Tyson Foods, Inc. (NYSE:TSN) Q1 2020 Earnings Conference Call - Final Transcript
Feb 06, 2020 • 09:00 am ET
to develop new and creative solutions to sustainably feed the world with affordable nutritious food. We believe this reflects positively on our strategy, which is focused on sustaining our company in our world for future generations, while growing our business by delivering superior value to consumers and customers and fueling our growth and returns through commercial, operational and financial excellence.
Turning to our results, our overall first quarter was in line with expectations with adjusted earnings of $1.66 per share. Beef and Pork results were strong, Prepared foods drove growth in retail consumption, Chicken improved operationally, although continue to face soft pricing which weighed on results. Looking across the marketplace, consumption of our retail Prepared food products has been outstanding. Both the Tyson core retail business lines, which were up more than 5% and total Tyson retail up more than 3% outpaced volume and sales growth versus the top-10 retail food manufacturers in the 52 weeks ending December 28. This growth contrasts with the total food and beverage category, which was down 0.4% for the same period.
We've now experienced six consecutive quarters of growth. Our core business lines are outpacing the categories with volume share growth of 1% and all core business fines are holding or growing share. In the foodservice channel, our foodservice-focused six product lines grew 3.5% at more than twice the total broad line distribution channel growth of 1.6% over the last 13 weeks. The power of our foodservice brands, innovation and capabilities across all channels has set the stage for growth. In the last three months, Jimmy Dean breakfast sausage volume grew 10%, Tyson Red Label grew 17%, and the Tyson brand grew 8%.
Now let's take a look at our business segments. In Prepared Foods, growth in share performance has been outstanding, especially with our big brands. Retail innovation launched at the end of fiscal 2019 is performing well with velocities meeting or exceeding targets on our national launches of Jimmy Dean Biscuit Roll Ups and Jimmy Dean Morning Combos with both demonstrating velocity performance in the top half of the respective categories. While still early, Biscuit Roll Up show potential for driving category growth.
Prepared Foods profit margin in the first quarter was impacted by an $80 million increase in raw material costs, driven by Beef trim and Hams. Some of this increase was offset by pricing. Our Prepared Foods may continue to experience volatile input cost. We continue to experience some operational effects from our recent ERP system implementation, which impacted margins by roughly $40 million in the quarter. About half of this was discounted sales with the remainder related to inventory write-downs and donations. Although the effects have persisted longer than anticipated, we continue to work aggressively to resolve them and we are seeing progress.In the Alternative Protein category, the Raised and Rooted brands is only the beginning of our plan to build the world's leading portfolio of plant protein products. In the back half of the year, we're planning multiple