Chicken giant Sanderson Farms, which operates a 1,500-employee plant in Waco, had a bone to pick with the National Football League when it released fourth-quarter and annual sales totals Thursday.
Sanderson Farms CEO Joe F. Sanderson Jr. suggested NFL protests that involve players taking a knee during the national anthem have turned off fans who no longer flock to sports bars to devour chicken wings.
“The NFL has hurt the wing stores,” Sanderson said during a conference call to discuss earnings. “There’s not as much traffic going through some of the wing places we service.”
He said the link between wing sales and the NFL protests is based on reports from wing restaurants, not on Sanderson Farms’ own assessment.
Wing were flying high for much of 2017, hitting record-high prices in August and boosting share prices for Sanderson and other chicken processors, according to metrics reported by the Bloomberg news service. But prices are down 14 percent from a year ago after three straight months of declines, according to a Bloomberg story on Sanderson’s latest earnings report.
Papa John’s International Inc. has reported protests by NFL players have dampened the public’s appetite for pizza, causing sales to decline, but Wingstop Inc. has reported it has noticed no drop-off in business, Bloomberg reported.
Mike Cockrell, Sanderson Farms’ chief financial officer, said during a phone interview the company sells wings for use in national and regional chains and to food-service providers including Sysco.
“These places are telling us that wing sales are lighter than normal,” Cockrell said. “Wing prices usually go up during football season, but that has not been the case this year. Of course, it must be remembered that wing prices were at record highs during the summer, when they typically decline because people are thinking about beaches, not wings.”
Wing prices typically start to climb during preseason football and peak on Super Bowl Sunday, Cockrell said. Prices typically pick back up during March Madness, he said.
Cockrell said he can empathize with fans wanting to watch more football and fewer protests, “but I also understand that players have views and a right to express their opinions.”
Todd Stoner, a financial adviser with Disciplined Investors in Waco, said Sanderson Farms’ stock price dropped 13 percent, to $145.85, on Thursday, with investors reacting to the company’s lackluster earnings report.
“They had earnings of $3.20 (per share), whereas analysts had predicted earnings of $3.62 during the company’s fourth quarter,” Stoner said.
Despite the tumble Thursday, the company’s stock remains strong, having increased in value by 50 percent for most of the year.
Sanderson Farms officials reported that production disruptions caused by Hurricane Harvey hurt earnings.
Stoner said blaming the NFL for disappointing wing sales makes sense.
“But there are other factors to consider, including changes in viewership, especially among younger people who increasingly spend more time on Facebook or watching Netflix and are not as devoted to network TV,” Stoner said. “Even ratings for cable shows such as ESPN are down.”
Cockrell said he expects wing prices to rebound during the holidays, while boneless chicken breasts will take off early next year, as consumers start watching their calorie intake for New Year’s resolutions.
During Thursday’s earnings call, Sanderson said restaurants substituting boneless options for chicken wings has also cut into demand for actual wings.
Waco Restaurant Association President Kyle Citrano said he has heard no complaints about declining sales related to the NFL’s actions.