Tyson Foods, Inc. TSN is gaining on rising demand in the retail channel. The company’s focus on protein-packed brands and capacity-expansion efforts are driving growth. Thanks to such upsides, the Zacks Rank #2 (Buy) company’s stock has rallied 17.7% in the past six months compared with the industry’s rise of 2.9%. The stock has comfortably outpaced the Zacks Consumer Staples sector’s decline of 4.5% during this time.

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Strong Performance

Tyson Foods has been benefiting from robust growth in the retail core business, while its foodservice business is seeing a rebound. During the first quarter of fiscal 2022, the company’s top and the bottom line increased year over year and surpassed the Zacks Consensus Estimate. Quarterly results gained from robust performance across the retail channel, which contributed nearly $350 million to the top line growth. The company’s retail core business lines, including brands like Tyson, Jimmy Dean, Hillshire Farm and Ball Park, sustained their volume share position. Higher sales from the foodservice channel drove sales by $1 billion. The company’s diverse protein portfolio, omnichannel capabilities, solid brands and value-added products contributed to the upside. Solid performance in the beef unit, earlier-than-anticipated recovery in prepared foods along with strong chicken and pork segments boosted profits.

Focus on Protein-Packed Brands

Tyson Foods is focused on higher protein production to cater to the rising demand for protein-packed food. For fiscal 2022, management anticipates sales in the upper end of the $49-$51 billion range. Volumes are expected to rise 2-3% year over year as the company is committed to optimizing its footprint and operating its plants at full capacity. For fiscal 2022, the United States Department of Agriculture (“USDA”) forecasts production in the Chicken segment to improve nearly 2%.

Tyson Foods boasts a rich portfolio of protein-packed brands that are growing rapidly across the globe. The company has undertaken the divesture of non-protein businesses (such as Sara Lee Frozen Bakery, Kettle and Van’s) to focus more on the growing protein-packed food arena. TSN has been steadily expanding fresh prepared foods offering, considering consumers’ inclination toward natural fresh meat offerings without any added hormones or antibiotics. In June 2021, Tyson Foods announced that it is rolling out a range of plant-based products in chosen retail markets and digital platforms in the Asia Pacific under the First Pride brand. The introduction of plant-based alternatives in the region brings Tyson Foods closer to its objective of building an impressive portfolio of plant protein brands. In January 2021, the company launched new alternative protein offerings under the Jimmy Dean Label.