Donnie King
President & Chief Executive Officer at Tyson Foods
Thank you, Brandon, and thank you to everyone for joining us for the call.
Earlier today, we reported solid third quarter and year-to-date results. We continue to navigate through a complex and dynamic operating environment, and I'm grateful for the hard work and dedication of our team members. Our results would not have been possible without them.
At our Investor Day last year, we shared three priorities with you: winning with team members, winning with customers and consumers, and winning with execution. And I'm pleased to say that we're making progress. For team members, our continuing investments are reducing turnover and improving staffing levels. For customers, our service levels are improving. Our execution, we're getting stronger, driving substantial savings and improving business results. I'm confident we're on the right track and recognize that there is more work to do.
Let me cover some highlights from the quarter. Our multi-protein portfolio enabled our business results. In the third quarter versus last year, we delivered substantially improved earnings in our Chicken segment as well as higher earnings in Prepared Foods, which partially offset a decline in Beef and Pork earnings and we continue to accelerate our productivity actions to improve efficiency across all segments.
With our iconic retail brands, Tyson, Jimmy Dean, Hillshire Farm and Ball Park, Tyson core business lines outpaced total food and beverage, up 13% in the last 13 weeks compared to pre-pandemic levels. We continue to be the market share leader in the majority of the retail core categories in which we compete. While gaining share in both bacon and breakfast sausage in six of the nine core business lines, we grew share versus our second quarter. I was also pleased to see continued growth in our e-commerce channel, where approximately one in five U.S. households bought a Tyson product during the past quarter with e-commerce sales growing 15% versus last year.
We're seeing some recovery in the foodservice channel with continued gains in quarterly sales. In broadline distribution, we have seen specific strength in branded value-added chicken, breakfast sausage and bacon. In this challenging economic environment, where our cost of goods has continued to increase, consumer demand for protein remains relatively steady. Our diverse portfolio allows us to meet customer and consumer needs across a broad range of products and price points even as consumers shift between proteins and products.
Our balance sheet grew stronger, providing optionality to invest in growth across our portfolio and return cash to shareholders. We have a disciplined approach to deploying capital with a focus on total shareholder return. Our year-to-date results clearly demonstrate that our diverse portfolio supports our growth objectives of growing faster than the overall market, improving operating margins and driving strong returns for our shareholders.
Now for highlights from our financial performance. Sales improved 8% for the third quarter and 16% year-to-date compared to the prior period. Our sales gains were largely driven by higher average sales price in Chicken and Prepared Foods. Average sales price increased in these segments in response to persistent increase in the cost of goods. Prices were lower in Beef, in line with expectations and Pork segment versus the same quarter last year.
We delivered solid operating income of nearly $1 billion because of our diversified portfolio. Year-to-date, we are up 15% over prior year. As expected, year-over-year third quarter earnings were lower as Beef margins declined relative to a year ago, but still performed well in comparison to historical results. Overall, earnings per share came in at $1.94 for the third quarter and $7.10 year-to-date. We remain confident our actions will improve our long-term volume performance. However, our total volume was down both for the quarter and year-to-date. We are focused on overcoming the supply chain challenges, running our plants full and reducing our costs.
Chicken volume is up year-to-date, driven by demand and operational improvements, but down for the quarter. Lower quarterly volumes were driven by the fiscal year '21 fire at our rendering plant in Hanceville, Alabama as well as lower outside purchases of meat, chicks and eggs. This was partially offset by increased levels of internal harvest versus the same quarter last year, and we expect internal growth to continue as we ramp up our bird supply. For the full year, we expect Chicken to deliver 1% to 2% volume growth.
In Prepared Foods, volumes are down 5.5% year-to-date due to supply chain challenges, uneven food service recovery and the impact of increased pricing. Note also that the divestiture of our Pet Treats business last year drives 1.2% of the total decline. Although retail volume is down, we maintained our market leadership positions. While the foodservice channel continues to recover, volume growth remains strong in the broadline distribution, led by breakfast sausage and bacon.
In Beef, volumes are down year-to-date but were up 1.3% versus the same quarter last year, and we continued to increase quarter-over-quarter, due to higher head throughput and carcass weight.
In Pork, volumes are down year-to-date by 2.1%, because of limited hog supply and lower export demand. We expect tightness in live hog inventories and declining export demand to continue to impact volumes in the fourth quarter.
In the International/Other segment, volumes are up 11.7% year-to-date and 21.9% versus the same quarter last year. Investments in capacity, innovation and brands are supporting our market share growth. Volume growth was driven by our strengthening QSR and retail performance. Overall, our International business is growing both organically and inorganically.
During Q4, we signed a joint venture agreement with Tanmiah Food Company in Saudi Arabia. This partnership will enable us to better serve our large global customers as well as expand our reach to new customers in the Middle East. We're investing in new plants and expanding existing capacity across our global network. Eight plants are being constructed, with two expected to begin operation this fiscal year and six more by the end of fiscal year '23. This additional capacity will enable our team to address capacity constraints accelerate our value-added growth and better serve growing consumer demand for protein.
We continue to make significant investments to attract and retain team members, including childcare, citizenship support, transportation, free technical and college education, on-site health clinics, maternity and paternity leave and other health benefits. Our nearside health centers in rural communities are seeing increased usage. These clinics provide team members, spouses and dependents, comprehensive health care services at little to no cost. Investment in team members are making an impact as higher pay and enhanced benefit offerings have led to lower turnover and absenteeism in our plants, which positions Tyson for future growth. We are committed to creating a differentiated work experience for our team members. These investments we're making in our people are part of our broader effort to evolve our business from an ESG standpoint. Over the past several years, we have made many investments to these ends. Today, we are focused on three core pillars of our ESG framework, the formula to feed the future. Those three pillars are: re-imagine people and community impact, drive product responsibility from farm to table, and working toward achieving net zero.
Earlier this quarter, we released our sustainability report for 2021, which highlights our ambition and commitments to become the world's most sustainable and transparent protein company. In addition to the investments in people I mentioned a few moments ago, we also highlighted in our report our efforts around animal welfare, sustainable packaging, minimizing waste, water stewardship and working within our operations and supply chain to reduce emissions. We're setting aggressive ESG goals and working to meet them.
As we run our business better, we are making process improvements, digitalizing the supply chain, increasing automation and aggressively managing SG&A across our operations. Our productivity program continues to deliver at the upper range of our initial projections and we'll realize more than $1 billion in recurring productivity savings by the end of fiscal year 2024. We're continuing to accelerate digitalization across Tyson through supply chain planning and executional processes to better serve our customer.
Automation remains a top priority for our business, and I'm very pleased with the aggressive rollout of automation technologies. And given the macroeconomic environment, we are taking action to cut costs, reduce spend and reassess every role across the business to ensure that the work we do is value added for our customers and consumers.
Finally, as we look for new and innovative ideas that can have the greatest impact on Tyson's productivity and sustainability objectives, we held the first-ever Tyson Demo Day. More than 100 companies were considered as presenters for the Demo Day, 20 were selected to make their pitch and ultimately, six companies were chosen for partnership. We are committed to strengthening our position as a global protein leader, and driving value creation for our shareholders.
At our Investor Day, we outlined five imperatives for strengthening our position as a global protein leader. I've spoken about transforming our team member experience, increasing capacity, investing in digital and automation and the strength of our balance sheet.
Chicken remains a key focus for our long-term success, and we are executing against our road map to restore top quartile performance for this segment. This quarter, we surpassed a 6% adjusted operating margin. We expect to reach 40 million head per week by the end of this fiscal year, and to continue to grow after that, enabling us to maximize our fixed cost leverage and grow our value-added business. We are optimizing our plant network by adding fully cooked capacity, converting plants for value-added production, implementing plant flexibility and optimizing our portfolio mix. We have come a long way and have more work to do, but I'm pleased with the progress that we are making in Chicken.
As we look to address projected demand growth over the next decade, we're using our financial strength to invest in our business. We will have invested nearly $1.9 billion in fiscal year '22 focused primarily on new capacity and automation objectives. Year-to-date, we returned to shareholders approximately $1.2 billion in dividends and share repurchases as we continue to prioritize shareholder return.
I will now turn the call over to Stewart to walk us through more detail on our financial results for the third quarter.
