Tyson's Q3 2025: Beef Impairment Tanks Profits Despite Sales Growth

Tyson Foods, Inc. (TSN), one of the world's largest food companies and a leading producer of chicken, beef, pork, and prepared foods, recently released its financial results for the third quarter of fiscal 2025. We're diving into the numbers from its latest 10-Q filing to see how the company is performing and what the income statement reveals about its current challenges and successes.

The quarter presents a mixed picture: while overall sales are up, a significant impairment charge has severely impacted profits, revealing deep troubles in one of its core segments.

Sales Rise, but Profits Tumble

At first glance, Tyson's top line looks healthy. Sales for the quarter ended June 28, 2025, increased by 4.0% to $13.9 billion, up from $13.4 billion in the same period last year. This growth was primarily driven by a 3.7% increase in average sales prices, as sales volume remained relatively flat.

However, the story changes dramatically when we look at the bottom line. Net income attributable to Tyson plummeted to just $61 million, a stark drop from the $191 million reported in the prior-year quarter.

The main culprit for this profit collapse was a massive $343 million goodwill impairment charge. In simple terms, a goodwill impairment is an accounting charge that companies take when the value of an acquired business is no longer as high as it is on the books. This non-cash charge, which is not tax-deductible, indicates a significant reassessment of the future earning potential of the business unit in question—in this case, Tyson's Beef segment.

To better understand how Tyson's revenue flowed through various costs to arrive at its net income, the following diagram visualizes the income statement for the quarter.

A Story of Segment Divergence

The true narrative of Tyson's quarter is found in the performance of its individual business segments. The results show a clear divergence, with some divisions thriving while others face intense pressure.

• Beef in the Red: The Beef segment is facing a severe downturn. It posted a staggering operating loss of $494 million for the quarter, a dramatic deterioration from the $69 million loss a year ago. The filing points to higher cattle costs as a primary driver. The $343 million goodwill impairment charge within this segment underscores the deep-seated challenges and dimmer outlook for this part of the business.

• Chicken and Prepared Foods Soar: In stark contrast, the Chicken and Prepared Foods segments were the quarter's heroes.

  • The Chicken segment's operating income grew to $367 million from $244 million, benefiting from increased domestic production and lower feed ingredient costs.
  • The Prepared Foods segment, which includes well-known brands like Jimmy Dean and Hillshire Farm, saw its operating income climb to $302 million from $203 million. Higher prices successfully offset a slight dip in sales volume attributed to a "challenging consumer environment."

• Pork Swings to Profit: The Pork segment also showed improvement, swinging from a $62 million operating loss last year to a $36 million operating income this quarter.

Navigating a Volatile Market

Tyson's Q3 2025 results highlight the inherent volatility of a commodity-driven business. While the company's diversified model is a clear strength—with strong performance in Chicken and Prepared Foods cushioning the blow from Beef—it cannot entirely escape the pressure of soaring input costs in its largest segment. The significant goodwill write-down in the Beef division signals that these headwinds are not just a temporary issue. Investors will be watching closely to see how Tyson navigates these persistent challenges and whether the strength in its other divisions can continue to carry the weight.