AI Takeaway
TSN (Tyson Foods) reported a sharp Q1 FY2026 earnings decline, with net income falling 76.3% year-over-year to $85M despite a 5.1% revenue increase to $14.31B, as surging input costs compressed gross margins from 8.0% to 5.6%.
Revenue
$14.31B
++5.06% YoY
EPS (Diluted)
$0.24
-76.24% YoY
Gross Margin
5.6%
-2.39% YoY
Operating Income
$302M
-47.93% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Revenue grew 5.1% YoY to $14.31B in Q1 FY2026, but Cost of Revenue surged 7.8% YoY to $13.51B, meaning cost growth significantly outpaced top-line growth and eroded profitability across the business.
Source: Source: 10-Q Income Statement
Gross profit fell 26.2% YoY to $808M, pushing gross margin down approximately 240 basis points from 8.0% to 5.6%. This indicates significant input cost inflation — likely feed costs, labor, and raw material prices — squeezing the spread between selling prices and production costs.
Source: Source: 10-Q Income Statement
Operating income declined 47.9% YoY to $302M, with operating margin contracting from 4.3% to 2.1%. SG&A expenses were slightly lower at $506M (down 1.7% YoY), suggesting the margin deterioration was driven almost entirely by cost of goods sold rather than overhead.
Source: Source: 10-Q Income Statement
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Upgrade to unlockCost of revenue grew 7.8% YoY versus revenue growth of only 5.1%, resulting in a 26.2% decline in gross profit. If feed costs, live cattle/hog prices, or labor costs remain elevated, TSN's already thin margins (gross margin of 5.6%) could compress further, threatening profitability.
Source: Source: 10-Q Income Statement
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Upgrade to unlockReported EPS of $0.97 versus the $0.95 analyst consensus — a +2.1% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $14.31B | $13.62B | +5.06% |
Cost of Revenue | $13.51B | $12.53B | +7.80% |
Gross Profit | $808M | $1.09B | -26.21% |
Operating Income | $302M | $580M | -47.93% |
Net Income | $85M | $359M | -76.32% |
EPS (Diluted) | $0.24 | $1.01 | -76.24% |
SG&A Expense | $506M | $515M | -1.75% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $36.02B | $37.31B | -3.46% |
Current Assets | $9.51B | $10.08B | -5.65% |
Current Liabilities | $6.2B | $4.78B | +29.77% |
Stockholders' Equity | $18.02B | $18.5B | -2.59% |
Cash & Equivalents | $1.28B | $2.29B | -44.24% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $942M | $1.03B | -8.63% |
Investing Cash Flow | $-183M | $-233M | +21.46% |
Financing Cash Flow | $-718M | $-195M | -268.21% |
D&A | $376M | $348M | +8.05% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 5.6% | 8.0% | -2.39% |
Operating Margin | 2.1% | 4.3% | -2.15% |
Net Margin | 0.6% | — | — |
ROE | 0.5% | — | — |
ROA | 0.2% | — | — |
Current Ratio | $1.533 | — | — |
Other companies in Packaged Foods & Meats
Based on the filing data, TSN reported diluted EPS of $0.24 in Q1 FY2026, down 76.2% from $1.01 in the prior year period. Whether this beat or missed Wall Street consensus estimates is not determinable from the filing alone, but the dramatic YoY decline signals a very challenging quarter relative to historical performance.
TSN's net income fell 76.3% YoY to $85M primarily because cost of revenue surged 7.8% to $13.51B while revenue grew only 5.1% to $14.31B, compressing gross margin from 8.0% to 5.6%. This cost-price squeeze — likely driven by elevated feed, livestock, and labor costs — cascaded down the income statement to nearly eliminate profitability.
The key takeaways are: revenue grew 5.1% to $14.31B but was overwhelmed by a 7.8% rise in production costs; gross profit fell 26.2% and net income collapsed 76.3% to just $85M; and cash fell 44% YoY to $1.28B while current liabilities surged 29.8%, tightening the company's near-term liquidity position.
TSN's financial health shows signs of stress: the current ratio of 1.53 is adequate but deteriorating, cash dropped to $1.28B (down 44% YoY), and net margin is a razor-thin 0.59%. Operating cash flow of $942M remains positive and provides a buffer, but the sharp rise in current liabilities and declining earnings warrant close attention.
TSN's revenue grew 5.1% YoY to $14.31B in Q1 FY2026, up from $13.62B in the prior year period. However, this top-line growth was overshadowed by even faster cost growth, meaning higher revenues did not translate into higher profits — in fact, profitability declined sharply across all margin metrics.