Tyson Foods' Original Philly Buyout To Aid Prepared Foods
Zacks Investment Research | Nov 13, 2017 10:09PM ET
Tyson Foods, Inc. (NYSE:TSN) recently announced the buyout of Original Philly Holdings, which specializes in manufacturing raw and fully-cooked Philly-style sandwich steak and cheesesteak appetizers. Original Philly, which will be included in Tyson Foods’ Prepared Foods segment, is quite popular in the food industry.
Original Philly operates through two business units namely — Original Philly Cheesesteak Company (producing sandwich steak products) and Philadelphia Pre-Cooked Steak Company (producing fully-cooked sandwich steak products). This Philadelphia-based company flaunts a strong customer base along with convenience stores, retail and foodservice providers.
Original Philly’s addition is likely to benefit Tyson Foods. The company has been focused on undertaking acquisitions to augment offerings, especially in the protein-packed category of food products and brands.
Original Philly to Boost Prepared Foods Segment Performance
Tyson Foods’ Prepared Foods segment has been reaping benefits from increased consumer demand for protein-packed and fresh food offerings. The company has been making several investments to enhance the segment’s performance. Notably, the Prepared Foods segment has been delivering sturdy results owing to the acquisition of AdvancePierre. In the company’s fourth-quarter fiscal 2017 results, sales volume in the Prepared Foods segment increased 9.5%. We expect that the addition of Original Philly will further aid the segment’s performance in the near term.
Surging Demand for Protein-Packed Products Bodes Well
Amongst other protein-packed food categories, Tyson Foods Chicken and Beef segments have also been performing favorably, owing to higher demand. The company has been divesting its non-protein businesses and allocating resources toward more profitable segments in the areas of chicken and beef products as well as other fresh food offerings.
Tyson Foods’ strategic efforts to benefit from the rising demand for protein-packed food products through acquisitions, has been driving the top- and bottom-line results. The company’s sturdy performance is reflected in its price performance. In the past six months, shares of this Zacks Rank #1 (Strong Buy) company have returned 30.2%, compared with the Zacks Investment Research
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