Tyson Foods, Inc. (NYSE:TSN) Q2 2015 Earnings Conference Call - Final Transcript
May 04, 2015 • 09:00 am ET
fresh chicken was up 4% indicating continued strong domestic demand for protein. At foodservice, dollar sales were up 3% for all commercial restaurants. The largest growth came in QSR Mexican with dollar sales up 11% in the March-ending year and QSR chicken has the second highest growth rate.
Economic conditions for spending are the most favorable in seven years. Unemployment is down, wages are growing, consumer confidence is up, and inflation is in check. Consumers are spending less on fuel, and more on food. Although value consciousness appears to be here to stay, the consumer's ability and willingness to pay for value-added benefit is moving in a direction to afford and support protein innovation in the marketplace. We'll leverage this direction as we continue to deliver relevant innovation with new varieties for Park's Finest hot dogs by Ball Park and Hillshire Farm natural lunchmeat.
We'll also be introducing three disruptive innovation platforms in Q4, capitalizing on the snacking and freshness consumer trends with the launches of Hillshire Snacking, Ball Park jerky and Jimmy Dean's simple scrambles. We'll break into new sections of the store with these launches and while still continuing to expand our convenient meal and snacking offerings in frozen chicken. Our Hillshire Snacking launch continues to show success in test market. Within the test, category growth is up 17% with Hillshire responsible for nearly half the growth and especially important to our retail partners, over a third of Hillshire's Snacking dollars are incremental to the category.
We're also seeing successful foodservice innovation behind Chef Pierre, Layer Luxe pies, and we're looking forward to launches coming this month within foodservice brands such as Tyson Red Label Chicken, and our expansion of Bistro Collection Desserts. All this puts Tyson Foods in a solid position. Cash flow is strong, giving us options for 2016. If there aren't any strategic acquisitions of interest, we'll invest in our business and buy back stock.
Our balanced portfolio, increased synergy capture, and strong momentum in Prepared Foods, coupled with favorable pork raw material costs, give us confidence that we'll achieve our annual guidance of $3.30 to $3.40 adjusted EPS despite near-term challenges. We're very well positioned with sound fundamentals and a solid growth story.
Synergy capture is going very well. We're gaining momentum in retail brand as we make rapid progress with the integration. We have advantaged brands in advantaged categories, protein is extremely relevant to today's consumers. According to IRI, 99% of our refrigerated product sales are in categories that are showing positive year-over-year growth. In frozen food, 92% of our products are in categories that are showing growth over last year. We are currently number two among all other major food and beverage companies in terms of dollar sales growth for the 52 weeks ended March 19. And let's not forget foodservice where restaurant traffic is showing growth as consumers benefit from lower gas prices and improved economic conditions. We have a lot going for us and we're comfortable projecting at least 10%