Unit Level Dashboard June 2023

Jun 5, 2023 | Dashboard, Restaurant Research

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Commodity Costs Continue to Moderate

While still elevated, commodity costs are moderating with several items currently at an LTM low including egg prices which are down dramatically in May (-65% y/y). Notably, beef is the outlier due to recent cattle herd reductions which continue to tighten supply and increase competition for cattle.

RR Commodity Cost Index
Key Cost Trends Chart

Tyson Foods Fiscal 2Q:23 Commodity Commentary


  • Commodity prices for most fresh chicken cuts were much lower than last year, with boneless breast meat, tenders & wings down more than -50% y/y.
  • Industry hatch rates were lower than 4 – 5 years ago.
  • 2 bone-in chicken plants were converted to boneless to continue growing with an important customer.
  • Finished inventory pounds were reduced by -20% y/y during the quarter.


  • Fiscal 2Q23 beef sales declined -8.3% y/y on top of record high sales during fiscal 2Q22. Price was down -5.4% y/y due to reduced domestic demand and softer export markets while volume was down -2.9% y/y due to fewer head processed.
  • Cow-calf operators were incentivized by high interest rates and drought conditions to market their heifers into the feed yards as opposed to retaining them for breeding. Fortunately, recent moisture increases are alleviating drought conditions.

2023 USDA Outlook by Protein:

  • Beef: domestic beef production will decrease approximately -4% y/y.
  • Pork: domestic pork production will be relatively flat.
  • Chicken: chicken production will increase approximately +3% y/y.

Unit Level Margins

A combination of lower commodity costs (COGS improved 1.1% y/y & 0.5% q/q) and significant menu price increases (1Q:23 CPI was +7.3% for QSR & +8.0% for FSR) helped drive 1Q23 store level operating margins higher as outlined below.

Sales & Op. Margin Graph
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