Core Viewpoint - Pilgrim's Pride Corporation (PPC) has experienced a significant 47% increase in its stock price over the past year, outperforming the Zacks Food - Meat Products industry, which saw an 11.2% decline, and the broader Consumer Staples sector and S&P 500, which gained 1.3% and 10% respectively [1][3]. Group 1: Market Performance - PPC stock closed at $49.62, which is 13.2% below its 52-week high of $57.16 reached on February 14, attributed to geopolitical tensions and profit booking [4]. - The stock continues to trade above its 200-day moving average, indicating a bullish trend despite recent volatility [4][5]. Group 2: Competitive Positioning - PPC has outperformed key competitors such as Tyson Foods, which gained 6.8%, while Hormel Foods and Beyond Meat saw declines of 14% and 59.2% respectively [3]. - The company is capitalizing on the growing consumer demand for chicken, expanding its foodservice distribution network and experiencing increased volumes in quick-service restaurants (QSR) [7]. Group 3: Innovation and Product Development - PPC is committed to innovation and product differentiation, with its Prepared Foods segment seeing steady growth, particularly from the Just BARE brand, which gained 200 basis points in market share in Q4 2024 [8]. - The company is investing between $450 million and $500 million in capital expenditures for 2025 to enhance production and operational efficiencies [9]. Group 4: Financial Outlook - The Zacks Consensus Estimate for PPC's earnings per share has been revised upward by 2.9% to $5.28 for the current fiscal year [10]. - PPC is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 9.67X, below its median level of 9.98X and the industry's multiple of 12.72X, indicating potential undervaluation [13]. Group 5: Investment Opportunity - Despite recent stock price corrections, PPC demonstrates strong operational execution and market adaptability, suggesting potential for sustained performance [14]. - The favorable valuation and positive earnings outlook position PPC as an attractive investment opportunity for value-focused investors [14].

Core Insights - Pilgrim's Pride Corporation (PPC) has announced a $1.5 billion special cash dividend, equating to $6.30 per share, to be paid on April 17, 2025, reflecting the company's strong balance sheet and growth confidence [1] - The company is focused on diversifying its portfolio, expanding market presence, and optimizing capital structure through investments in prepared foods and enhancing production capabilities [2][3] Financial Strategy - Over the past five years, PPC has invested $950 million in acquisitions, $1.8 billion in share repurchases and dividends, and $2.2 billion in capital expenditures, demonstrating a commitment to innovation and operational efficiency [3] - The special dividend highlights PPC's dedication to returning capital to shareholders while benefiting from leadership in the protein market and rising consumer demand [10] Market Positioning - PPC is capitalizing on increasing consumer demand for chicken in both retail and foodservice sectors, with a strengthened distribution network and a notable rise in quick-service restaurant volumes [6][7] - The company is aligning its supply chain with foodservice trends, focusing on higher-margin offerings to capture a greater market share [7] Innovation and Brand Strategy - PPC prioritizes innovation and brand differentiation, with its Prepared Foods segment growing due to strong performance from premium brands and the relaunch of the Pilgrim's brand [8]

Core Insights - Pilgrim's Pride shares have decreased by approximately 3.4% since the last earnings report, although this performance has been better than the S&P 500 [1] - There is uncertainty regarding whether the negative trend will persist until the next earnings release or if the company is poised for a breakout [1] Earnings Estimates - Analysts have not made any revisions to earnings estimates in the past two months, indicating a period of stability in expectations [2]

Core Insights - Pilgrim's Pride Corporation (PPC) is experiencing strong growth driven by strategic market positioning, cost efficiencies, and innovation [1] - The company reported adjusted earnings of $1.35 per share in Q4 2024, up from 59 cents the previous year, attributed to higher margins and improved production efficiencies [2] - PPC's Big Bird segment benefited from lower grain costs, while the Case Ready and Small Bird segments saw increased sales due to strong customer demand [3] Market Positioning - PPC is capitalizing on growing consumer demand for chicken in both retail and foodservice sectors, with a favorable supply-demand balance in the protein market [2][3] - The company is expanding its foodservice distribution network, particularly in quick-service restaurants (QSR), as consumers seek affordable dining options [4][5] Innovation and Product Development - PPC is prioritizing innovation, with its Just BARE brand gaining market share by 200 basis points in Q4 2024, and the relaunch of the Pilgrim's brand enhancing consumer traction [6] - The company is investing between $450 million and $500 million in capital expenditures for 2025 to expand Prepared Foods production and improve operational efficiencies [7] Financial Performance - PPC's operational efficiencies and strategic investments have led to strong financial performance, positioning the company for sustained profitability and market leadership [8]

Core Viewpoint - Pilgrim's Pride Corporation has announced a capital deployment strategy aimed at improving its capital structure, enhancing its diversified portfolio, stimulating brand growth, and generating shareholder value through a special cash dividend of $6.30 per share, totaling approximately $1.5 billion [1][2]. Group 1: Capital Deployment Strategy - The board of directors has approved a special cash dividend of $6.30 per share, payable on April 17, 2025, to stockholders of record on April 3, 2025 [1]. - Over the past five years, Pilgrim's has invested more than $950 million in acquisitions, $1.8 billion in share repurchases and dividends, and $2.2 billion in capital expenditures [2]. Group 2: Future Growth Plans - The company plans to strengthen its portfolio by expanding in prepared foods, adding small bird capacity, converting a big bird plant to a case ready facility, and expanding protein conversion capacity [2]. - The leadership team will discuss its capital allocation strategy and future growth plans during an upcoming investor day event [3]. Group 3: Company Overview - Pilgrim's employs over 61,000 people and operates protein processing plants and prepared-foods facilities in 14 states, Puerto Rico, Mexico, the U.K., the Republic of Ireland, and continental Europe [4].

Core Insights - Pilgrim's Pride Corporation announced a capital deployment strategy aimed at improving its capital structure, enhancing its diversified portfolio, stimulating brand growth, and generating shareholder value [1][2] - The company declared a special cash dividend of $6.30 per share, totaling approximately $1.5 billion, payable on April 17, 2025 [1][2] - Over the past five years, Pilgrim's has invested more than $950 million in acquisitions, $1.8 billion in share repurchases and dividends, and $2.2 billion in capital expenditures [2] Capital Allocation Strategy - The CEO emphasized confidence in the business's future and the importance of the capital allocation strategy for disciplined growth and enhanced earnings potential [2] - The special dividend reflects the company's strong balance sheet and commitment to long-term stockholder value [2] - Future projects include expanding prepared foods, adding small bird capacity, converting a big bird plant to a case ready facility, and expanding protein conversion capacity [2][3] Company Overview - Pilgrim's Pride employs over 61,000 people and operates protein processing plants and prepared-foods facilities across 14 states, Puerto Rico, Mexico, the U.K., the Republic of Ireland, and continental Europe [4] - The primary distribution channels are through retailers and foodservice distributors [4]

Company Performance - Pilgrim's Pride (PPC) stock closed at $50.27, reflecting a -1.64% change from the previous day, underperforming the S&P 500's daily loss of 0.91% [1] - Over the past month, shares of Pilgrim's Pride have appreciated by 1.55%, which is lower than the Consumer Staples sector's gain of 3.05% and better than the S&P 500's loss of 7.38% [1] Earnings Outlook - Pilgrim's Pride is projected to report earnings of $1.27 per share in its upcoming earnings disclosure, indicating a year-over-year growth of 64.94% [2] Analyst Estimates - Recent changes in analyst estimates for Pilgrim's Pride are important as they reflect short-term business trends, with positive revisions being a good sign for the company's outlook [3] Zacks Rank and Performance - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), indicates that Pilgrim's Pride currently holds a Zacks Rank of 1 (Strong Buy), with 1 stocks historically generating an average annual return of +25% since 1988 [5] - The Zacks Consensus EPS estimate for Pilgrim's Pride has increased by 3.02% in the past month [5] Valuation Metrics - Pilgrim's Pride has a Forward P/E ratio of 9.68, which is lower than the industry average Forward P/E of 12.69, indicating a valuation discount [6] - The Food - Meat Products industry, which includes Pilgrim's Pride, holds a Zacks Industry Rank of 10, placing it in the top 4% of over 250 industries [6]

Group 1 - Pilgrim's Pride (PPC) has shown strong year-to-date performance, returning about 17% since the start of the calendar year, significantly outperforming the Consumer Staples sector, which has returned an average of -2.3% [4] - The Zacks Rank for Pilgrim's Pride is 1 (Strong Buy), indicating a favorable outlook based on earnings estimate revisions and improving earnings outlooks [3] - Over the past 90 days, the Zacks Consensus Estimate for PPC's full-year earnings has increased by 14.3%, reflecting improved analyst sentiment [4] Group 2 - Pilgrim's Pride belongs to the Food - Meat Products industry, which is currently ranked 11 in the Zacks Industry Rank, while this industry has lost an average of 9.8% so far this year, indicating PPC's relative strength [6] - In comparison, Sony (SONY), another outperforming stock in the Consumer Staples sector, has returned 16.8% year-to-date and has a Zacks Rank of 1 (Strong Buy) [5] - The Consumer Products - Staples industry, where Sony operates, is ranked 90 and has declined by 24.8% since the beginning of the year, highlighting the challenges faced by this segment [6]

Financial Data and Key Metrics Changes - For Q4 2024, net revenues were $4.37 billion, down from $4.53 billion a year ago, with adjusted EBITDA of $525.7 million and a margin of 12% compared to $309.5 million and a 6.8% margin in Q4 2023 [46] - For the fiscal year 2024, net revenues were $17.9 billion, up from $17.4 billion in fiscal 2023, with adjusted EBITDA of $2.21 billion and a 12.4% margin compared to $1.03 billion and a 6% margin last year [46][49] - Adjusted EBITDA in the U.S. for Q4 was $371.6 million, with adjusted EBITDA margins at 14.2% [47] - In Europe, adjusted EBITDA in Q4 was $117.1 million, a 14.2% increase from $102.5 million in 2023 [50] Business Line Data and Key Metrics Changes - The U.S. Fresh portfolio improved, with Big Bird expanding margins due to strong commodity cutout values and operational excellence [8] - Prepared Foods grew sales as interest strengthened for brand offerings in retail and foodservice [9] - Case Ready and Small Bird also drove profitable growth, improving performance and production efficiencies [9][33] - In Mexico, adjusted EBITDA for Q4 was $36.9 million compared to $6.8 million last year, with an 11.8% adjusted EBITDA margin [52] Market Data and Key Metrics Changes - Overall sales remained stable in retail, with consumers migrating towards poultry and chilled meals [10] - Foodservice grew double digits due to increased distribution and traffic for away-from-home eating occasions [10] - In the U.S., ready-to-cook chicken production grew 2.5% compared to Q4 2023, with commodity market pricing improving [14] - The USDA projects overall protein availability to grow only 1.2%, supporting demand for chicken [17] Company Strategy and Development Direction - The company focuses on a diversified portfolio to capture market upsides and operational excellence [8] - Continued investment in sustainability and innovation is prioritized to drive profitable growth [39][44] - The company aims to expand its capacity in the U.S. Prepared Foods business to meet growth trajectories [59] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand for chicken in both retail and foodservice, driven by affordability and menu penetration [68] - The company anticipates continued strong demand for chicken, especially during the summer, with prices expected to react accordingly [100] - Management acknowledged challenges in hatchability and production but is optimistic about improving management practices over time [124] Other Important Information - The company recorded $95 million in litigation-related settlement charges in Q4 [48] - The effective tax rate for the full year was 23.0%, with an anticipated rate of approximately 25% for 2025 [54] - The company has a strong balance sheet with net debt totaling approximately $1.15 billion and a leverage ratio of 0.5 times adjusted EBITDA [55] Q&A Session Summary Question: Market dynamics in Q4 and early Q1 - Management highlighted strong demand for chicken in retail and foodservice, with flat production in the Big Bird category sustaining prices [70] Question: Capital allocation and CapEx guidance - Management explained the $450 million to $500 million CapEx guidance focuses on sustaining operations and routine growth projects, with potential for more growth opportunities discussed at the upcoming Investor Day [73][74] Question: U.S. profitability and grain pricing - Management clarified that operational excellence initiatives improved profitability across all segments, despite some pressure from grain pricing [78][80] Question: Mexico's market dynamics and margins - Management expressed confidence in Mexico's growing economy and strong demand for chicken products, despite volatility in the live market [88][90] Question: Hatchability and production challenges - Management acknowledged ongoing hatchability issues but is optimistic about improving management practices and protocols over time [124]

Financial Performance - Net income attributable to Pilgrim's Pride Corporation for 2024 was $1.1 billion, or $4.57 per diluted common share, with a gross profit of $2.3 billion and cash generated from operations totaling $2.0 billion[136]. - Total net sales increased by $516.1 million, or 3.0%, from $17.4 billion in 2023 to $17.9 billion in 2024, driven primarily by a 6.0% increase in U.S. net sales[156]. - Gross profit rose by $1.2 billion, or 106.8%, from $1.1 billion in 2023 to $2.3 billion in 2024, with gross profit margins improving from 6.4% to 12.9%[159]. - Operating income increased by $983.8 million, or 188.4%, from $522.3 million in 2023 to $1,506.1 million in 2024[163]. - Net income for the year ended December 29, 2024, was $1,087,223, compared to $322,317 for the year ended December 31, 2023, representing a significant increase[231]. - Adjusted EBITDA for the year ended December 29, 2024, was $2,213,930, up from $1,034,191 in the previous year, indicating a growth of approximately 114%[231]. - The company’s comprehensive income for the year was $893.41 million, compared to $482.28 million in the previous year, demonstrating overall financial health and performance improvement[271]. Sales and Revenue - U.S. operating margins were reported at 10.5%, while Europe and Mexico segments had operating margins of 3.3% and 10.6%, respectively[136]. - Europe sales decreased by $66.6 million, or 1.3%, primarily due to lower net sales per pound and a decrease in sales volume[157]. - Mexico sales decreased by $19.5 million, or 0.9%, impacted by unfavorable foreign currency translation due to a weakening peso[158]. - Total net sales for the year ended December 29, 2024, reached $17,878.291 million, with U.S. sales contributing $10,629.929 million, Europe $5,136.747 million, and Mexico $2,111.615 million[334]. Cost and Expenses - Cost of sales for U.S. operations decreased by $439.4 million, or 4.6%, in 2024 compared to 2023, driven by a reduction in cost per pound sold and sales volume[160]. - SG&A expenses for U.S. operations rose by $167.5 million, or 59.1%, primarily due to increased litigation settlement and incentive compensation costs[165]. - Consolidated interest expense decreased by 46.9% to $88.5 million in 2024 from $166.6 million in 2023, with net interest expense as a percentage of net sales dropping from 1.0% to 0.5%[168]. - Consolidated income tax expense increased to $325.0 million in 2024 from $42.9 million in 2023, primarily due to higher pre-tax income[169]. Cash Flow and Liquidity - Cash provided by operating activities was $1,990.1 million in 2024, significantly up from $677.9 million in 2023[175]. - As of December 29, 2024, the company had cash and cash equivalents of $2,043.2 million available for liquidity[171]. - Cash provided by financing activities in 2024 was $(150.9) million, compared to $116.7 million in 2023, reflecting significant payments on long-term borrowings[185]. - The company expects sufficient liquidity from cash flows and credit facilities to meet obligations and capital spending for at least the next twelve months[190]. Investments and Capital Expenditures - Cash used in investing activities for the year ended December 29, 2024, was $460.8 million, a decrease from $503.4 million in the previous year[184]. - Capital expenditures for 2025 are anticipated to be between $450 million and $500 million, primarily for growth projects and operational efficiencies[187]. - The company plans to fund capital expenditures through cash flow from operations and cash on hand[187]. Environmental and Social Responsibility - The company is committed to reducing Scope 1 and 2 global greenhouse gas emissions intensity by 17.7% by 2025 and by 30.0% by 2030 from a 2019 baseline[151]. - The company has approved over $15 million for local projects aimed at alleviating food insecurity through its Hometown Strong initiative[153]. Goodwill and Intangible Assets - The goodwill balance as of December 29, 2024, was $1.24 billion, with $1.1 billion attributed to the Europe reportable segment[260]. - The company assessed its indefinite-life intangible assets in 2023 and found no material impairment, despite bypassing qualitative assessments due to increased long-term treasury rates[215]. - Goodwill and indefinite-lived intangible assets are tested for impairment annually, with no impairment indicators noted as of December 29, 2024[308]. Debt and Obligations - Long-term debt as of December 29, 2024, totals $3,256.3 million, with interest obligations amounting to $1,339.3 million[189]. - Total contractual obligations amount to $5,334.5 million, with $644.2 million due within one year[189]. - The company terminated its Pilgrim's Pride Pension Plan for Legacy Gold Kist and Union Plan in 2024, settling all obligations through lump-sum payouts and annuity purchases[224]. Market Conditions and Risks - The average global price of corn was approximately 30% lower than the previous year, while wheat prices were about 14% lower at the end of 2024 compared to the prior year[141]. - The company continues to face inflationary pressures but is negotiating with customers to recoup extraordinary costs and focusing on operational efficiencies[248]. - A hypothetical 10% increase in feed ingredient prices could increase the cost of sales by approximately $345,150,000 for the year ended December 29, 2024[238]. Accounting and Reporting - The Company recognizes revenue upon transfer of control to the customer, typically within days to weeks of order acceptance, ensuring timely revenue recognition[283]. - The Company evaluates impairment of long-lived assets at the country level, indicating a focus on operational efficiency and asset utilization[305]. - The Company applies the normal purchases and normal sales exception for certain forward physical grain purchase contracts, with no amounts recorded in the financial statements as of December 29, 2024[322].