Tyson Foods Inc is replacing its top boss just as the pandemic boosts costs and clouds the outlook for America’s top meat producer.
Noel White, 62, will step down as chief executive officer after just two years on the job, but will remain at the company as executive vice chairman, Tyson said in a statement. He will be replaced by 46-year-old Dean Banks, currently Tyson’s president, effective from October 3.
Tyson’s costs soared as it tried to contain outbreaks of coronavirus that infected thousands of meat-plant employees across America. The company spent an additional $340 million in the third quarter due to the virus and said costs are expected to increase for the remainder of 2020 and into the 2021 fiscal year.
“We have faced and expect to continue to face capacity utilisation slowdowns in production facilities from team member absenteeism and choices we make to ensure team member health and safety,” the company said. “The lower levels of productivity and higher costs of production we have experienced will likely continue until Covid-19 is better understood and its impacts diminish.”
Tyson posted third quarter earnings of $1.40 a share, beating the average analyst estimate of 93 cents.
Still, revenue of $10 billion missed the average forecast of $10.5 billion, and the company also said the increase in retail volumes couldn’t compensate for the losses from the food services sector as restaurants shut down.
The company’s chicken segment was hit particularly hard by the pandemic, with sales down due to lower volume
and price, and Tyson took a $110 million hit from negative mark-to-market adjustments in derivatives for animal-feed ingredients corn and soybean meal.