Tyson Foods Inc trimmed its full-year revenue forecast on Monday, in a sign that price hikes and stubbornly high inflation are discouraging consumers from spending on its products.
Shares of the Jimmy Dean sausages maker fell 5% in premarket trading, as the company also missed second-quarter revenue estimates.
US meatpackers have bumped up prices of their products to safeguard margins from spiralling costs of animal feed, labor, freight and commodity prices, aggravated due to lingering drought situation and supply chain issues.
That, coupled with mounting recessionary fears in the United States, has forced budget-conscious consumers to opt for more affordable and cheaper alternatives over pricier meat.
Tyson now expects fiscal 2023 sales between $53 billion and $54 billion, compared with its previous forecast of $55 billion to $57 billion.
The Springdale, Arkansas-based meatpacker's net sales were $13.13 billion in the quarter ended 1 April, compared with analysts' average estimate of $13.62 billion, according to Refinitiv data.
Packaged food makers like Tyson Foods have so far witnessed very little pushback from consumers on price increases, which were undertaken due to rising costs.
However, at the time analysts raised concerns that surging inflation and rising interest rates could impact demand for premium steaks as consumers look for more affordable options.