Key Takeaways Pilgrim's Pride's Small Bird segment saw sales and margin growth from QSR demand in Q2.Strong QSR traffic, value focus and promotions drove nearly 10% foodservice volume growth.Small Bird strengthened PPC's U.S. protein portfolio as QSRs proved a stable, high-volume channel.Pilgrim's Pride Corporation’s ((PPC) Small Bird segment benefited from continued growth in the quick-service restaurant (“QSR”) channel during the second quarter of 2025. The U.S. Fresh portfolio expanded sales and margins, ...

Pilgrim's Pride (PPC) closed the most recent trading day at $42.82, moving -1.86% from the previous trading session. This change lagged the S&P 500's daily gain of 0.47%. On the other hand, the Dow registered a gain of 0.11%, and the technology-centric Nasdaq increased by 0.94%. The poultry producer's shares have seen a decrease of 9.05% over the last month, not keeping up with the Consumer Staples sector's loss of 1.75% and the S&P 500's gain of 2.32%.The investment community will be closely monitoring the ...

Core Viewpoint - Pilgrim's Pride Corporation reported solid second-quarter 2025 results, with both earnings and sales increasing year-over-year, benefiting from operational excellence and strategic partnerships [2][3]. Financial Performance - Adjusted earnings per share reached $1.70, up from $1.67 in the previous year, exceeding the Zacks Consensus Estimate of $1.54 [3]. - Net sales increased by 4.3% year-over-year to $4,757.4 million, driven by favorable commodity pricing and growth in U.S. and European markets [3]. - Gross profit rose to $715.3 million from $691.6 million, while operating income climbed 16.2% year-over-year to $512.3 million [3]. Segment Analysis - **U.S. Operations**: Net revenue increased to $2,820.4 million, with adjusted operating income at $413.5 million and margins expanding to 14.7% [5]. - **Europe Operations**: Revenue grew to $1,371.3 million, with adjusted operating income improving to $73.9 million, attributed to cost reduction and operational efficiencies [6]. - **Mexico Operations**: Net revenue decreased to $565.7 million due to currency pressures, but adjusted operating income remained at $86.9 million with margins of 15.4% [6]. Financial Health - The company ended the quarter with cash and cash equivalents of $849 million, long-term debt of $3,114.3 million, and total shareholders' equity of $3,752.5 million [7]. - Cash from operating activities for the six months ended June 29, 2025, was $622.1 million [7]. Analyst Sentiment - Analysts have not issued any earnings estimate revisions in the past two months, indicating a stable outlook [8]. VGM Scores - Pilgrim's Pride holds a strong Growth Score of A, a Momentum Score of A, and a Value Score of A, placing it in the top quintile for value investors [9][10]. Outlook - The company has a Zacks Rank 3 (Hold), suggesting an expectation of an in-line return from the stock in the upcoming months [11].

Financial Data and Key Metrics Changes - Net profit for FY 25 reached $58.5 million, exceeding the guided range of $55 to $58 million, reflecting a strong performance [2] - Earnings per share increased by 61%, driven by share buybacks [2] - EBITDA margin improved to 24% from 21% in the previous year, primarily due to price growth across the portfolio [3] - Gearing decreased significantly from 34.8% to 27.5%, attributed to strong operating cash flows [3][22] Business Line Data and Key Metrics Changes - Sales volume increased by approximately 11% to 2,768, with settlements up by 9% [4] - The company reported a strong contracts on hand position of $612 million as of June 25, up from $481 million a year ago [4][30] - The land bank activation rate stands at 71%, indicating a high percentage of land bank within active projects [4][13] Market Data and Key Metrics Changes - Australia is experiencing strong population growth of 1.7%, driven by overseas migration, alongside a chronic housing shortage of 400,000 dwellings [5][6] - Low vacancy rates in major capitals and an improving borrowing environment for customers are noted [6][7] - The company is well-positioned to leverage favorable market conditions, with strong appetite for capital in the Australian residential sector [7] Company Strategy and Development Direction - The company is undergoing a strategic review to capitalize on favorable market dynamics, with Goldman Sachs appointed to lead the review [9][10] - Strategic pillars remain focused on master plan communities, townhouses, and low-rise apartments, with geographic diversity across the portfolio [12] - The company aims to strengthen its position and unlock value for future growth [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the medium-term outlook, citing macro factors such as population growth and housing supply constraints as supportive of growth [32][33] - The company anticipates continued strong operating cash flows and earnings growth in FY 26 [33] Other Important Information - The company declared a final dividend of 5¢ per share, totaling 7.75¢ for the year [2] - The buyback program has reduced shares on issue by around 4% since its inception [25] Q&A Session Summary Question: Is a potential outcome of the strategic review a sale of the company? - Management clarified that while the market is strong, the intent of the strategic review is to ensure optimal positioning and not to shop the company around [34][35] Question: When do you expect to get the results of the strategic review? - The strategic review is underway, with an update expected at the AGM scheduled for later in November [36] Question: How do you think of 2026 cash generation and reinvestment needs? - Strong cash flow is expected, but there will be a need for reinvestment to sustain ongoing settlements [38][39] Question: Any updates on the University of Canberra project? - The project is progressing well, with first sales anticipated in FY 28 [40][41] Question: How do sales activity in Victoria and ACT compare to last year? - Sales in Victoria increased from 7% to 10%, while ACT saw a rise from zero to approximately 70-80 sales [42][43] Question: Guidance on operating cash flow for FY 2026? - Operating cash flows are expected to remain strong, but timing of settlements will impact the figures [45][46] Question: What percentage of current presales is expected to settle in FY 2026? - A high percentage of lots currently under contract is expected to settle in FY 26 [48]

Financial Performance - FY25 Net Operating Profit was $58.5 million, up 60% on FY24[8] - Operating Earnings per Share were 12.48 cents, up 61% on FY24[8] - FY25 Dividends Per Share (DPS) were 7.75 cents, up 82% on FY24[8] - Book NTA per share increased by 5% from $1.31 in FY24 to $1.37 in FY25[8, 57] - Group revenue increased by 39% from $314.4 million in FY24 to $437.3 million in FY25[53] Operational Highlights - 2,768 lots were sold in FY25[10] - 2,642 lots were settled in FY25[12] - Contracts on hand value reached $612 million[13] - The company's gearing was 27.5% at 30 June 2025[8] Strategic Initiatives - A strategic review has commenced to ensure the business is optimally positioned to capitalize on favorable market dynamics[25] - The company aims to unlock short-term and long-term value through the strategic review[27] Land Bank and Future Projects - The company has a pipeline of 30,785 lots with an end value of $13.2 billion[33] - The company plans to launch new projects in FY26 and FY27, including communities and townhouse/apartment sites, with a total GDV of $3.928 billion across 5,944 lots/units[89]

Core Insights - Pilgrim's Pride Corporation has significantly increased its focus on e-commerce, with digitally enabled sales rising over 26% year over year in Q2 2025 [1][10] - The company's flagship brands, Just Bare and Pilgrim's, are key contributors to its growth, with Just Bare capturing over 10% market share in fully cooked chicken [2][10] - Pilgrim's Pride is aligning its strategies with modern consumer buying habits by enhancing product visibility through partnerships with leading retailers and food service providers [3][10] Industry Trends - The online grocery market continues to expand, particularly in fresh and prepared food categories, which positions Pilgrim's Pride to benefit from the shift in consumer protein purchases to online channels [4] - The company's digital marketing efforts and brand strength are indicative of a modern approach to business growth beyond traditional sales channels [3] Financial Performance - Pilgrim's Pride shares have gained 10.6% in the past month, outperforming the industry growth of 2.9% and the broader Consumer Staples sector's growth of 0.4% [5] - The stock currently trades at a forward 12-month P/E ratio of 10.08, which is below the industry average of 12.53 and the sector average of 17.22, indicating a modest discount relative to peers [8]

Financial Performance - Pilgrim's Pride reported non-GAAP EPS of $1.70, exceeding the consensus estimate of $1.57, and GAAP revenue of $4.76 billion, surpassing estimates of $4.62 billion, marking a 4.3% increase from $4.56 billion in Q2 FY2024 [1][2] - Adjusted EBITDA reached $687 million, with a stable margin of 14.4%, while GAAP operating income increased by 16.2% to $512.3 million compared to the previous year [8][10] - A special dividend of $500 million was approved, reflecting strong liquidity and financial flexibility, with net leverage remaining under one times adjusted EBITDA [10][16] Business Overview - Pilgrim's Pride is a leading global poultry company, focusing on fresh, value-added, and prepared chicken products across the U.S., Europe, Mexico, and over 120 export markets [3] - The company employs approximately 62,200 people and operates 49 hatcheries, 35 feed mills, 39 processing plants, and 29 distribution centers [3] Operational Highlights - The U.S. segment saw GAAP net sales rise by 5.9% to $2.82 billion, with operating income increasing by 15.3% to $354.99 million [5] - Prepared Foods category experienced over 20% sales growth, with the Just Bare brand achieving over 10% market share in fully cooked chicken [5][11] - In Europe, GAAP revenue improved by 5.4% to $1.37 billion, with operating income margin expanding from 4.7% to 5.4% [6][12] - Mexico faced challenges with a revenue decline of 4.7% to $565.7 million, attributed to currency headwinds and tough year-ago comparisons, although chicken volumes shipped increased by over 5% [7][13] Strategic Focus - Recent strategies emphasize product and geographic diversification, margin improvement, and operational efficiency [4] - The company maintains control over costs, particularly feed, and focuses on expanding sales of higher-margin prepared foods [4][14] - Vertical integration remains a key feature, allowing the company to manage costs and respond to consumer and regulatory changes effectively [14] Future Outlook - Management reiterated a focus on capital discipline and long-term investment in high-growth prepared foods and international markets, with capital spending targeted at $750 million for FY2025 [15] - No formal new financial guidance was issued, but ongoing monitoring of commodity costs and market conditions in Mexico is advised [16]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported net revenues of $4.8 billion, a 4.3% increase compared to the same quarter last year [5] - Adjusted EBITDA was $687 million, up 4.7% versus 2024, with an adjusted EBITDA margin of 14.4%, consistent with the previous year [5][31] - U.S. net revenues increased nearly 6% to $2.82 billion, with adjusted EBITDA of $482.7 million, reflecting strong profitability improvements [32][33] Business Line Data and Key Metrics Changes - The U.S. diversified fresh portfolio benefited from favorable commodity values and strong customer demand, leading to growth in branded offerings [6] - Prepared foods saw a significant growth of 20% in net sales compared to last year, driven by increased distribution and consumer interest [17][18] - The Big Bird segment maintained favorable cutout values despite volatility, with profitability significantly improved year over year [16] Market Data and Key Metrics Changes - In the U.S., ready-to-cook chicken production grew by 1.9% compared to 2024, with USDA estimating a 1.5% growth for 2025 [7][8] - Retail chicken demand increased as consumers sought affordability, with chicken gaining market share in both retail and food service [10][56] - In Europe, chicken remained the fastest-growing category, although overall demand was impacted by rising living costs [19][68] Company Strategy and Development Direction - The company announced a $400 million investment to build a new fully cooked prepared food plant in Georgia, aimed at capitalizing on long-term growth trends [25][39] - The focus remains on portfolio diversification, operational excellence, and enhancing relationships with key customers [22][41] - The company is committed to expanding its prepared foods and branded offerings, particularly in the no antibiotics ever (NAE) segment [49][101] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains challenging due to inflation and consumer spending concerns, but demand for chicken is expected to remain strong [14][56] - The company anticipates continued growth in the prepared foods segment, supported by strong consumer interest and innovative product offerings [26][39] - Management expressed confidence in meeting growing demand while managing production constraints effectively [76][82] Other Important Information - A special dividend of approximately $500 million was declared, reflecting the company's strong cash flow and balance sheet [7][38] - The company is navigating labor market challenges by overstaffing plants to ensure operational efficiency [88][90] - The effective tax rate for the quarter was 25.1%, with expectations for the full year to approximate 25% [36] Q&A Session Summary Question: Clarification on the $400 million investment in Georgia - The majority of the $400 million will be spent in 2026, with an estimated $50 million to $70 million in 2025 [46][47] Question: Supply versus demand dynamics in the chicken market - Management indicated that while supply is increasing, demand remains strong, particularly in the retail sector [52][56] Question: Update on industry production constraints - The industry is focusing on improving hatchability and productivity to meet demand, with challenges still present [62][63] Question: Margin progression in Europe - Management expects seasonal improvements in margins, with Q4 typically being the strongest [70][68] Question: Profitability outlook in Mexico - The Mexican market remains stable with double-digit growth, despite currency volatility impacting revenue [108]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported net revenues of $4.8 billion, a 4.3% increase compared to the same quarter last year [5] - Adjusted EBITDA was $687 million, up 4.7% versus 2024, with an adjusted EBITDA margin of 14.4%, consistent with the previous year [5][32] - U.S. net revenues increased nearly 6% to $2.82 billion, with adjusted EBITDA of $482.7 million, reflecting strong profitability improvements [33][34] Business Line Data and Key Metrics Changes - The U.S. diversified fresh portfolio benefited from favorable commodity prices and strong customer demand, leading to growth in branded offerings [6][7] - Prepared foods saw significant growth, with net sales increasing by 20% compared to last year, driven by strong performance in the Just Bare brand [18][19] - In Europe, adjusted EBITDA margins improved to 8.2% from 7.4% year-over-year, supported by operational improvements and innovative offerings [33] Market Data and Key Metrics Changes - The USDA indicated a 1.9% increase in ready-to-cook chicken production in the U.S. compared to 2024, with expectations of 1.5% growth in 2025 [7][8] - Retail chicken demand is increasing, with both tenders and wings gaining traction, while food service restaurants are seeing a shift towards value offerings [10][11] - In Mexico, net sales increased in double digits, driven by strong demand in the food service rotisserie channel [23][24] Company Strategy and Development Direction - The company announced a $400 million investment to build a new fully cooked prepared food plant in Georgia, expected to enhance long-term growth trends [25][41] - The focus remains on portfolio diversification, operational excellence, and strengthening key customer relationships through innovative product development [20][23] - The company aims to reduce reliance on outside suppliers and leverage fresh production capabilities to drive growth and enhance margins [28][30] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains favorable, with strong demand for chicken and improvements in supply visibility [56][57] - The company anticipates continued growth in the prepared foods segment, supported by consumer interest in higher attributed differentiated offerings [27][29] - Management expressed confidence in maintaining profitability despite challenges in the pricing environment for certain products [34][36] Other Important Information - The company declared a special dividend of approximately $500 million, reflecting strong cash flow and a commitment to shareholder value [7][40] - Legal settlement expenses of $58 million were incurred during the quarter, primarily related to ongoing litigation [36] - The effective tax rate for the quarter was 25.1%, with expectations for the full year to approximate 25% [38] Q&A Session Summary Question: Clarification on the $400 million investment in Georgia - Management indicated that the bulk of the investment will occur in 2026, with a range of $50 million to $70 million expected this year [49] Question: Supply and demand dynamics in the chicken market - Management noted that while supply visibility is improving, hatchability issues persist, impacting overall production [54][56] Question: Update on industry production constraints - Management highlighted that the industry is focusing on improving productivity and addressing hatchery bottlenecks to meet demand [62] Question: Profitability outlook in Mexico - Management acknowledged volatility in the Mexican market but emphasized stable year-over-year performance driven by economic growth [107]

▪ Statements contained in this press release that state the intentions, plans, hopes, beliefs, anticipations, expectations or predictions of the future of Pilgrim's Pride Corporation and its management are considered forward-looking statements. Without limiting the foregoing, words such as "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "should," "targets," "will" and the negative thereof and similar words and expressions are intended to identify forward-looking sta ...