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Tyson Foods is closing several chicken processing plants as costs rise

Tyson Foods Inc. is closing several chicken processing plants as the company struggles to downsize amid rising costs.

The company said Monday that four plants are being closed.

The closing plants are located in North Little Rock, Arkansas; Corydon, Indiana; Dexter, Missouri; and Noel, Missouri.

In a statement about the closings, Tyson said it will move production to other facilities and halt operations at all four plants during the first two quarters of 2024.

Based on a preliminary analysis, Tyson estimates there are currently $300 million to $400 million in total charges.

Tyson launched a plan in fiscal 2022 where it targeted $1 billion in productivity savings by the end of fiscal 2024.

The company said it achieved more than $700 million in savings in fiscal 2022, which partially offset the impacts of inflationary market conditions.

More than a year ahead of schedule, Tyson surpassed its $1 billion target in the second quarter of fiscal 2023.

However, in May, Tyson posted a surprise second-quarter loss.

The company lowered its sales forecast due to the cost of plant closings and layoffs.

Tyson has been struggling to cut costs in recent months.

It closed its corporate offices in Chicago and South Dakota late last year and consolidated its workforce in Arkansas.

In March, Tyson announced the closure of two plants in Arkansas and Virginia in order to better utilize available capacity at other facilities.

In April, Tyson laid off 15 percent of its senior managers and 10 percent of its corporate workers as it faces steep inflation in labor, grain and other inputs.

The company also reported its fiscal third quarter financial results on Monday.

Tyson posted a loss of $417 million, or $1.18 per share, for the period ended July 1.

A year earlier it earned $750 million, or $2.07 per share.

The current quarter included a goodwill impairment charge of $448 million.

Stripping out asset impairment charges and restructuring costs, the Springdale, Arkansas-based company earned 15 cents per share.

That’s well below the 34 cents per share that analysts polled by Zacks Investment Research were expecting.

Revenue totaled $13.14 billion, down from $13.5 billion a year ago.

Tyson still projects fiscal 2023 revenue of $53 billion to $54 billion.

Analysts polled by FactSet expect revenue of $53.74 billion.

Shares fell 8 percent before the market opened.

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