Tyson Foods, Inc.

Good morning and welcome to the Tyson Foods first quarter 2024 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 Sean Cornett, Vice President, Investor Relations. Please go ahead.

Good morning and welcome to Tyson Foods' fiscal first quarter 2024 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 Q&A. Additionally, joining us today are Brady Stewart, Group President, Beef and 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. 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 risk, 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 Don.

Thanks, Sean, and thank you to everyone for joining us this morning. As you may have seen in our press release this morning, fiscal 2024 is off to a good start, with solid performance in Q1 giving us confidence in our full-year outlook. The momentum we established in the back half of last year continued in Q1, highlighted by a $175 million improvement in adjusted operating income. 130 basis points of AOI margin expansion, and near doubling of adjusted EPS, all on a sequential basis. As we begin fiscal 24, we're witnessing the benefits of our core multi-protein portfolio. Chicken and pork are offsetting beef headwinds, while prepared foods continue to generate strong profit dollars and margins. While we can't control the macro environment, Our focus on what we can control has been evident in Q1. Our performance reflects a commitment to operational excellence. We are more agile, collaborative, and disciplined business than a year ago, and we have a long runway of opportunities in front of us. I'm proud of our team members' continued efforts to enhance operational performance and want to thank all of them for their high level of engagement and their part in delivering our results in this quarter. We're controlling what we can to drive cash flow as well. Our disciplined approach to CapEx and working capital help generate strong cash flow in the quarter. Crudit cash deployment is part of our strategy to build financial strength and will position us well when market dynamics turn in our favor. You've seen us take bold actions to improve performance and everything remains on the table to drive operational excellence and address inefficiencies. Our plan is working. and we're seeing tangible benefits of our efforts as evidenced by improvements in chicken and pork. While I'm pleased by the performance in Q1, we still have more work ahead of us, and we're cautiously optimistic and laser focused on achieving what we set out to do this year. Our brands resonate with consumers, and we're maintaining strong market share despite comparing to our record position last year and some overall category consumption softness in Q1. We will continue to support our brands through innovation, marketing, and strong customer partnerships while meeting consumers where they are. I remain highly confident in our long-term strategy based on a broad portfolio of core proteins and strong brands and am optimistic about our future. We're leaving no stone unturned to drive long-term value for our shareholders. Now, let's delve into an update on share position of our branded portfolio. Our Q1 pound share in our core business lines, which include product lines from our iconic brands, Tyson, Jimmy Dean, Hill Shower Farm, State Fair, Adele's, and Ballpark, remains at historically high levels despite a modest decline compared to record share in Q1 last year. In fact, our core business lines have grown pound share by more than 400 basis points since Q1 of 2019. While inflation is easing, consumers are still facing high prices compared to two years ago. However, they are still willing to purchase brands they know and trust, and this is reflected in our share. We're also focused on customer elasticity and balancing with our own costs. We believe our approach is working. The value proposition of our iconic brands resonates strongly with consumers. Over the past year, nearly three out of four U.S. households purchased a TysonCorp Business Line product and this penetration rate is growing. What gets me even more excited is that our product line with the highest penetration rate is only in about a third of households, leaving us plenty of room for continued growth over the long run. Moving on to segment performance, starting with prepared foods. Our food service volumes continue gaining traction as we strive to grow this business with a focus on customer diversification and margin of creative channels. Operational efficiencies and lower raw material costs drove strong adjusted operating profits and margins. Our branded foods business remains a strategic growth pillar, and we are committed to supporting and growing our brands through innovation, price pack architecture, high ROI marketing support, and strong customer partnerships. This is critically important in an economic environment where consumers remain more discerning with their purchasing decisions. In chicken, The momentum established in the second half of fiscal 23 continued in Q1 with a third consecutive quarter of over $100 million in sequential AOI increase. Operational improvements, including the bold actions we've taken, along with improvements in live operations, yield, labor efficiency, and customer service, as well as improving market conditions, were the primary drivers in Q1. Limited cattle supply led to spread compression as we expected. Roughly half the loss in Q1 was related to an inventory evaluation adjustment, which was primarily driven by highly volatile cattle futures. While spreads are expected to remain tight, our goal remains to be best-in-class operators so that we can manage the business as efficiently as possible. We have identified incremental opportunities to improve our execution and help offset some of the challenges from the current cattle cycle. Turning to pork. Better supply drove lower hog costs, leading to improving spreads. Our team's focus on operational execution allowed us to capture the benefits of these favorable market dynamics, which resulted in improved profits both on a year-over-year and sequential basis. Before I hand it over to John for a financial review, let's reiterate our priorities for the year. First, we're committed to improving our financial strength and driving cash flow to support our dividend as demonstrated in Q1. Over the past year, we announced the closure of six of our older, less efficient plants in chicken and two of our smaller beef case ready value added facilities. We're already seeing the benefits of these actions and we'll continue to evaluate opportunities to drive efficiency across our segments. In chicken, our focus on enhancing our competitiveness continues. In prepared foods, we want to build growth momentum behind capacity additions coming online, increase our brand household penetration, and diversify and grow our food service business. In beef, we acknowledge the challenges and will be prepared for multiple outcomes during the current cattle cycle. In pork, we're gaining momentum in operational execution and are excited for continued improvements. With that, I'll turn the call over to John to discuss our financial results and outlook.