Tyson Foods (NYSE: TSN) has apparently expedited its CEO succession plans in light of weaker-than-expected fourth-quarter results.
The company announced that Chief Executive Donnie Smith will vacate his post on Dec. 31, to be replaced by current President Tom Hayes. Tyson Foods said that Smith will be at its disposal as a consultant for three years following the succession.
Smith has been CEO since late 2009. Hayes is a longtime veteran of the food sector, having previously served as Tyson Foods’ chief commercial officer. Prior to that, he served in a number of executive positions at Hillshire Brands and Sara Lee, both of which were eventually absorbed by Tyson Foods.
According to an article in The Wall Street Journal, citing “a person familiar with the matter,” the timing of Hayes’ accession was brought forward due to the company’s lower-than-expected guidance for its current fiscal year.
The move was announced concurrently with Tyson Foods’ fourth-quarter and fiscal 2016 report. For the former period, sales declined by 13% on a year-over-year basis to land at almost $9.16 billion. Net income, on the other hand, rose by 52% to $391 million ($1.03 per share). On an adjusted basis, the per-share bottom line was $0.96, against $0.83 in the same period one year ago.
Both line items, however, were well under analysts’ consensus estimates. These were for $9.38 billion in sales, and EPS of $1.17.
For the full fiscal year, sales fell by 11% to $36.88 billion, while net income increased 45% to nearly $1.77 billion ($4.53 per share).
Tyson Foods forecast its fiscal 2017 sales will be roughly the same as their were in 2016. It anticipates EPS in the range of $4.70 to $4.85, which is quite a bit shy of the average $4.98 projected by analysts.
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Eric Volkman has no position in any stocks mentioned.
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