you know, what it looks like on the downside. So my message there, and I have to tell myself this as well, is that you have to look at it across the cycle. And we do that. But a couple of other things that, again, I would just reiterate, don't miss the fact that we have redundant capacity and are able to.

And today, we are talking about what it looks like on the downside. So my message there and I have to I have to tell myself. This as well is that you have to look at it across the cycle and we do that with a couple of other things.

Again, I would just reiterate.

Don't Miss this.

Fact that we have redundant capacity and are able to to to shutter that debt.

Speaker 3: to shutter that, that, that.

Yeah.

Speaker 3: Don't miss the fact that we got better at what we do and every aspect of the operational component.

Don't Miss the fact that we got better at what we do.

Every aspect of the operational component.

Speaker 3: And so we did, but we continue to evaluate all options, but, but something that Brady would never say, but I'll say, because he won't, but we have best in class assets. We have best.

And so we did but we continue to evaluate all options, but but something that Brady would never say that.

I'll say because he won't.

But we have best in class assets.

We have best in class team members.

Speaker 3: We are aligned with the right suppliers and we have all the great customers that you would want to service. So we have a number of things that are lined up against or lined up the right way for us.

We have we are aligned with the right suppliers and we have the great. We have all the great customers that you would want to service. So we have a number of things that are lined up against are lined up the right way for us.

Speaker 1: Our next question comes from Ben Bienvenu from Stevens Incorporated. Please go ahead with your question.

Our next question comes from Ben <unk> from Stephens incorporated. Please go ahead with your question.

Yes. Thank you good morning.

Speaker 10: Yeah, thank you. Good morning. John , I'm going to follow up on a comment that you made around the chicken guidance for next year. You noted the operational improvements you expect to make. And I think the variability from the bottom end of the range for next year to the top end is subject to the pace.

John as a follow up on a comment that you made.

The chicken guidance for next year, you noted that the operational improvements do you expect to make and I think the variability from the bottom end of the range for next year at the top end is subject to the pace of that progress, but you also made a comment about the market conditions that we can all see it improving.

Speaker 10: of that progress. But you also made a comment about the market conditions that we can all see improving.

Speaker 10: Is improved market conditions a variable that you're considering in guidance for next year for FY24 and chicken?

Is improved market conditions, a variable that you are considering in guidance for next year for FY 'twenty for chicken.

Speaker 4: Yes, Ben, the answer to that question is we do factor in some range of market conditions, although I would say in the band of our year-over-year improvement it's probably about two-thirds of that is what we're seeing from operations and one-third of that year-over-year improvement has to do with some some, you know favorable grain prices and chicken market prices is how we think about that. And then I described earlier obviously

Yes, Ben the answer to that question is we do factor in some.

A range of market conditions, although I would say in the band of our year over year improvement.

It's probably about two thirds of that is what we're seeing from operations and one third of that year over year improvement.

Has to do with some some favorable.

Grain prices and chicken market prices is how we think about that.

And then I described earlier obviously.

Speaker 4: how we get to the different outcome within the race.

How we get to the different outcome within the range.

Speaker 3: Wes is here with me, and maybe I can invite you to just color a little bit more on the year, Wes. Yeah, thanks. Thanks for the question, Ben. As John said, you know, I'd classify it one-third.

Wes is here with me and maybe I can invite.

You just cut color a little bit more on the year was yes. Thanks. Thanks for the question Ben as John said I'd.

Classify that one third.

Speaker 3: of our improvements will be baked around markets, so grains, net of meat values. Two-thirds driven by our fundamental improvements, and I can give you some examples.

Of our improvements will be baked around markets. So grange net of net of meat values, two thirds driven by our fundamental improvements and I can give you some examples.

Speaker 3: Nice improvement in Q4 in our live production, led by livability, feed conversion, and hatch.

Nice improvement in Q4, and our live production led by live ability feed conversion and hedge.

Speaker 3: Our capacity and our yields were both up by turnover and absenteeism were down.

Our capacity and our yields were both up while turnover and absenteeism or down.

Speaker 3: Our service was up materially year over year, and we did it with 84 million less finished inventory pounds. And so.

Our service was up.

Materially year over year, and we did it with $84 million less finished inventory pounds and so.

Trending in the right direction. We also have a very disciplined supply demand balance process in place and so balancing supply demand and capacity to maximize profits while servicing customers.

Speaker 3: trending in the right direction. And we also have a very disciplined supply demand balance process in place. And so balancing supply, demand and capacity to maximize profits while servicing customers. And so we're on track improving our fundamentals, servicing customers and shifting our mix to drive profitability. But I agree with with John , one third markets, two thirds performance.

And so we're on track improvement, our fundamentals servicing customers and shifting our mix to drive profitability, but I agree with John one third markets two thirds performance.

Speaker 10: Very, very helpful. Thank you. My 2nd question is a follow up question on the balance sheet for next year as it relates to the 400Million dollars of net interest expense in 2024.

Very very helpful. Thank you. My second question is a follow up question on the balance sheet for next year as it relates to the $400 million of debt interest expense in 2024.

Speaker 10: John , does that include the refinancing of the $1.25 billion of debt you have maturing in August and or is there something else that you guys might consider either downsizing that debt or something else to manage the balance sheet as you think about maturities in 2024?

John does that include the refinancing of the $1 billion to $5 billion of debt you have maturing in August and <unk> or is there something else that you guys might consider either downsizing that debt or something else to manage the balance sheet as you think about maturities in 2020 quarter.

Speaker 8: Yeah so we'd be projecting to refinance any upcoming maturities. I think we also have a term loan that we executed earlier this year to draw in November and so just the rebalancing of the portfolio and the combination of the fixed and floating is where you see the rate or the total total interest expense tick up year over year.

Yes, so we would be projecting to refinance.

Any upcoming maturities I think we also have a.

Turbo that we executed earlier this year.

Uh huh.

To draw in November.

So just the rebalancing of the portfolio and the combination of the fixed and floating is where you see the rate or the total total interest expense tick up.

Year over year.

Okay, great. Thanks, so much best thought.

Spencer.

Speaker 1: Our next question comes from Ben Toyer from Barclays, please go ahead with your question.

Our next question comes from Ben Tawyer from Barclays. Please go ahead with your question.

Speaker 11: For sure. Thanks so much. This is Rahi on for Ben. Just a question for Chicken. In terms of your factory closures, I know there's two already closed for in process. You can confirm that. And also, what would you say is your current capacity utilization as of now, and maybe any stats on reduced costs? Also, just wanted to confirm for the $333 million write-down in fees, this relates to the two fresh meats case-ready value-added facilities you said you took offline? Thank you.

I appreciate it. Thanks, so much this is ross on for <unk>.

Dan.

A question for chicken in terms of your factory closures I know, there's two already closed one.

Okay from that and also what would you say the current capacity utilization as of now and then maybe any stats on reduced cost.

Also just wanted to confirm.

$330 million right Steve.

Two the toothbrush needs Keith ready.

<unk> you said you took offline thank you.

So let me, let me start off and I'll answer the <unk> question first.

Speaker 3: So let me start off and I'll answer the beef question first. You know, the right down in beef.

The write down of beef.

Speaker 3: doesn't have anything to do with that. That was a discount rate, which drove the goodwill impairment. But in terms of checking, let me just state this.

It doesn't have anything to do with that that was the discount rate.

Which drove.

The goodwill impairment.

But in terms of chicken, let me just state this.

Speaker 3: because we've not said this in some time. You know, our goal in chicken is to simply be the very best in.

Because we've not said this in some time our goal in chicken is to simply be the very best in this space that hasnt changed.

Speaker 3: I can tell you that over the last three, four, five years, maybe we haven't done that to the best of our ability. We haven't competed very well.

I can tell you that over the last.

The last three or four or five years, maybe we haven't done that to the best of our ability. We haven't competed very well, but we're getting more competitive and we are still unlocking opportunities and I'll, let wes share some of the some of the things that he's doing in addition to what is already set yeah. Let me see if I can answer you.

Speaker 3: But we're getting more competitive, and we're still unlocking opportunities. And I'll let Wes share some of the things that he's doing, in addition to what he's already said. Yeah, let me see if I can answer your question. And so at this point, five of the six that we announced are, in fact, are done producing, with the last one coming offline at the 1st of March.

Question then so at this 0.5 of the six that we announced are in fact.

Done producing with the last one coming offline that first March.

Speaker 3: In our Q4 financials, only two of those would have been driving those numbers with the remaining ones coming in Q1 and early Q2.

And our Q4 financials only two of those would have been.

Driving.

Those numbers with the remaining ones come in in Q1 and early Q2.

Okay.

As far as capacity, Yes, let me go ahead and I'll touch on the capacity. Our goal is to always have room to grow with our important customers, but we have moved.

Speaker 3: As for the capacity, yeah, let me go ahead and I'll touch on the capacity. You know, our goal is to always have room to grow with our important customers. But we have moved up materially year over year with both.

Materially year over a year.

Both.

Speaker 3: the closures and other activities. But I would remind you that mix is as important as volume.

The closures and other activities.

I would remind you that mix is as important as volume.

Speaker 12: and driving our profitability across our total portfolio.

And driving our profitability across our total portfolio.

Yes.

Great. Thank you so much.

Thank you.

And our next question comes from Michael elaborate from Piper Sandler. Please go ahead with your question.

Speaker 1: And our next question comes from Michael Lavery from Piper Sandler. Please go ahead with your question.

Yes.

Speaker 1: Thank you. Good morning. I just want to come back to you said your first priority was being disciplined with cash, but you also pointed out that you've raised the dividend. It's a modest increase. I realize that. But.

Thank you good morning.

I just wanted to come back to you said your first priority was being discipline with cash, but you also pointed out that you've raised the dividend.

Modest increase I realize that but.

Speaker 1: I guess why the rush to take it up at all? Is it just that time of year? Is there a reason, you know, with especially an outlook with a bit of uncertainty that you couldn't just put that on hold? Just help me understand that thinking. And am I hearing correctly that it sounds like the flex comes from adjusting CapEx down, you know, is that the right tradeoff? How should we think about that?

I guess why the rush to take it up at all is it just that time of year is there a reason.

With especially an outlook with a bit of uncertainty.

That.

You Couldnt just put that on hold just help me understand that thinking.

My hearing correctly that it sounds like the flex comes from from adjusting the Capex down.

Is that the right tradeoffs, how should we think about that.

Hey, this is John I'll take that question.

Speaker 4: Hey, this is John . I'll take that question. So, yeah, as I mentioned earlier, we remain committed to growing a dividend preserving a dividend this year and growing it over time. I understand the question. I think, you know, our, our judgment was that a on an absolute basis about a 2% increase.

So.

Yeah as I mentioned earlier, we remain committed to.

Growing the dividend preserving the dividend this year and growing it over time.

I understand the question I think.

Our judgment was that a on an absolute basis about a 2% increase.

Speaker 3: in terms of cents per share was was modest and, you know, fit well within the range of outcomes for our capital allocation in in 2040. So I think that's that's how we answer that question. If I could add something to that in terms of cap rent.

In terms of.

<unk> per share was was modest.

And.

Fit well within the range of outcomes for our capital allocation and in 'twenty.

I think that's that's how we answer that question.

I could add something to that in terms of capex.

Speaker 3: As a reminder, over the last couple of years, we've made major investment in capacity.

As a reminder, over the last couple of years, we've made a major investment in capacity.

Speaker 3: And we're pulling that back down to normal levels. We are in a good spot today in terms.

And we're pulling that back down to normal levels. We are in a good spot today in terms of.

The capacity to produce and to be able to produce and grow in the near term here, we will certainly keep our eye on that but but I think another way to think about that as units returning to more of a historical level of capital spend.

Speaker 3: capacity to produce and to be able to produce and grow in the near term here will certainly keep our eye on

Speaker 3: But I think another way to think about that is you're just returning to more of a historical level of capitalism.

Speaker 1: Okay, that's helpful. And I just want to follow up on the prepared foods commentary that's been touched on a little bit, but you call out that the difficult consumer environment and how you're trying to meet those consumers where they are, I guess, just.

Okay. That's helpful.

I just wanted to follow up on the prepared foods commentary. This has been touched on a little bit but.

Callout, the difficult consumer environment, and how you are trying to meet those consumers where they are I guess just.

Speaker 8: At a higher level, can you give a sense of how you prioritize sort of volume over price? What's the key driver in terms of how you think about approaching what could be a further step up in promotions or just how you manage that going forward?

At a higher level can you give a sense of how you prioritize sort of volume over price.

What's the key driver in terms of how you think about approaching what could be a further step up in promotions or just.

How do you manage that going forward.

Yes, So Michael let me first talk about our pricing strategy in totality, we have a strong revenue management capabilities.

Speaker 9: Yeah, so, Michael, let me first talk about, you know, our pricing strategy in totality. So we have a strong revenue management capabilities as well as, you know, our leading brands, which is the foundation of our pricing strategy.

As well as you know our leading brands, which is the foundation of our pricing strategy and when we do implement price increases we're focused on our profitability and the health of our brands while at the same time simultaneously being cognizant category, our competition and our consumer.

Speaker 9: And when we do implement price increases, we're focused on our profitability and the health of our brands while at the same time simultaneously being cognizant of the category, our competition, and our consumer demand dynamics.

Demand dynamics and through these capabilities as well as our analytics, we can see that our elasticity.

Speaker 9: And through these capabilities, as well as our analytics, we can see that our elasticities are moving back to pre-COVID ranges and level. And at the end of the day, as you know, our goal is just to balance pricing and volume in a volatile commodity market.

Moving back to pre Covid ranges and level and at the end of the day as you know our goal is just to balance pricing and volume in a volatile commodity market.

Okay. Thanks, so much.

Speaker 1: And ladies and gentlemen, once again, if you would like to ask a question, please press star and one.

And ladies and gentlemen, once again, if you would like to ask a question. Please press star and one.

Speaker 1: Our next question comes from Alexia Howard from Bernstein. Please go ahead with your question. Good morning, everyone.

Our next question comes from Alexia Howard from Bernstein. Please go ahead with your question.

Good morning, everyone.

Good morning Alexia.

Speaker 13: Okay, so can I just start with beef? I think you mentioned in the prepared remarks that it was going to be a year of two halves with more pressure on profitability in the first half.

Okay. So can I just start with beef I think you mentioned in the prepared remarks that it was going to be a year of two halves split more pressure on profitability in the top obviously this latest quarter came through a bit faster than expected, but and I know you don't give quarterly guidance, but are we trending at the moment towards the debt.

Speaker 13: Obviously, this latest quarter came through a bit better than expected, and I know you don't give quarterly guidance, but are we trending at the moment towards the lower end of the range and the expectation is that things will pull around? And why would they pull around in the second half? Just curious about the magnitude of how it skews first half and second half.

Lower ended the range and the expectation is that things will turn around and why would they pull out in the second half just curious about the magnitude of how excuse that conference.

Sure Alexia Thanks for the question.

Speaker 8: Thanks for the question, and as we indicated, there is certainly a large range of outcomes and there's a number of different supply and demand dynamics that will come into play as we move throughout the year. When we lay out our forecast and our approach, we certainly look at a variety of different

And as we indicated there is certainly a large range of outcomes and there is a number of different supply and demand.

Dynamics that will come into play as we move throughout the year.

We lay out our forecast in our approach, we certainly look at a variety of different.

Speaker 8: inputs including seasonality where we see different demand behaviors from the consumer along with what we see from a supply perspective and have balanced what we believe to be temporary tension given the environment into those forecasts.

Inputs.

Including seasonality, where we see different demand behaviors from the consumer along with what we see from a supply perspective and have balanced.

What we believe to be appropriate muscle after retention given the environment into those forecasts.

And.

Speaker 8: So really that provides us that range of outcome that we look at for 24.

So really that provides us that range of outcome that we look at $4 24.

Speaker 8: We've done a really good job from a business perspective of continually improvement, which we believe relative to the industry available spreads that we see, it lent itself to the performance in Q4, and we expect to see those trends relative to our true controllables move into 24.

We've done a really good job from a business perspective continually improvement, which we believe relative to the industry available spreads that we see lint.

Lent itself to the performance in Q4, and we expect to see those trends relative to our true controllable.

Move into 'twenty, four and that has provided us with the range of guidance that we provided.

Speaker 8: And that has provided us with the range of guidance that we.

Speaker 13: Okay, thank you. And then on leverage, it's kind of linked to the beef question. I mean, if there is going to be this sort of cadence through the year, do you anticipate that leverage is going to increase? And if so, by how much? Or how do you expect that to trend from here?

Okay. Thank you.

And then on leverage is kind of linked to the beef question. I mean, if there is going to be the sort of cadence through the year do you anticipate thats a.

Leverage is going to increase and if so by how much or.

How do you expect that to trend from here.

Hey, Alex this is John.

Speaker 4: Hey Alexi, this is John . So, you know, we do, would project for leverage to tick up a little bit as we move through the first part of the year. And really what's driving that is just lapping the quarters that we'll see from the first half of last year. So that once we move past and through that, we would begin to expect our leverage numbers to start to move back down.

We do.

Would project for leverage to tick up a little bit as we move through the first part of the year and really what's driving that is just lapping.

The quarters that we'll see from.

From the first half of last year, and so once we move past and through that we would begin to expect our leverage.

Numbers to start to move back down.

Okay. Thank you very much I'll pass it on.

Speaker 1: And, ladies and gentlemen, at this time, in showing no additional questions, we'll end today's question and answer session. And I'd like to turn the floor back over to Donny King for any closing remarks.

And ladies and gentlemen at this time in showing no additional questions. We will end today's question and answer session and I'd like to turn the floor back over to Donnie King for any closing remarks.

Thank you while fiscal 2023 was a difficult year for our business. We finished strong and are more focused collaborative and efficient than we were 12 months ago.

Speaker 3: Thank you. While fiscal 2023 was a difficult year for our business, we finished strong and are more focused, collaborative, and efficient than we were 12 months

Speaker 3: For not yet where we want to be our plan and the decisions we have made are moving us in the right direction. A demonstrated by the second quarter in a row when she'll improve.

While we're not yet where we want to be our plan and the decisions. We have made are moving us in the right direction.

As demonstrated by our second quarter in a row of sequential improvements.

Speaker 3: In an uncertain macro environment, our priority continues to be controlling the controllables with discipline and agility.

In an uncertain macro environment, our priority continues to be controlling the controllable with discipline and agility.

Speaker 3: Our strategy is working. We have the right leadership team in place to deliver. And the bold actions we've taken are poised to drive long-term opportunity and shareholder value. Thank you, and have a good day.

Our strategy is working we have the right leadership team in place to deliver at the bold actions. We've taken are poised to drive long term opportunity and shareholder value. Thank you and have a good day.

Speaker 1: Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your line.

Ladies and gentlemen, with that we'll conclude today's conference call and presentation. We thank you for joining you may now disconnect your lines.