Tyson Foods, Inc.

Good morning, everyone, and welcome to the Tyson Foods third quarter 2023 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please say no to 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 and then one on your touchtone telephones. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Sean Cornett from Investor Relations. Sir, please go ahead.

Good morning and welcome to Tyson Foods Fiscal Third Quarter 2023 Earnings Conference Call. 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 a Q&A. Additionally, Joining us today are Brady Stewart, Group President Fresh Meats, Stuart Glendening, Group President Prepared Foods, Wes Morris, Group President Poultry, and Amy Tu, President International and Chief Administrative Officer. 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. During today's call, we will make forward-looking statements regarding our expectations for the future. 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. Forward-looking statements include all comments reflecting our expectations, assumptions, or beliefs about future events or performance that do not relate solely to historical periods. These forward-looking statements are subject to certain risks, uncertainties, and assumptions which may cause actual results to differ materially from our current projections. 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. Please note that 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. Now I'll turn the call over to Donnie.

Thanks, Sean, and thank you to everyone for joining us this morning. Before we review the results, I'd like to start out by discussing my vision for Tyson and the decisive actions that we're taking to successfully navigate the current market environment. We remain fully committed to our vision of delivering sustainable, top-line growth and margin improvement over the long run. With our leadership team, we're executing a multi-point plan focused on efficiency and modernization, including taking a much closer look at our cost structure across the business to drive operational excellence. We are already seeing tangible benefits of our efforts. We've been through market cycles before, and I'm confident that we have the right strategy, seasoned leadership, and team members in place to emerge stronger from this one. We're making good progress and saw sequential improvements in our results in Q3. We're not yet where we need to be, so we continue to focus on what we can control. Earlier today, we announced our intention to close four more of our chicken facilities, demonstrating our commitment to taking bold actions to improve performance. Beyond these important actions, I remain optimistic about our future. We are a leader in our industry, and we continue to innovate and take market share in most of our categories. I remain very confident in our long-term strategy and we are leaving no stone unturned to maximize value for shareholders. Diving into our results, we continue to compare against strong performance across our segments last year. However, I am encouraged by the sequential improvements we've made in Q3. Let me start with chicken. Market conditions in chicken are still challenged with commodity prices across most cuts remaining significantly lower compared to last year. However, Adjusted operating income improved by more than $100 million, sequentially, without any material benefits of market tailwinds. The sequential increase was primarily due to internal actions we took. For example, in our fiscal Q2, we decided to close two of our plants, convert two others to boneless, and rationalize our SKUs, inventory, and other assets. In Q3, the team made significant improvements in yield, spend, and efficiency, leading to strong improvement in profitability in just one quarter. As we become more productive with automation and team member engagement, we can further optimize our footprint and reallocate resources to more efficient plants while still having ample capacity to service and grow with our customers. This enabled us to announce today that we plan to close four additional chicken facilities, bringing the total announced closures to six this year. We also recently made the decision to transition away from the no antibiotics ever labeling for Tyson branded chicken to a no antibiotics important for human medicine approach. Data suggests the use of ionophores can lead to more uniform birds with consistent weight. In turn, we can more accurately forecast supply and demand, helping to meet the needs of our customers and consumers. And I want to emphasize that we will continue to evaluate all options. including more actions like these across all of our businesses. In beef, we performed better than expected. Our results were driven by our disciplined approach to balancing supply with customer demand while taking advantage of seasonal increases in cutout values. However, the beef industry will likely continue facing headwinds. As you may have seen in the latest USDA cattle inventory report, herd liquidation continues to tighten supply, leading to higher cattle costs narrowing spreads, and difficult export market conditions. Pork remains under pressure across the industry, and we continue to see headwinds there. With both our internal live production and our external sourced hog supply, increased feed costs and low cutouts drove spread compression through our results. We also had incremental negative impacts in Q3 from a fire at one of our processing facilities. Finally, to prepared foods, which is a key growth pillar for the future. The business performed well in Q3. In retail, our core business line saw strong volume growth in the quarter and continued to gain pound and dollar share. In broad line food service, Tyson focus six continues to outpace the industry in volume growth. This led to better than anticipated margins in prepared foods. In short, our results this quarter demonstrate that chicken is gaining momentum, and our branded foods business remains an area of strength. Let me add some further color on the performance of our branded business versus our top peers. As I mentioned earlier, our Tyson Core business lines, including the iconic retail brands Tyson, Jimmy Dean, Hillshire Farm, and Ballpark, continue to outpace Total Food and Beverage and our peers in volume growth of 5% versus a year ago. We believe this points to the strength of our core brands and sets us up well for the future. We continue to show market share leadership in most of the retail categories in which we compete, delivering both dollar and pound share growth in the aggregate and across day parts. Tyson, Jimmy Dean, Hill Shower Farm, and Ballpark all hold favorite brand status with consumers over our nearest competitor by a wide margin. Our share performance and brand strength demonstrate the momentum we've gained with consumers, and they will continue to spend on brands they know and trust. Likewise, we will continue to invest in merchandising and advertising to support our brands. While we are pleased with our brand strength and share performance, we are constantly building new innovations to expand the appeal and market opportunities for our products. Over the past few years, our innovations have generated roughly $2 billion in annual sales. Let me highlight a few products we've launched this fiscal year that I'm most excited about. Earlier this year, we announced the Tyson Original Chicken Breast Sandwich for Retail Channel, which won the People Magazine Food Award for Best Frozen Sandwich. Furthermore, we were excited to see that more than 70% of the buyers were new to the Tyson brand and more than 20% were new to the category. We also launched Tyson Chicken Sandwiches in food service space where our sandwiches won awards from food and beverage industry, National Agri-Marketing Association, and National Association of Convenience Stores. As you can see, our innovation in chicken is able to be deployed across channels and occasions, highlighting the power of our scale. Moving to Jimmy Dean, which is already a clear leader in the breakfast meal occasion, we're expanding with differentiated capability-based innovation by launching handheld breakfast items. For instance, this year we launched the Jimmy Dean biscuit roll-ups in Food Service Channel and maple grilled cakes and toaster pop-ups in retail. We are seeing strong customer adoption of these products and promising early consumer demand. In Hillshire Farm, one area of focus in retail has been the trend toward healthy snacking. For instance, we launched Hillshire Farm snack kits with 100% real premium meats, cheeses, and crackers, all ready to eat on the go. If you haven't already, I encourage you to try our snack kits like oven roasted turkey breast, cheddar cheese, and wheat crackers. We launch these products at attractive price points and have already seen strong acceptance with major retail customers. In the food service channel, we are now participating in the fast growing cupping pepperoni category. with our very own Hillshire branded cupping pepperoni product. We are always on the lookout for how to keep our brands on trend across channels. Now, I'll turn things over to John to review our financial results for the quarter in more detail.