Group 1 - Consumer behavior is shifting as individuals seek to cut costs, leading to an increase in car payment delinquencies and rising credit card delinquencies [1] - Despite relatively stable inflation, these financial challenges are becoming more pronounced [1] - Observing megatrends can provide insights into societal advancements and potential investment opportunities, although identifying the right companies to capitalize on these trends is complex [1] Group 2 - The focus on fundamentals, quality of leadership, and product pipeline is essential for uncovering investment opportunities [1] - Recent emphasis has been placed on marketing and business strategy for medium-sized companies and startups [1] - Experience includes evaluating startups and emerging industries/technologies, indicating a strong background in assessing growth potential [1]

Core Insights - Pilgrim's Pride Corporation (PPC) is currently trading at a forward 12-month price-to-earnings ratio of 9.84X, which is below the industry average of 12.55X and the S&P 500's average of 21.49X, indicating it may be undervalued [1] - The company reported first-quarter 2025 adjusted earnings of $1.31 per share, a significant increase from 77 cents in the prior-year quarter, reflecting strong operational performance [5] - PPC's shares have gained 2.3% over the past three months, contrasting with declines in both the industry and the S&P 500 index [4] Financial Performance - In the first quarter of 2025, PPC's cost of sales decreased to $3,908.1 million from $3,978 million in the prior-year quarter, leading to a gross profit increase to $554.9 million from $383.9 million [7] - The Zacks Consensus Estimate for PPC's earnings per share has seen upward revisions, with the current fiscal estimate rising by 13 cents to $5.41 and the next fiscal estimate increasing by 25 cents to $4.82 [11] Growth Strategy - PPC is well-positioned for growth due to strong consumer demand for chicken, strategic market positioning, and enhanced operational efficiencies [5] - The USDA projects a 1.7% year-over-year increase in U.S. chicken production for 2025, which, along with a 1.6% rise in overall protein availability, supports strong pricing for PPC's products [6] - The company introduced over 80 new products in the first quarter of 2025, with combined sales of the Just BARE and Pilgrim's brands surging more than 50% [8] Challenges - PPC faces challenges in its export business, with a decline in export volumes in the first quarter of 2025 due to trade uncertainties and domestic demand constraints [12] - Selling, general and administrative expenses (SG&A) increased to $133.8 million from $119.1 million in the prior-year quarter, primarily due to higher legal costs and elevated incentive compensation [13]

Core Insights - Pilgrim's Pride Corporation (PPC) reported a strong performance in Q1 2025, with both revenue and earnings increasing compared to the previous year, and earnings exceeding the Zacks Consensus Estimate [1][2] Financial Performance - Adjusted earnings per share were $1.31, up from $0.77 in the same quarter last year, and surpassed the Zacks Consensus Estimate of $1.26 [2] - Net sales reached $4,463 million, reflecting a 2.3% increase from the prior year [2] - Cost of sales decreased to $3,908.1 million from $3,978 million, leading to a gross profit increase to $554.9 million from $383.9 million [3] - Adjusted EBITDA rose to $533.2 million from $371.9 million, with an adjusted EBITDA margin expanding by 350 basis points to 12% [3] - Operating income increased to $404.5 million from $250.3 million year over year [3] Segment Analysis - U.S. operations generated net sales of $2,743.2 million, up from $2,579.3 million, benefiting from seasonal strength in commodity prices and production efficiencies [4] - The Case Ready and Small Bird segments experienced volume growth due to expanded distribution with key customers [5] - European operations saw a decline in net sales to $1,231.5 million from $1,267.9 million, but achieved an adjusted EBITDA margin of 8.1%, improving by over 150 basis points [6] - Mexico operations reported net sales of $488.3 million, down from $514.7 million, but improved profitability through stronger customer partnerships and favorable pricing [7] Financial Health - The company ended the quarter with cash and cash equivalents of $2,066.8 million and long-term debt of $3,199.7 million [8] - Cash from operating activities for the quarter was $126.9 million [8] - PPC's stock has gained 14.2% over the past three months, outperforming the industry growth of 3.3% [8]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported net revenues of $4.5 billion, a 2.3% increase year-over-year [5][29] - Adjusted EBITDA was $533 million, up 62% compared to Q1 2024, with an adjusted EBITDA margin of 12% compared to 8.5% last year [5][29] - U.S. net revenues increased by 6.2% to $2.74 billion, with adjusted EBITDA of $392.5 million, significantly up from $242.9 million in Q1 2024 [29][31] Business Line Data and Key Metrics Changes - The Big Bird segment benefited from improved commodity values and production efficiencies, leading to strong profitability growth [6][19] - The case ready and prepared foods segments saw increased distribution and profitability improvements, with prepared foods growing over 20% year-over-year [21][31] - In Europe, adjusted EBITDA was $99.5 million, up from $81.5 million in Q1 2024, driven by structural reorganization and customer partnerships [32][22] Market Data and Key Metrics Changes - U.S. chicken production grew by 1.1% year-over-year, with USDA projecting a 1.7% growth for 2025 [8][9] - Retail demand for chicken, particularly boneless skinless breast and dark meat, showed strong growth, while food service traffic declined [10][45] - In Mexico, sales to key customers increased by 11%, with branded portfolio sales growing by 15% year-over-year [25][26] Company Strategy and Development Direction - The company is focused on diversifying its portfolio and expanding capacity in fresh and prepared foods, with ongoing investments in Mexico [7][27] - Sustainability efforts are being emphasized, with operational efficiencies aimed at reducing greenhouse gas emissions [28] - The company plans to continue investing in growth projects while maintaining financial discipline [35][36] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer concerns about inflation are shifting spending from food service to retail, impacting demand dynamics [44][45] - The company anticipates continued growth in the U.S. market, particularly in retail, despite challenges in production due to respiratory diseases [66][81] - In Mexico, the company is optimistic about growth prospects, driven by increasing consumer spending and expansion of operations [58][59] Other Important Information - The company incurred $16.6 million in restructuring charges during the quarter as part of its integration program [32] - The effective tax rate for the quarter was 24.1%, with expectations for a full-year rate of approximately 25% [33] - The company maintains a strong liquidity position with over $1.6 billion in cash and available credit, allowing for flexibility in growth opportunities [34][35] Q&A Session Summary Question: Can you elaborate on the lower level of CapEx in Q1? - Management indicated that the lower CapEx was timing-related, with expectations for a ramp-up in capital spending in the coming quarters [41][42] Question: Have you seen any consumer softness affecting pricing? - Management noted a shift from food service to retail due to consumer concerns about high prices, leading to strong demand in retail [44][45] Question: What is the outlook for the EU and UK business margins? - Management expects continued margin expansion due to integration benefits and improving consumer confidence in Europe [51][54] Question: How do you view the market dynamics in Mexico? - Management expressed optimism about growth in Mexico, despite FX impacts, and highlighted ongoing expansion efforts [56][59] Question: What are the expectations for U.S. volume growth? - Management anticipates meaningful volume growth in the U.S., supported by improved live operations and retail demand [66][68] Question: Can you discuss the challenges related to mortality and diseases? - Management explained that higher mortality rates are linked to both diseases and genetics, with ongoing efforts to improve management practices [94][96]

Financial Data and Key Metrics Changes - For Q1 2025, net revenues were $4.5 billion, a 2.3% increase year-over-year. Adjusted EBITDA was $533 million, up 62% compared to Q1 2024, with an adjusted EBITDA margin of 12% compared to 8.5% last year [6][31][36] - U.S. net revenues increased by 6.2% to $2.74 billion, with adjusted EBITDA rising to $392.5 million from $242.9 million in Q1 2024 [31][33] - European EBITDA margins improved to 8.1% from 6.4% year-over-year, while Mexico's EBITDA margins decreased to 8.4% from 9.2% [32][35] Business Line Data and Key Metrics Changes - The Big Bird segment benefited from improved commodity values and production efficiencies, leading to significant profitability growth [7][21] - Prepared foods grew over 20% year-over-year, driven by increased distribution across retail and food service [22] - Sales of core branded offerings rose over 50%, with notable growth in the Just Bare and Pilgrim's brands [22][24] Market Data and Key Metrics Changes - U.S. chicken production grew by 1.1% year-over-year, with USDA projecting a 1.7% growth for 2025 [10][11] - Retail demand for chicken increased, particularly for boneless skinless breasts and dark meat, with double-digit growth noted in the dark meat category [12][48] - Export volumes were impacted by winter weather disruptions and increased domestic demand, but pricing momentum is expected to strengthen in Q2 [13][16] Company Strategy and Development Direction - The company is focused on diversifying its portfolio and expanding capacity in fresh and prepared foods, with ongoing investments in Mexico and the U.S. [9][29] - Sustainability initiatives are being prioritized, with efforts to reduce greenhouse gas emissions and enhance climate resiliency [30] - The company aims to maintain operational excellence and drive differentiation through quality and service for key customers [20][21] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer concerns about inflation are shifting spending from food service to retail, leading to strong demand in the retail segment [47][50] - The company anticipates continued growth in Mexico, supported by expanding operations and increasing consumer spending [60][64] - Challenges remain in the U.S. market due to respiratory diseases affecting production, but improvements in live operations are expected to support volume growth [70][85] Other Important Information - The company reported a strong liquidity position with over $1.6 billion in cash and available credit, even after a $1.5 billion special dividend [36][37] - Capital expenditures for the year are estimated at approximately $750 million, with a focus on disciplined investment in high-return projects [40][96] Q&A Session Summary Question: Can you elaborate on the lower level of CapEx in Q1? - Management indicated that the lower CapEx was timing-related, with expectations for a ramp-up in capital spending in the coming quarters [42][43] Question: Are there any impacts from consumer softness or geopolitical issues? - Management noted a shift from food service to retail due to consumer concerns about high prices and inflation, which is positively impacting chicken demand [46][50] Question: What is the outlook for the EU and UK business margins? - Management expects continued margin expansion due to operational integration and improved consumer confidence in Europe [55][57] Question: How is the company addressing mortality issues in production? - Management explained that higher mortality rates are linked to diseases and genetics, with ongoing efforts to improve management practices [98][100] Question: What is the strategy for working capital and bond purchases? - Management acknowledged that working capital changes are typically negative in Q1 but anticipate a turnaround, while bond purchases were opportunistic [104][106]

Financial Performance - Net Revenue increased to $4463 million in Q1 2025 from $43619 million in Q1 2024[4], a 23% increase - Gross Profit increased significantly from $3839 million in Q1 2024 to $5549 million in Q1 2025[4] - Operating Income rose to $4045 million in Q1 2025, compared to $2503 million in Q1 2024[4] - Net Income increased from $1749 million in Q1 2024 to $2963 million in Q1 2025[4] - Adjusted EBITDA increased year-over-year, reaching $5332 million compared to $3718 million[4] - Adjusted EBITDA Margin improved to 120% in Q1 2025 from 85% in Q1 2024[4] Segment Performance - U S operations reported Net Revenue of $27432 million and Adjusted Operating Income of $3261 million, with an Adjusted Operating Income Margin of 119%[5] - Europe operations recorded Net Revenue of $12315 million and Adjusted Operating Income of $657 million, with an Adjusted Operating Income Margin of 53%[5] - Mexico operations showed Net Revenue of $4883 million and Adjusted Operating Income of $366 million, resulting in an Adjusted Operating Income Margin of 75%[5] Production and Inventory - Pullet placements increased by 07% year-over-year in Q1 2025[7] - Total chicken inventories decreased by 12% year-over-year, and were 49% below the 5-year average[24]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents Pilgrim's Pride Corporation's unaudited condensed consolidated financial statements and detailed notes for Q1 2025 [Item 1. Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) Provides Pilgrim's Pride Corporation's unaudited condensed consolidated financial statements and detailed notes for Q1 2025 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, for Q1 2025 Condensed Consolidated Balance Sheets (March 30, 2025 vs. December 29, 2024) | Indicator | March 30, 2025 (In thousands) | December 29, 2024 (In thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | $10,963,759 | $10,650,576 | 2.9% | | Total Liabilities | $7,816,312 | $6,397,180 | 22.2% | | Total Stockholders' Equity | $3,147,447 | $4,253,396 | -26.0% | | Current Liabilities | $3,989,749 | $2,552,133 | 56.3% | - The significant increase in **Total Liabilities** and **Current Liabilities** is primarily driven by the declaration of a special cash dividend, resulting in **$1,495,382 thousand** in dividends payable[10](index=10&type=chunk) [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Details the company's revenues, expenses, and net income for Q1 2025 and comparative periods Condensed Consolidated Statements of Income (Three Months Ended March 30, 2025 vs. March 31, 2024) | Indicator | March 30, 2025 (In thousands) | March 31, 2024 (In thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Net sales | $4,463,009 | $4,361,934 | 2.3% | | Gross profit | $554,873 | $383,909 | 44.5% | | Operating income | $404,482 | $250,274 | 61.6% | | Net income attributable to Pilgrim's Pride Corporation | $296,033 | $174,421 | 69.7% | | Diluted EPS | $1.24 | $0.73 | 69.9% | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Reports net income and other comprehensive income components for Q1 2025 and comparative periods Condensed Consolidated Statements of Comprehensive Income (Three Months Ended March 30, 2025 vs. March 31, 2024) | Indicator | March 30, 2025 (In thousands) | March 31, 2024 (In thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Net income | $296,343 | $174,938 | 69.4% | | Total other comprehensive income (loss), net of tax | $86,067 | $(29,881) | N/A | | Comprehensive income attributable to Pilgrim's Pride Corporation | $382,100 | $144,540 | 164.4% | - The significant increase in total other comprehensive income (loss) is primarily due to **foreign currency translation gains of $84,972 thousand** in Q1 2025, compared to losses of **$(32,490) thousand** in Q1 2024[13](index=13&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Outlines changes in stockholders' equity, including retained earnings and comprehensive loss, for the period Condensed Consolidated Statements of Stockholders' Equity (March 30, 2025 vs. December 29, 2024) | Indicator | December 29, 2024 (In thousands) | March 30, 2025 (In thousands) | Change (In thousands) | | :--- | :--- | :--- | :--- | | Retained Earnings | $3,157,511 | $1,958,162 | $(1,199,349) | | Accumulated Other Comprehensive Loss | $(370,300) | $(284,233) | $86,067 | | Total Stockholders' Equity | $4,253,396 | $3,147,447 | $(1,105,949) | - **Total Stockholders' Equity** decreased significantly, primarily due to a **special cash dividend of $1,495,382 thousand** paid from retained earnings[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash flows from operating, investing, and financing activities for Q1 2025 Condensed Consolidated Statements of Cash Flows (Three Months Ended March 30, 2025 vs. March 31, 2024) | Cash Flow Activity | March 30, 2025 (In thousands) | March 31, 2024 (In thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cash provided by operating activities | $126,891 | $271,027 | -53.2% | | Cash used in investing activities | $(97,089) | $(106,212) | 8.6% | | Cash provided by (used in) financing activities | $(3,553) | $1,256 | N/A | | Increase in cash, cash equivalents, restricted cash and restricted cash equivalents | $34,309 | $163,660 | -79.0% | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations of significant accounting policies and financial statement line items [1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=Note%201.%20BUSINESS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Describes company operations, geographic presence, ownership, and key accounting policy changes - Pilgrim's Pride Corporation is a major food company operating in the U.S., U.K., Mexico, France, Puerto Rico, Netherlands, and Republic of Ireland, primarily producing chicken, with pork and lamb operations in the U.K[21](index=21&type=chunk) - JBS S.A. beneficially owned **82.3%** of the Company's outstanding common stock as of March 30, 2025[21](index=21&type=chunk) - The Company changed the functional currency of its Mexico operations from U.S. dollar to Mexican peso on April 1, 2024, due to the sustained strengthening of the Mexican peso and a shift in proportional spend, which did not have a material impact on consolidated financial statements[26](index=26&type=chunk)[27](index=27&type=chunk) [2. REVENUE RECOGNITION](index=9&type=section&id=Note%202.%20REVENUE%20RECOGNITION) Explains revenue recognition policies, including control transfer timing and disaggregated revenue data - Revenue is recognized when control of products transfers to the customer, typically upon destination or customer pick-up, with performance obligations usually fulfilled within days to weeks of order acceptance[33](index=33&type=chunk) Disaggregated Revenue by Geographic Region and Product Type (Three Months Ended March 30, 2025) | Region | Fresh (In thousands) | Prepared (In thousands) | Export (In thousands) | Other (In thousands) | Total (In thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | U.S. | $2,214,885 | $323,909 | $109,165 | $95,230 | $2,743,189 | | Europe | $322,054 | $758,678 | $123,861 | $26,936 | $1,231,529 | | Mexico | $411,895 | $50,415 | $— | $25,981 | $488,291 | | **Total net sales** | **$2,948,834** | **$1,133,002** | **$233,026** | **$148,147** | **$4,463,009** | Revenue Contract Liabilities (December 29, 2024 vs. March 30, 2025) | Indicator | Amount (In thousands) | | :--- | :--- | | Balance as of December 29, 2024 | $48,898 | | Revenue recognized | $(40,671) | | Cash received, excluding amounts recognized as revenue during the period | $34,193 | | Effect of exchange rates | $(8) | | Balance as of March 30, 2025 | $42,412 | [3. DERIVATIVE FINANCIAL INSTRUMENTS](index=11&type=section&id=Note%203.%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS) Details the company's use of derivative instruments to manage commodity price and foreign currency risks - The Company uses exchange-traded futures and options to mitigate price risk for commodity inputs (corn, soybean meal, wheat, natural gas, etc.) and foreign currency forward contracts to manage foreign exchange risk in its international operations[42](index=42&type=chunk)[43](index=43&type=chunk) Fair Values of Derivative Instruments (March 30, 2025 vs. December 29, 2024) | Instrument Type | March 30, 2025 (In thousands) | December 29, 2024 (In thousands) | | :--- | :--- | :--- | | Commodity derivative assets | $5,552 | $6,598 | | Commodity derivative liabilities | $(11,912) | $(2,494) | | Foreign currency derivative assets | $1,246 | $755 | | Foreign currency derivative liabilities | $(237) | $(1,397) | | Sales contract derivative assets | $1,652 | $— | | Sales contract derivative liabilities | $— | $(778) | | Cash collateral posted with brokers | $10,685 | $2,324 | Gains and Losses from Undesignated Derivative Instruments (Three Months Ended March 30, 2025 vs. March 31, 2024) | Contract Type | March 30, 2025 (In thousands) | March 31, 2024 (In thousands) | Affected Line Item | | :--- | :--- | :--- | :--- | | Commodity derivatives | $(7,185) | $(10,048) | Cost of sales | | Sales contract derivatives | $2,430 | $2,095 | Net sales | | **Total** | **$(4,755)** | **$(7,953)** | | [4. TRADE ACCOUNTS AND OTHER RECEIVABLES](index=14&type=section&id=Note%204.%20TRADE%20ACCOUNTS%20AND%20OTHER%20RECEIVABLES) Provides a breakdown of trade accounts and other receivables, including allowance for credit losses Trade Accounts and Other Receivables (March 30, 2025 vs. December 29, 2024) | Indicator | March 30, 2025 (In thousands) | December 29, 2024 (In thousands) | | :--- | :--- | :--- | | Trade accounts receivable | $1,081,950 | $973,820 | | Receivables, net | $1,105,991 | $1,004,334 | | Allowance for credit losses | $(8,448) | $(8,474) | - The Company may sell eligible trade receivables under an uncommitted facility with a maximum capacity of **$415.0 million**, with transfers recorded as sales[54](index=54&type=chunk) [5. INVENTORIES](index=14&type=section&id=Note%205.%20INVENTORIES) Presents the composition of inventories, including raw materials, finished products, and operating supplies Inventories (March 30, 2025 vs. December 29, 2024) | Inventory Type | March 30, 2025 (In thousands) | December 29, 2024 (In thousands) | | :--- | :--- | :--- | | Raw materials and work-in-process | $1,128,190 | $1,069,170 | | Finished products | $538,784 | $527,364 | | Operating supplies | $75,339 | $77,146 | | Maintenance materials and parts | $113,992 | $109,808 | | **Total inventories** | **$1,856,305** | **$1,783,488** | [6. INVESTMENTS IN SECURITIES](index=14&type=section&id=Note%206.%20INVESTMENTS%20IN%20SECURITIES) Details the company's available-for-sale securities and related interest income Investments in Available-for-Sale Securities (March 30, 2025 vs. December 29, 2024) | Security Type | March 30, 2025 Fair Value (In thousands) | December 29, 2024 Fair Value (In thousands) | | :--- | :--- | :--- | | Fixed income securities (Cash equivalents) | $1,812,058 | $1,702,697 | | Fixed income securities (Short-term investments) | $— | $10,220 | - Interest income from available-for-sale securities totaled **$23.6 million** for the three months ended March 30, 2025[57](index=57&type=chunk) [7. GOODWILL AND INTANGIBLE ASSETS](index=15&type=section&id=Note%207.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Provides a breakdown of goodwill by segment and intangible assets, net of amortization Goodwill by Segment (March 30, 2025 vs. December 29, 2024) | Segment | December 29, 2024 (In thousands) | Currency Translation (In thousands) | March 30, 2025 (In thousands) | | :--- | :--- | :--- | :--- | | U.S. | $41,936 | $— | $41,936 | | Europe | $1,097,643 | $32,822 | $1,130,465 | | Mexico | $99,494 | $(205) | $99,289 | | **Total** | **$1,239,073** | **$32,617** | **$1,271,690** | Intangible Assets, Net (March 30, 2025 vs. December 29, 2024) | Indicator | December 29, 2024 (In thousands) | Amortization (In thousands) | Currency Translation (In thousands) | March 30, 2025 (In thousands) | | :--- | :--- | :--- | :--- | :--- | | Intangible assets, net | $806,234 | $(7,990) | $22,031 | $820,275 | [8. PROPERTY, PLANT AND EQUIPMENT](index=16&type=section&id=Note%208.%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) Details property, plant, and equipment, including depreciation and capital expenditures Property, Plant and Equipment, Net (March 30, 2025 vs. December 29, 2024) | Indicator | March 30, 2025 (In thousands) | December 29, 2024 (In thousands) | | :--- | :--- | :--- | | PP&E, gross | $7,238,160 | $7,094,938 | | Accumulated depreciation | $(4,076,846) | $(3,957,047) | | **PP&E, net** | **$3,161,314** | **$3,137,891** | - Depreciation expense was **$96.5 million** for the three months ended March 30, 2025, and the Company incurred **$98.8 million** on capital projects during the same period[59](index=59&type=chunk)[60](index=60&type=chunk) - An additional impairment loss of **$0.6 million** on PP&E was recognized due to restructuring activities in the Europe reportable segment[62](index=62&type=chunk) [9. CURRENT LIABILITIES](index=17&type=section&id=Note%209.%20CURRENT%20LIABILITIES) Presents the composition of current liabilities, including accounts payable and dividends payable Current Liabilities (March 30, 2025 vs. December 29, 2024) | Indicator | March 30, 2025 (In thousands) | December 29, 2024 (In thousands) | | :--- | :--- | :--- | | Total accounts payable | $1,410,879 | $1,411,519 | | Dividends payable | $1,495,382 | $— | | Accrued expenses and other current liabilities | $919,606 | $1,015,504 | | **Total (excluding income taxes and current maturities of long-term debt)** | **$3,895,559** | **$2,491,178** | - The substantial increase in current liabilities is primarily due to the **$1.5 billion special cash dividend** declared, creating a significant 'Dividends payable' balance[64](index=64&type=chunk) [10. SUPPLIER FINANCE PROGRAMS](index=17&type=section&id=Note%2010.%20SUPPLIER%20FINANCE%20PROGRAMS) Discusses the outstanding balance of confirmed invoices under supplier finance programs Outstanding Balance of Confirmed Invoices (March 30, 2025 vs. December 29, 2024) | Indicator | March 30, 2025 (In millions) | December 29, 2024 (In millions) | | :--- | :--- | :--- | | Outstanding balance of confirmed invoices | $202.8 | $152.8 | - The outstanding balance of confirmed invoices under supplier finance programs increased by **$50.0 million**, and these balances are included in Accounts Payable[65](index=65&type=chunk) [11. INCOME TAXES](index=18&type=section&id=Note%2011.%20INCOME%20TAXES) Provides details on income tax expense, effective tax rate, and tax sharing agreements Income Tax Expense and Effective Tax Rate (Three Months Ended March 30, 2025 vs. March 31, 2024) | Indicator | March 30, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Income tax expense | $94.1 million | $52.1 million | | Effective tax rate | 24.1% | 22.9% | - The increased income tax expense in 2025 resulted primarily from the increase of profit before income taxes[67](index=67&type=chunk) - The Company entered into a tax sharing agreement with JBS USA effective December 30, 2024, and is monitoring Pillar II legislation but has not yet accrued any top-up taxes[71](index=71&type=chunk)[72](index=72&type=chunk) [12. DEBT](index=18&type=section&id=Note%2012.%20DEBT) Outlines the company's long-term debt, including senior notes and available borrowing capacity Long-Term Debt (March 30, 2025 vs. December 29, 2024) | Debt Type | March 30, 2025 (In thousands) | December 29, 2024 (In thousands) | | :--- | :--- | :--- | | Senior notes payable, net of discount, at 6.875% | $491,560 | $491,329 | | Senior notes payable, net of discount, at 6.25% | $972,976 | $974,381 | | Senior notes payable at 3.50% | $900,000 | $900,000 | | Senior notes payable, net of discount, at 4.25% | $848,568 | $850,342 | | Long-term debt, less current maturities, net of capitalized financing costs | $3,199,746 | $3,206,113 | - The Board approved a bond repurchase program on May 1, 2024, authorizing repurchases up to **$200.0 million** of outstanding senior notes[74](index=74&type=chunk) - To date, **$146.3 million** of Senior Notes due 2031 and **$21.6 million** of Senior Notes due 2033 have been repurchased[74](index=74&type=chunk) Available Borrowing Capacity (March 30, 2025) | Credit Facility | Loan Commitment (In millions) | Available (In millions) | | :--- | :--- | :--- | | U.S. Credit Facility | $850.0 | $825.8 | | Europe Credit Facility | $194.1 | $194.1 | | Mexico Credit Facility | $54.0 | $54.0 | [13. STOCKHOLDERS' EQUITY](index=20&type=section&id=Note%2013.%20STOCKHOLDERS%27%20EQUITY) Details changes in stockholders' equity, including accumulated comprehensive loss and special dividends Changes in Accumulated Other Comprehensive Loss (Three Months Ended March 30, 2025 vs. December 29, 2024) | Component | December 29, 2024 (In thousands) | March 30, 2025 (In thousands) | | :--- | :--- | :--- | | Losses Related to Foreign Currency Translation | $(337,243) | $(252,271) | | Losses on Derivative Financial Instruments Classified as Cash Flow Hedges | $(2,007) | $(357) | | Losses Related to Pension and Other Postretirement Benefits | $(31,028) | $(31,564) | | Losses on Available-for-Sale Securities | $(22) | $(41) | | **Total Accumulated Other Comprehensive Loss** | **$(370,300)** | **$(284,233)** | - **Accumulated Other Comprehensive Loss** decreased by **$86.067 million**, primarily due to **foreign currency translation gains of $84.972 million** during the period[80](index=80&type=chunk) - On March 13, 2025, the Company declared a special dividend of **$6.30 per share**, totaling approximately **$1.5 billion**, which was paid on April 17, 2025, using cash on hand[84](index=84&type=chunk) [14. PENSION AND OTHER POSTRETIREMENT BENEFITS](index=21&type=section&id=Note%2014.%20PENSION%20AND%20OTHER%20POSTRETIREMENT%20BENEFITS) Reports net periodic benefit costs, pension plan terminations, and contributions to retirement programs Net Periodic Benefit Costs (Three Months Ended March 30, 2025 vs. March 31, 2024) | Component | March 30, 2025 (In thousands) | March 31, 2024 (In thousands) | | :--- | :--- | :--- | | Pension Benefits Net Costs (income) | $(354) | $19 | | Other Benefits Net Costs (income) | $8 | $9 | | Total expenses recognized under all retirement plans | $9,700 | $11,200 | - During 2024, the Company terminated its two U.S. pension plans, settling obligations amounting to **$99.6 million**[86](index=86&type=chunk) - The Company contributed **$1.0 million** to its pension programs during the three months ended March 30, 2025, and anticipates making additional contributions of approximately **$3.2 million** during the remainder of 2025[89](index=89&type=chunk) [15. FAIR VALUE MEASUREMENT](index=22&type=section&id=Note%2015.%20FAIR%20VALUE%20MEASUREMENT) Presents assets and liabilities measured at fair value, including derivatives and debt obligations Assets and Liabilities Measured at Fair Value on a Recurring Basis (March 30, 2025 vs. December 29, 2024) | Instrument Type | March 30, 2025 (In thousands) | December 29, 2024 (In thousands) | | :--- | :--- | :--- | | Fixed income securities (Level 1) | $1,812,058 | $1,712,917 | | Commodity derivative assets (Level 1) | $5,552 | $6,598 | | Commodity derivative liabilities (Level 1) | $(11,912) | $(2,494) | | Foreign currency derivative assets (Level 1) | $1,246 | $755 | | Foreign currency derivative liabilities (Level 1) | $(237) | $(1,397) | Fair Values of Debt Obligations (March 30, 2025 vs. December 29, 2024) | Debt Type | March 30, 2025 Carrying Amount (In thousands) | March 30, 2025 Fair Value (In thousands) | December 29, 2024 Carrying Amount (In thousands) | December 29, 2024 Fair Value (In thousands) | | :--- | :--- | :--- | :--- | :--- | | Fixed-rate senior notes payable at 3.50% (Level 2) | $(900,000) | $(792,684) | $(900,000) | $(777,033) | | Fixed-rate senior notes payable at 4.25% (Level 2) | $(848,568) | $(804,235) | $(850,342) | $(789,304) | | Fixed-rate senior notes payable at 6.25% (Level 2) | $(972,976) | $(1,015,239) | $(974,381) | $(1,001,178) | | Fixed-rate senior notes payable at 6.875% (Level 2) | $(491,560) | $(538,600) | $(491,329) | $(533,650) | [16. RESTRUCTURING-RELATED ACTIVITIES](index=24&type=section&id=Note%2016.%20RESTRUCTURING-RELATED%20ACTIVITIES) Details restructuring initiatives in Europe, including estimated and incurred costs - The Company is undertaking restructuring initiatives in its Europe reportable segment to integrate central operations and reallocate processing capacities, resulting in facility closures[102](index=102&type=chunk) Estimated and Incurred Restructuring Costs (In thousands) | Cost Type | Total Estimated Costs | Costs Incurred Since Earliest Implementation Date | | :--- | :--- | :--- | | Employee-related costs | $68,962 | $59,904 | | Asset impairment costs | $12,695 | $12,695 | | Contract termination costs | $2,602 | $2,602 | | Other exit and disposal costs | $14,213 | $14,213 | | **Total exit and disposal costs** | **$98,472** | **$89,414** | Restructuring Expenses and Cash Outlays (Three Months Ended March 30, 2025) | Initiative | Expenses (In thousands) | Cash Outlays (In thousands) | | :--- | :--- | :--- | | Pilgrim's Food Masters 2024 | $1,331 | $2,951 | | Pilgrim's Europe Central | $14,655 | $1,813 | | Prior programs substantially complete | $626 | $621 | | **Total** | **$16,612** | **$5,385** | [17. RELATED PARTY TRANSACTIONS](index=26&type=section&id=Note%2017.%20RELATED%20PARTY%20TRANSACTIONS) Reports sales, purchases, and accounts payable with related parties for Q1 2025 Sales to Related Parties (Three Months Ended March 30, 2025 vs. March 31, 2024) | Related Party | March 30, 2025 (In thousands) | March 31, 2024 (In thousands) | | :--- | :--- | :--- | | JBS Toledo N.V. | $10,115 | $— | | JBS USA Food Company | $4,817 | $5,374 | | Other related parties | $293 | $1,757 | | **Total** | **$15,225** | **$7,131** | Cost of Goods Purchased from Related Parties (Three Months Ended March 30, 2025 vs. March 31, 2024) | Related Party | March 30, 2025 (In thousands) | March 31, 2024 (In thousands) | | :--- | :--- | :--- | | JBS USA Food Company | $36,492 | $40,324 | | Seara Meats B.V. | $26,670 | $5,395 | | Penasul UK LTD | $9,658 | $3,530 | | JBS Asia Co Limited | $2,268 | $863 | | Other related parties | $711 | $498 | | **Total** | **$75,799** | **$50,610** | Accounts Payable to Related Parties (March 30, 2025 vs. December 29, 2024) | Related Party | March 30, 2025 (In thousands) | December 29, 2024 (In thousands) | | :--- | :--- | :--- | | Seara Meats B.V. | $19,381 | $4,861 | | JBS USA Food Company | $3,198 | $5,424 | | JBS Asia Co Limited | $2,160 | $4,023 | | Other related parties | $2,541 | $949 | | **Total** | **$27,280** | **$15,257** | [18. REPORTABLE SEGMENTS](index=27&type=section&id=Note%2018.%20REPORTABLE%20SEGMENTS) Provides financial data by segment (U.S., Europe, Mexico), including sales and operating income - The Company operates in three reportable segments: U.S., Europe, and Mexico, with segment profit primarily measured by operating income[113](index=113&type=chunk) Net Sales by Reportable Segment (Three Months Ended March 30, 2025 vs. March 31, 2024) | Segment | March 30, 2025 (In thousands) | March 31, 2024 (In thousands) | Change (%) | | :--- | :--- | :--- | :--- | | U.S. | $2,743,189 | $2,579,332 | 6.4% | | Europe | $1,231,529 | $1,267,903 | -2.9% | | Mexico | $488,291 | $514,699 | -5.1% | | **Total net sales** | **$4,463,009** | **$4,361,934** | **2.3%** | Operating Income by Reportable Segment (Three Months Ended March 30, 2025 vs. March 31, 2024) | Segment | March 30, 2025 (In thousands) | March 31, 2024 (In thousands) | Change (%) | | :--- | :--- | :--- | :--- | | U.S. | $318,806 | $179,417 | 77.7% | | Europe | $49,071 | $31,116 | 57.7% | | Mexico | $36,605 | $39,741 | -7.9% | | **Total operating income** | **$404,482** | **$250,274** | **61.6%** | Capital Expenditures by Reportable Segment (Three Months Ended March 30, 2025 vs. March 31, 2024) | Segment | March 30, 2025 (In thousands) | March 31, 2024 (In thousands) | | :--- | :--- | :--- | | U.S. | $71,927 | $78,631 | | Europe | $21,664 | $17,141 | | Mexico | $5,199 | $3,296 | | **Total capital expenditures** | **$98,790** | **$99,068** | [19. COMMITMENTS AND CONTINGENCIES](index=31&type=section&id=Note%2019.%20COMMITMENTS%20AND%20CONTINGENCIES) Discusses various legal proceedings, claims, and tax assessments, including antitrust litigation - The Company is subject to various legal proceedings and claims, including the 'Broiler Antitrust Litigation,' Hogan v. Pilgrim's Pride Corporation et al., and tax assessments in Mexico and the U.K[127](index=127&type=chunk)[128](index=128&type=chunk) - Motions to dismiss Phase 2 of the Broiler Antitrust Litigation were denied on February 11, 2025, and PPC will seek reasonable settlements[129](index=129&type=chunk) - Expenses incurred to date for this litigation are **$583.8 million**[129](index=129&type=chunk) - A settlement agreement for Hogan v. Pilgrim's Pride Corporation et al. received preliminary court approval on February 5, 2025, with an accrued unpaid expense of **$41.5 million**[130](index=130&type=chunk) - The Mexican Tax Administration Service's tax assessment of approximately **$269.5 million** (including penalties and interest) related to the 2015 acquisition of Tyson de México is under appeal, with no expense recorded yet[131](index=131&type=chunk)[132](index=132&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on the company's financial condition and operational results for Q1 2025 [Executive Summary](index=33&type=section&id=Executive%20Summary) Highlights key financial performance metrics for the three months ended March 30, 2025 - Pilgrim's Pride Corporation reported **net income attributable to Pilgrim's of $296.0 million**, or **$1.24 per diluted common share**, on **net sales of $4.5 billion** for the three months ended March 30, 2025[134](index=134&type=chunk) - The Company generated a consolidated **operating margin of 9.1%** and **Adjusted EBITDA of $533.2 million** for the quarter[134](index=134&type=chunk) [Global Economic Conditions](index=33&type=section&id=Global%20Economic%20Conditions) Discusses global inflation trends and the company's strategies to mitigate economic challenges - Global inflation levels declined in Q1 2025, with U.S. inflation decreasing due to lower gasoline prices and continued decreases in the U.K. and E.U. regions[135](index=135&type=chunk) - Mexico experienced a slight increase in inflation, partially driven by increased food prices, and the peso weakened slightly against the U.S. dollar[135](index=135&type=chunk) - The Company is responding to economic challenges by continuing negotiations with customers to mitigate extraordinary costs and focusing on operational initiatives for labor efficiencies, better agricultural performance, and improved yields[136](index=136&type=chunk) [Raw Materials and Pricing](index=33&type=section&id=Raw%20Materials%20and%20Pricing) Analyzes commodity market prices for chicken, pork, and feed ingredients across key regions - U.S. commodity market prices for chicken products trended above the historical five-year average and prior year average in Q1 2025, primarily driven by rapid increases in boneless breast pricing[138](index=138&type=chunk) - U.S. estimated industry ready-to-cook production increased **1.1% year-over-year**, supported by firm volume demand in retail and steady foodservice channels[138](index=138&type=chunk)[139](index=139&type=chunk) - U.K. chicken market volume was higher, with stable prices due to stable grain prices, despite some production constraints from switching to higher welfare birds[141](index=141&type=chunk) - U.K. pork product prices faced downward pressure due to lower E.U. pork prices, while U.K. pig production rose by approximately **6.4%**[143](index=143&type=chunk)[144](index=144&type=chunk) - Mexico chicken commodity prices decreased in Q1 2025 but remained above prior year averages, while market corn prices were higher year-over-year[142](index=142&type=chunk) [Special Cash Dividend](index=34&type=section&id=Special%20Cash%20Dividend) Reports the declaration and payment of a significant special cash dividend to shareholders - On March 13, 2025, the Company declared a special dividend of **$6.30 per share**, totaling approximately **$1.5 billion**, which was paid on April 17, 2025, using cash on hand[147](index=147&type=chunk) [Reportable Segments](index=34&type=section&id=Reportable%20Segments) Defines the company's operating segments and the allocation of corporate expenses - The Company operates in three reportable segments: U.S., Europe, and Mexico, with segment profit measured as operating income[148](index=148&type=chunk) - Corporate expenses are allocated to Mexico and Europe segments, with remaining amounts allocated to the U.S[148](index=148&type=chunk) [Three Months Ended March 30, 2025 Compared to the Three Months Ended March 31, 2024](index=34&type=section&id=Three%20Months%20Ended%20March%2030%2C%202025%20Compared%20to%20the%20Three%20Months%20Ended%20March%2031%2C%202024) Compares financial performance indicators for the current and prior year's first fiscal quarters [Net sales](index=34&type=section&id=Net%20sales) Analyzes changes in net sales by segment, attributing variations to volume, pricing, and currency Net Sales by Segment (Three Months Ended March 30, 2025 vs. March 31, 2024) | Segment | March 30, 2025 (In thousands) | March 31, 2024 (In thousands) | Change (Amount, In thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | U.S. | $2,743,189 | $2,579,332 | $163,857 | 6.4% | | Europe | $1,231,529 | $1,267,903 | $(36,374) | -2.9% | | Mexico | $488,291 | $514,699 | $(26,408) | -5.1% | | **Total net sales** | **$4,463,009** | **$4,361,934** | **$101,075** | **2.3%** | - U.S. net sales increased primarily due to an increase in net sales per pound (**4.5 percentage points**) driven by favorable market pricing and a shift to higher value products, and an increase in sales volume (**1.9 percentage points**)[150](index=150&type=chunk) - Europe net sales decreased due to lower sales volume (**2.1 percentage points**) and unfavorable foreign currency translation (**0.7 percentage points**)[151](index=151&type=chunk) - Mexico net sales decreased primarily due to unfavorable foreign currency translation (**19.3 percentage points**), partially offset by increased net sales per pound (**13.8 percentage points**)[152](index=152&type=chunk) [Gross profit and cost of sales](index=35&type=section&id=Gross%20profit%20and%20cost%20of%20sales) Examines the drivers of gross profit and cost of sales changes across operating segments Gross Profit and Cost of Sales (Three Months Ended March 30, 2025 vs. March 31, 2024) | Indicator | March 30, 2025 (In thousands) | March 31, 2024 (In thousands) | Change (Amount, In thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross profit | $554,873 | $383,909 | $170,964 | 44.5% | | Gross profit margin | 12.4% | 8.8% | 3.6 pp | N/A | | Cost of sales | $3,908,136 | $3,978,025 | $(69,889) | -1.8% | - U.S. gross profit increased by **$150.3 million (63.4%)** due to increased sales volume and a decrease in cost per pound sold, primarily from declining soybean meal costs[154](index=154&type=chunk) - Europe gross profit increased by **$24.1 million (26.2%)** due to a decrease in cost of sales, driven by lower labor costs, feed ingredients, utilities, and other operating costs, partly from restructuring initiatives[155](index=155&type=chunk) - Mexico gross profit decreased by **$3.5 million (6.4%)** due to unfavorable foreign currency translation, partially offset by an increase in cost per pound sold from higher commodity ingredient prices[156](index=156&type=chunk) [Operating income and SG&A expense](index=36&type=section&id=Operating%20income%20and%20SG%26A%20expense) Discusses changes in operating income and selling, general, and administrative expenses by segment Operating Income and SG&A Expense (Three Months Ended March 30, 2025 vs. March 31, 2024) | Indicator | March 30, 2025 (In thousands) | March 31, 2024 (In thousands) | Change (Amount, In thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Operating income | $404,482 | $250,274 | $154,208 | 61.6% | | SG&A expense | $133,779 | $119,076 | $14,703 | 12.3% | - U.S. operating income increased by **$139.4 million (77.7%)**, while SG&A expense increased by **$10.9 million (18.9%)** due to higher legal settlement, incentive compensation, and legal defense costs[158](index=158&type=chunk) - Europe operating income increased by **$18.0 million (57.7%)**, with SG&A expense increasing by **$4.1 million (8.9%)** due to incentive compensation and software license fees[159](index=159&type=chunk) - Mexico operating income decreased by **$3.1 million (7.9%)**, and SG&A expense decreased by **$0.4 million (2.5%)** due to favorable foreign currency translation, partially offset by increased payroll and marketing costs[160](index=160&type=chunk) [Restructuring activities](index=37&type=section&id=Restructuring%20activities) Reports costs incurred from restructuring initiatives, primarily within the Europe segment - Restructuring activities costs of **$16.6 million** were recognized in the three months ended March 30, 2025, primarily in the Europe reportable segment, due to severance and warehouse closure costs[161](index=161&type=chunk) [Net interest expense](index=37&type=section&id=Net%20interest%20expense) Explains the change in net interest expense, primarily due to increased interest income Net Interest Expense (Three Months Ended March 30, 2025 vs. March 31, 2024) | Indicator | March 30, 2025 (In millions) | March 31, 2024 (In millions) | | :--- | :--- | :--- | | Net interest expense | $16.8 | $30.9 | - The decrease in net interest expense resulted primarily from an increase in interest income on higher cash balances[162](index=162&type=chunk) [Income taxes](index=37&type=section&id=Income%20taxes) Details the increase in income tax expense and the effective tax rate Income Tax Expense and Effective Tax Rate (Three Months Ended March 30, 2025 vs. March 31, 2024) | Indicator | March 30, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Income tax expense | $94.1 million | $52.1 million | | Effective tax rate | 24.1% | 22.9% | - The increase in income tax expense resulted primarily from the increase in profit before income taxes[163](index=163&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet financial obligations and fund operations - The Company expects cash flows from operations, combined with availability under its credit facilities, to provide sufficient liquidity to fund current obligations, working capital, debt maturities, and capital spending for at least the next twelve months[167](index=167&type=chunk) Available Sources of Liquidity (March 30, 2025) | Source | Amount (In millions) | | :--- | :--- | | Cash and cash equivalents | $2,066.8 | | U.S. Credit Facility (available) | $825.8 | | Mexico Credit Facility (available) | $54.0 | | Europe Credit Facility (available) | $194.1 | [Historical Flow of Funds](index=38&type=section&id=Historical%20Flow%20of%20Funds) Reviews cash flows from operating, investing, and financing activities for the period Cash Flows from Operating Activities (Three Months Ended March 30, 2025 vs. March 31, 2024) | Indicator | March 30, 2025 (In millions) | March 31, 2024 (In millions) | | :--- | :--- | :--- | | Net income | $296.3 | $174.9 | | Cash provided by operating activities | $126.9 | $271.0 | Cash Flows from Investing Activities (Three Months Ended March 30, 2025 vs. March 31, 2024) | Indicator | March 30, 2025 (In millions) | March 31, 2024 (In millions) | | :--- | :--- | :--- | | Acquisitions of property, plant and equipment | $(98.3) | $(108.4) | | Cash used in investing activities | $(97.1) | $(106.2) | Cash Flows from Financing Activities (Three Months Ended March 30, 2025 vs. March 31, 2024) | Indicator | March 30, 2025 (In millions) | March 31, 2024 (In millions) | | :--- | :--- | :--- | | Payments on revolving line of credit, long-term borrowings and finance lease obligations | $(3.6) | $(0.1) | | Cash provided by (used in) financing activities | $(3.6) | $1.3 | [Net Noncash Expenses](index=38&type=section&id=Net%20Noncash%20Expenses) Identifies significant noncash expenses, including depreciation, amortization, and deferred income tax benefits - Net noncash expenses were **$103.8 million** for the three months ended March 30, 2025, including **$104.5 million** in depreciation and amortization and an **$11.0 million** deferred income tax benefit[169](index=169&type=chunk) [Changes in Operating Assets and Liabilities](index=38&type=section&id=Changes%20in%20Operating%20Assets%20and%20Liabilities) Explains the impact of changes in working capital components on cash flows - The change in trade accounts and other receivables represented a **$91.5 million** use of cash in Q1 2025, primarily due to an increase in sales from more favorable market pricing and a decrease in the use of the discounted accounts receivable program[171](index=171&type=chunk) - The change in inventories represented a **$64.2 million** use of cash in Q1 2025, primarily from increased input costs and an increase in inventories after higher seasonal sales[172](index=172&type=chunk) - The change in accounts payable, accrued expenses, and other current liabilities represented a **$118.7 million** use of cash in Q1 2025, primarily due to the payment of incentive compensation accrued in 2024[174](index=174&type=chunk) [Long-Term Debt and Other Borrowing Arrangements](index=39&type=section&id=Long-Term%20Debt%20and%20Other%20Borrowing%20Arrangements) Summarizes the company's long-term debt structure and available credit facilities - The Company's long-term debt and other borrowing arrangements consist of senior notes, revolving credit facilities, and other term loan agreements, with further details provided in Note 12. Debt[180](index=180&type=chunk) [Reconciliation of Net Income to EBITDA and Adjusted EBITDA](index=39&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDA%20and%20Adjusted%20EBITDA) Provides a reconciliation of net income to non-GAAP financial measures, EBITDA and Adjusted EBITDA Reconciliation of Net Income to EBITDA and Adjusted EBITDA (Three Months Ended March 30, 2025) | Indicator | Amount (In thousands) | | :--- | :--- | | Net income | $296,343 | | Add: Interest expense, net | $16,785 | | Add: Income tax expense | $94,099 | | Add: Depreciation and amortization | $104,518 | | **EBITDA** | **$511,745** | | Add: Restructuring activities losses | $16,612 | | Add: Litigation settlements | $7,250 | | Minus: Foreign currency transaction gains | $2,053 | | Minus: Net income attributable to noncontrolling interest | $310 | | **Adjusted EBITDA** | **$533,244** | - EBITDA and Adjusted EBITDA are non-GAAP financial measures used by management and investors to compare performance, but they have limitations and should not be considered in isolation or as substitutes for U.S. GAAP results[180](index=180&type=chunk)[181](index=181&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Details the company's exposure to market risks, including commodity prices, foreign currency, and interest rates [Market Risk-Sensitive Instruments and Positions](index=41&type=section&id=Market%20Risk-Sensitive%20Instruments%20and%20Positions) Identifies the company's primary market risks, including commodity prices, foreign currency, and interest rates - The Company's primary market risks are the potential loss arising from adverse changes in commodity prices, foreign currency exchange rates, interest rates, and the credit quality of available-for-sale securities[184](index=184&type=chunk) [Commodity Prices](index=41&type=section&id=Commodity%20Prices) Analyzes the sensitivity of cost of sales and inventories to hypothetical changes in feed ingredient prices - A hypothetical **10% increase** in the weighted-average cost of primary feed ingredients would have increased cost of sales by **$86.2 million** for the three months ended March 30, 2025, and increased inventories by **$17.5 million** as of March 30, 2025[187](index=187&type=chunk)[188](index=188&type=chunk) - A **10% increase** in commodity prices would have resulted in an increase of **$1.9 million** in the fair value of the Company's net commodity derivative asset position[189](index=189&type=chunk) [Interest Rates](index=41&type=section&id=Interest%20Rates) Assesses the impact of hypothetical interest rate changes on the fair value of fixed-rate debt - A hypothetical **10% increase** in interest rates would have decreased the fair value of the Company's fixed-rate debt by **$98.3 million** as of March 30, 2025[190](index=190&type=chunk) [Foreign Currency](index=41&type=section&id=Foreign%20Currency) Evaluates the impact of foreign currency exchange rate fluctuations on net assets and derivative positions - A **10% weakening** in the Mexican peso against the U.S. dollar exchange rate would cause a decrease of **$75.1 million** in the net assets of Mexican subsidiaries, while a **10% strengthening** would cause an increase of **$91.8 million**[192](index=192&type=chunk)[193](index=193&type=chunk) - A **10% weakening** in the British pound against the U.S. dollar exchange rate would cause a decrease of **$76.5 million** in the net assets of Europe subsidiaries, while a **10% strengthening** would cause an increase of **$93.6 million**[195](index=195&type=chunk) - The Company uses foreign currency forward contracts as cash flow hedges for a portion of sales and purchases in its Europe segment, with immaterial changes expected from a **10% currency fluctuation**[196](index=196&type=chunk) [Quality of Investments](index=42&type=section&id=Quality%20of%20Investments) Confirms the credit quality of investment portfolios and the absence of high-risk structured investments - The Company's investment portfolios, including money market funds and commercial paper, have not been downgraded, and it does not hold significant amounts of structured investment vehicles, auction rate securities, collateralized debt obligations, credit derivatives, hedge funds, or perpetual preferred securities[197](index=197&type=chunk) - None of the mortgages collateralizing its mortgage-backed securities are considered subprime[197](index=197&type=chunk) [Impact of Inflation](index=42&type=section&id=Impact%20of%20Inflation) Discusses the ongoing impact of inflation and the company's strategies to mitigate its effects - The U.S., Mexico, and most of Europe continue to experience above-historical inflation, though to a lesser degree than in the prior year[198](index=198&type=chunk) - The Company is responding by negotiating with customers to recoup extraordinary costs and focusing on operational initiatives for labor efficiencies, agricultural performance, and improved yields[198](index=198&type=chunk) [Forward Looking Statements](index=42&type=section&id=Forward%20Looking%20Statements) Highlights the inherent risks and uncertainties associated with forward-looking statements in the report - The report contains forward-looking statements subject to various risks and uncertainties, including fluctuations in commodity prices, ability to maintain critical contracts, retention of key individuals, disease outbreaks, product contamination, regulatory changes, competitive factors, currency exchange rate fluctuations, and the impact of litigation[199](index=199&type=chunk)[202](index=202&type=chunk) - The Company does not undertake any obligation to address or update each or any factor in future filings or communications regarding its business or results[201](index=201&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and reports no material changes in internal control over financial reporting [Disclosure Controls and Procedures](index=44&type=section&id=Disclosure%20Controls%20and%20Procedures) States management's conclusion on the effectiveness of the company's disclosure controls and procedures - As of March 30, 2025, the Company's management, with the participation of the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective[204](index=204&type=chunk) [Changes in Internal Control over Financial Reporting](index=44&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Reports no material changes in internal control over financial reporting and updates on ERP system implementation - No material changes in the Company's internal control over financial reporting occurred during the three months ended March 30, 2025[205](index=205&type=chunk) - The first phase of an enterprise resource planning (ERP) system implementation was completed in 2024, and the second phase was completed on April 21, 2025, with no expected material effects on internal control over financial reporting throughout the remainder of the implementation period[206](index=206&type=chunk) [PART II. OTHER INFORMATION](index=45&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section includes legal proceedings, risk factors, other information, and exhibits for the quarterly report [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 19 of the financial statements for detailed information on legal proceedings and commitments - The information required for legal proceedings is incorporated by reference from Note 19. Commitments and Contingencies, in Part I, Item 1 of this quarterly report[208](index=208&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) Directs readers to the 2024 Annual Report and MD&A for risk factors, noting no material changes - For a discussion of potential risks and uncertainties, refer to 'Part I—Item 1A—Risk Factors' in the 2024 Annual Report and 'Part I—Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations' in this quarterly report[209](index=209&type=chunk) - There have been no material changes to the risk factors previously disclosed in the 2024 Annual Report[209](index=209&type=chunk) [Item 5. Other Information](index=45&type=section&id=Item%205.%20Other%20Information) Confirms no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated - None of the Company's directors or executive officers adopted or terminated a 'Rule 10b5-1 trading arrangement' or a 'non-Rule 10b5-1 trading arrangement' during the fiscal quarter ended March 30, 2025[210](index=210&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) Lists the various exhibits filed with the Form 10-Q, including corporate documents and certifications - The exhibits filed include the Amended and Restated Certificate of Incorporation, Amended and Restated Corporate Bylaws, Tax Sharing Agreement, Certifications of Principal Executive Officer and Principal Financial Officer (pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002), and Inline XBRL documents[211](index=211&type=chunk) [SIGNATURES](index=46&type=section&id=SIGNATURES) Contains the required signatures for the Form 10-Q, confirming its due authorization and filing - The report was signed on April 30, 2025, by Matthew Galvanoni, Chief Financial Officer and Chief Accounting Officer, as the Principal Financial Officer, Principal Accounting Officer, and Authorized Signatory[215](index=215&type=chunk)

(1) Reconciliations for non-U.S. GAAP measures are provided in subsequent sections within this release. Pilgrim's Pride Reports First Quarter 2025 Results with $4.5 Billion in Net Sales and Operating Income of $404.5 Million "While facing volatility during the quarter, we maintained our focus on controlling the controllables and consistent execution of our strategies," said Fabio Sandri, Pilgrim's President and CEO. "We continued to cultivate Key Customer partnerships through differentiated offerings and a ...

GREELEY, Colo., April 30, 2025 (GLOBE NEWSWIRE) -- Pilgrim’s Pride Corporation (NASDAQ: PPC), one of the world's leading food companies, reports its first quarter 2025 financial results. First Quarter Highlights: Net Sales of $4.5 billion.Consolidated GAAP operating income margin of 9.1%.GAAP Net Income of $296.3 million and GAAP EPS of $1.24. Adjusted Net Income of $312.6 million and Adjusted EPS of $1.31.Adjusted EBITDA of $533.2 million, or a 12.0% margin.The U.S. Fresh portfolio experienced strong deman ...

Core Viewpoint - Pilgrim's Pride Corporation (PPC) is expected to report a significant increase in first-quarter earnings, with a projected rise of 63.6% compared to the same quarter last year, despite a slight downward adjustment in consensus estimates [1][13]. Earnings Expectations - The consensus mark for first-quarter earnings has decreased by one cent over the past week, but the overall projection remains strong [1]. - Pilgrim's Pride has a trailing four-quarter average earnings surprise of 25.7%, with the last quarter's earnings exceeding the Zacks Consensus Estimate by 19.5% [1]. Earnings Prediction Model - The Zacks model does not predict a definitive earnings beat for PPC this quarter, as the company has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold) [2][3]. Strategic Investments and Growth - The company has been focusing on strategic investments to drive long-term growth and operational excellence, allocating significant capital towards expansion projects and efficiency initiatives [4][5]. - Efforts include optimizing product mix, enhancing partnerships with key customers, and supporting sustainability goals, which are expected to positively impact the bottom line [5]. Foodservice Segment Performance - Pilgrim's Pride is experiencing strong momentum in its foodservice segment, with increased volumes and revenues across commercial and non-commercial channels, driven by growing demand for chicken in Quick-service restaurants [6]. Stock Performance - The stock price of Pilgrim's Pride has surged by 17.9% over the past three months, outperforming the Zacks Food - Meat Products industry's decline of 8.4% and key competitors like Tyson Foods and Hormel Foods [7]. Valuation Perspective - From a valuation standpoint, Pilgrim's Pride shares are trading at a forward 12-month price-to-earnings ratio of 10.80, below both the five-year median of 11.01 and the industry average of 13.31, indicating an attractive investment opportunity [9][10]. - The stock has a Value Score of A, further enhancing its appeal for value investors [9]. Investment Outlook - Pilgrim's Pride is positioned as a compelling value play, outperforming its industry and major competitors, making it an attractive option for both existing and new investors [12]. - Expectations for the upcoming earnings report remain cautiously optimistic, supported by strategic investments, strong foodservice momentum, and product innovation [13].