Tyson Foods, Inc.

Good morning, and welcome to the Tyson Foods fourth quarter 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Brandon Tucker, Senior Manager, Investor Relations. Please go ahead.

Hello, and welcome to the fourth quarter fiscal 2022 earnings conference call for Tyson Foods. Prepared remarks today will be provided by Donnie King, President and Chief Executive Officer, and John R. Tyson, EVP and Chief Financial Officer. Additionally, Shane Miller, Group President Fresh Meats, Stuart Glendening, Group President, Prepared Foods, David Bray, Group President, Poultry, and Amy Tu, Group President, International and CAO, will join the live Q&A session. We have prepared presentation slides to supplement our comments, which are available on the investor relations section of the Tyson website and through the link to our webcast. During this call, we will make forward-looking statements regarding our expectations for the future. These statements are subject to risk, uncertainties, and assumptions which may cause our actual results to differ materially from our current projections. Please refer to our forward-looking statement 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. Please note the references to earnings per share, operating income, and operating margin in our remarks are on an adjusted basis unless otherwise noted. For reconciliations of these non-GAAP measures to their corresponding GAAP measures, please refer to our earnings press release. I will now turn the call over to Donnie.

Thank you, Brandon, and thank you to everyone for joining us for the call. Earlier today, we announced our fourth quarter and total fiscal year 2022 results, which showed record annual financial performance, including revenue, adjusted operating income, and earnings per share. I'm grateful for the hard work and dedication of our team members. Our results would not have been possible without them. In this challenging macroeconomic environment with historically high inflation, consumer demand for protein remains relatively steady. We remain well positioned to serve this demand. We leveraged our diverse protein portfolio across multiple channels and brands to meet customer and consumer needs across a broad range of products and price points, serving an estimated one fifth of U.S. protein consumption. And as proven by our double digit sales growth, our portfolio of value added and branded products positions us uniquely to win. In addition to growing sales, we're also aggressively mitigating inflationary costs and SG&A expenses through disciplined revenue management and enterprise-wide productivity actions, including investments in automation to improve operational excellence and efficiency. As we progress our efforts to be the most sought-after place to work, we continue to listen to our team members' needs and invest in areas like childcare to provide a better quality of life for our team members. We're beginning to see results from these investments through improved staffing levels and reduced turnover. Before I discuss our financial performance, let me provide a bit of strategic context. As you are well aware, we have a strong and disciplined strategic growth plan. And this past year, we continued to methodically execute against this plan as we strengthened our position as a global protein leader. Our growth strategy is built on five key pillars. transforming our team member experience, growing with our customers to service demand, investing in digital and automation to drive operational excellence, restoring competitiveness in our chicken segment, and leveraging our financial strength to invest in the business and return cash to shareholders. I'm pleased to report that we have executed on each of these imperatives and delivered what we said we would entering the fiscal year. Our commitment to strengthening our position as a global protein leader and driving value creation for our shareholders is the most important goal for our team. Having the right leadership team in place is also imperative as a global protein leader. To accomplish this, we recently announced changes in our executive leadership team, which we believe will drive improved results across our organization. Overall, we feel good about our performance. We saw a lot of really good things. We delivered record sales, revenue, and earnings. The chicken turnaround progressed as promised. beef performed better than expected, and prepared foods is seeing positive volume momentum exiting the year. With that strategic context, let's turn to our financial performance. Compared to our initial fiscal year guidance, we exceeded our total company sales and beef margin guidance, and we met guidance on chicken and prepared foods margins. We managed our balance sheet and sit today at a leverage ratio comfortably below our guidance. Sales improved 7% for the fourth quarter and 13% year over year. We delivered record sales revenue as a company and across each of our four largest operating segments. We delivered record annual adjusted operating income of $4.4 billion, up 3% over the prior year. As expected, our fourth quarter earnings were lower compared to the prior year, but this was almost entirely due to record strength in beef a year ago. Our operating income performance translated to adjusted earnings per share of $1.63 for the fourth quarter and a record $8.73 for the full year, up 5% from last year. Turning to our results on volume, we're continuing to optimize our existing footprint, add new capacity, adjust our product mix by plant, and match our portfolio more closely with customer and consumer needs. We saw benefits of our efforts in the fourth quarter as total company volume increased 2.1%. We are building positive momentum and remain confident that our strategy will enable us to grow volumes across all segments long term. Chicken volumes increased 1.1% in the quarter compared to the prior year, driven by increased domestic production. In prepared foods, volumes were relatively flat in the quarter compared to the prior year. We are gaining momentum delivering sequential quarterly improvement driven primarily by the strength of our retail brands. The categories in which we play continue to be highly consumer relevant, with the vast majority remaining elevated relative to pre-pandemic. In a few slides, we'll discuss our strong share performance. Compared to prior year, beef volumes were up 5.1% for the quarter, driven by higher head throughput and carcass weights. improving from a full year volume deficit of 1.5% in the third quarter. We finished the year relatively flat. Pork volumes were down 1.1% for the quarter compared to prior year due to limited hog supply and reduced export demand. In international, volumes continue to grow, up 7.3% compared to the prior year quarter driven by our investments in capacity, innovations, and brands that support market share growth. As we look ahead, one thing that excites me is the momentum I see in our branded retail business. It is evident that we're delivering the brands and the products that consumers want. With our iconic retail brands, Tyson, Jimmy Dean, Hillshire Farm, and Ballpark, Tyson Core Business Lines outpaced Total Food and Beverage and our peers in growth, up 18% in volume sales in the last 13 weeks compared to pre-pandemic levels per Nielsen data. According to Nielsen data, Tyson Core business lines grew volume share by 2.6 points this quarter compared to pre-pandemic levels, while also growing share relative to a year ago. We continue to be the market share leader in the majority of the retail core categories in which we compete, while also gaining share in seven of these nine core categories. We experienced the greatest share gains in frozen protein breakfast, smoked sausage, and corn dog category. Our brand strength relative to our peers is undeniable, as Tyson, Jimmy Dean, Hillshire Farm, and Ballpark all hold favorite brand status with consumers in the categories in which we compete. Many of our retail businesses continue to outperform Total Foods and Beverage and remain highly relevant to consumers and therefore elevated in consumption. Consumers will continue to spend on relevant categories and brands they know and trust. This data shows the recovery we're seeing versus a year ago and the momentum we're gaining as we move into fiscal 2023. We have made steady progress improving fill rates and on-shelf availability as we focus on serving our current customers and attracting new customers to grow our distribution and volume. Additionally, We took various degrees of pricing in our key categories earlier this fiscal year to offset inflationary cost pressures. Recently, we've seen competitors follow by increasing their prices during Tyson's price gap relative to our competitors. This is supporting improved volume performance across our portfolio of prepared foods products as we are continuing to see price elasticities remain below historical levels. We're investing strategically in merchandising, and advertising to support the long-term health of our brands as their strength enables continued growth in both dollar and volume retail share. These factors, along with our strong business fundamentals, resulted in sequential quarterly share growth in many of our key retail categories, and we expect our retail share growth to continue. While the food service industry has yet to recover to pre-pandemic traffic levels, The Tyson focus six group is outpacing both total broad line and respective categories in volume sales up 18.9% and .9 share points in the last 52 weeks compared to last year according to NPD supply track data. The Tyson focus six group composed of value added chicken, breakfast sausage, dinner sausage, pepperoni pizza toppings, bacon, and Philly steak is also up 1.7 volume share points in the last 52 weeks compared to pre-pandemic levels. We believe strongly in our food service portfolio and are confident there is immediate and long-term growth ahead of this business as we align with key growing customers and execute our strategy across all categories to build momentum for the future. Our team members are essential to providing the products our customers and consumers demand. Staffing levels and the impact on operational throughput were a challenge in our business. We continue to make significant investments in our team members' experience, prioritizing these three key areas of health, safety, and well-being of our team members, total rewards and team member growth, and our one Tyson culture with digitalization as a key enabler. We're now seeing business results from investing in becoming the most sought-after place to work. Examples of these investments are free education, childcare solutions, citizenship support, transportation, maternity and paternity leave, and expanded mental health and well-being benefits. In August, we received national recognition for our innovative ride-sharing program benefiting team members across the nation. The program provides an option for team members who may have difficulty assessing reliable transportation to get to work and is improving their quality of life. Investments in enhanced benefits, digitalized processes and tools, and career growth opportunities for our team members are paying off. In October, we announced our One Tyson corporate office consolidation to world headquarters in Springdale, Arkansas. The move will enable excellence in execution by bringing our corporate business unit roles together on one campus, driving a culture that optimize collaboration, innovation, accelerates speed, and facilitates career growth for our team members. The feedback we've received from our customers for this change has been well received. These investments we're making in our people are part of our broader effort to evolve our business from an environmental, social, and governance perspective. Today, we are focused on three core pillars of our ESG framework, the formula to feed the future. Those three pillars are reimagining people and community impact, driving product responsibility from farm to table, and working toward achieving net zero. In July, we released our sustainability report for 2021, which highlights our ambition to become the world's most sustainable and transparent protein company. In addition to the investments in people mentioned, we also highlighted in our report our efforts around animal welfare, sustainable packaging, minimizing waste, water stewardship, and working within our operations and supply chain to reduce emissions. Significant progress was achieved in the past fiscal year in improving our scores, and metrics within ESG rating agencies. We're particularly proud of a more than 30% increase in our Dow Jones Sustainability Index score year over year, and we're taking more steps to continue to improve our standing with ESG stakeholders. In the past fiscal year, our productivity program outperformed on our commitments, delivering over $700 million in savings impact across all components of our business. This performance indicates how Tyson has remained focused on optimizing our business processes, digitalizing our supply chain and increasing automation, and aggressively managing SG&A across our operations. We expect the productivity program will continue to outperform our original expectations of more than $1 billion in recurring savings by the end of fiscal year 2024. The program is now on track to deliver this commitment by the end of fiscal year 2023. a year earlier than expected. As mentioned before, these recurring savings support the partial offset of inflationary pressures, while at the same time improving our competitiveness in the marketplace. Automation remains a top priority, and I'm very pleased with the aggressive rollout of automation technologies across all segments in fiscal year 2022, including continuing to scale debone automation in our poultry operations and pack out automation across all businesses. I will now turn the call over to John to walk us through more detail on our financial results for the fourth quarter.