Pilgrim's(PPC) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Highlights Pilgrim's Pride achieved $4.8 billion in net sales and $512.3 million in operating income in Q2 2025, declaring a special dividend of approximately $500 million Overall Performance The company demonstrated strong financial performance with year-over-year growth in net sales and operating income, maintaining an adjusted EBITDA margin of 14.4% Q2 2025 Financial Performance | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | 4,757.4 | 4,559.3 | +4.3% | | GAAP Operating Income | 512.3 | 440.8 | +16.2% | | GAAP Net Income | 356.0 | - | - | | GAAP EPS | 1.49 | 1.37 | +8.8% | | Adjusted Net Income | 406.2 | - | - | | Adjusted EPS | 1.70 | - | - | | Adjusted EBITDA | 686.9 | 655.9 | +4.7% | | Adjusted EBITDA Margin | 14.4% | 14.4% | 0.0 pts | - The company's Board of Directors approved a special dividend payment of approximately $500 million ($2.10 per share)[2] - The company maintains a strong liquidity position and balance sheet flexibility, with net leverage below 1.0x Adjusted EBITDA[2] Operational Highlights by Segment All regional businesses performed well, with US fresh benefiting from strong demand and efficiency, and prepared foods sales growing over 20% year-over-year - US Fresh Business: Sales growth and margin expansion were driven by strong demand, focus on quality and service, and improved operational efficiency. Case Ready sales to key customers grew faster than the category average, Small Bird benefited from continued QSRs growth, and Big Bird improved margins through attractive cut values and enhanced operations[2][4] - US Prepared Foods: Sales increased by over 20% year-over-year, with operations driving record production to support growing retail and foodservice demand. The Just Bare brand ranked first among Circana product leaders, holding over 10% market share in the fully cooked chicken market[2][4] - European Operations: Margin growth was achieved through sales growth with key customers, key brand expansion, product portfolio optimization, and cost efficiencies. Fridge Raiders® and Rollover® brands saw volume growth faster than the category average[2][5] - Mexican Operations: Achieved its second-highest Adjusted EBITDA ever, benefiting from favorable demand and strong volumes. Brand diversification in fresh and prepared foods categories continued, with volume growth exceeding 5% year-over-year[2][5] Strategic Initiatives & Capital Allocation The company continues to invest in growth projects, including a new state-of-the-art prepared foods facility in Georgia, projected to increase US prepared foods sales by over 40% - Pilgrim's will invest in a new state-of-the-art prepared foods facility in Walker County, Georgia, to meet significant demand for value-added products in retail and foodservice, diversify its product portfolio towards higher-margin branded products, and expand supply chain capabilities[2][6] - The new facility is expected to create over 630 jobs and increase US prepared foods sales by over 40% from current levels once fully operational[2] - The company continues to invest in growth projects and maintains a strong liquidity position and balance sheet flexibility[2] Financial Statements This section presents the company's condensed consolidated balance sheets, statements of income, and statements of cash flows Condensed Consolidated Balance Sheets As of June 29, 2025, total assets were $10.119 billion, down from $10.651 billion on December 29, 2024, primarily due to reduced cash and cash equivalents Condensed Consolidated Balance Sheets (Thousand USD) | Metric | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Cash & Cash Equivalents | 849,036 | 2,040,834 | | Inventory | 1,940,603 | 1,783,488 | | Total Current Assets | 4,257,211 | 5,120,163 | | Net Property, Plant & Equipment | 3,297,793 | 3,137,891 | | Goodwill | 1,350,492 | 1,239,073 | | Total Assets | 10,118,666 | 10,650,576 | | Total Current Liabilities | 2,619,379 | 2,552,133 | | Net Long-Term Debt | 3,114,302 | 3,206,113 | | Total Liabilities | 6,366,130 | 6,397,180 | | Equity Attributable to Pilgrim's Pride Corporation Stockholders | 3,737,747 | 4,239,406 | | Total Stockholders' Equity | 3,752,536 | 4,253,396 | Condensed Consolidated Statements of Income In Q2 2025, net sales grew 4.3% year-over-year to $4.757 billion, with increases in gross profit and operating income Condensed Consolidated Statements of Income (Thousand USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | 4,757,365 | 4,559,314 | 9,220,374 | 8,921,248 | | Cost of Sales | 4,042,070 | 3,867,688 | 7,950,206 | 7,845,713 | | Gross Profit | 715,295 | 691,626 | 1,270,168 | 1,075,535 | | Selling, General & Administrative Expenses | 199,457 | 214,161 | 333,236 | 333,237 | | Operating Income | 512,339 | 440,790 | 916,821 | 691,064 | | Net Income | 356,009 | 326,523 | 652,352 | 501,461 | | Net Income Attributable to Pilgrim's Pride Corporation | 355,520 | 326,303 | 651,553 | 500,724 | | Diluted Earnings Per Share | 1.49 | 1.37 | 2.73 | 2.11 | Condensed Consolidated Statements of Cash Flows For H1 2025, operating cash flow was $622 million, investing cash outflow was $256 million, and financing cash outflow was $1.588 billion, primarily due to $1.495 billion in dividend payments Condensed Consolidated Statements of Cash Flows (Thousand USD) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 622,103 | 989,656 | | Net Cash Used in Investing Activities | (256,371) | (208,696) | | Net Cash Used in Financing Activities | (1,588,271) | (149,686) | | Cash & Cash Equivalents at End of Period | 858,319 | 1,334,126 | - Cash used in financing activities significantly increased, primarily due to $1,495,497 thousand in dividends paid in H1 2025, compared to no dividends paid in the prior year period[19] Non-GAAP Financial Measures Reconciliation This section provides reconciliations of non-GAAP financial measures, including Adjusted EBITDA, Adjusted Operating Income, and Adjusted Net Income/EPS Adjusted EBITDA Reconciliation The company provides a reconciliation of Adjusted EBITDA, which excludes non-recurring items like interest, taxes, D&A, FX gains/losses, litigation, and restructuring, to better reflect ongoing operational performance - Adjusted EBITDA is calculated by adding back interest, taxes, depreciation and amortization, foreign currency transaction gains and losses, litigation and restructuring activity losses, and subtracting net income attributable to non-controlling interests, to provide a more comparable measure of operating performance[21][23] Consolidated Adjusted EBITDA (Thousand USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | 356,009 | 326,523 | 652,352 | 501,461 | | EBITDA | 620,537 | 550,459 | 1,132,282 | 911,706 | | Adjusted EBITDA | 686,903 | 655,939 | 1,220,147 | 1,027,831 | Last Twelve Months (LTM) Adjusted EBITDA (Thousand USD) | Metric | LTM June 29, 2025 | | :--- | :--- | | Net Income | 1,238,114 | | EBITDA | 2,154,976 | | Adjusted EBITDA | 2,406,246 | EBITDA Margin Reconciliation (%) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income Margin | 7.48% | 7.16% | 7.08% | 5.62% | | EBITDA Margin | 13.03% | 12.07% | 12.28% | 10.21% | | Adjusted EBITDA Margin | 14.42% | 14.39% | 13.23% | 11.51% | Adjusted EBITDA by Segment (Three Months Ended, Thousand USD) | Segment | Q2 2025 Adjusted EBITDA | Q2 2024 Adjusted EBITDA | | :--- | :--- | :--- | | US | 482,734 | 444,588 | | Europe | 111,820 | 96,244 | | Mexico | 92,349 | 115,107 | | Total | 686,903 | 655,939 | Adjusted EBITDA by Segment (Six Months Ended, Thousand USD) | Segment | H1 2025 Adjusted EBITDA | H1 2024 Adjusted EBITDA | | :--- | :--- | :--- | | US | 875,244 | 687,492 | | Europe | 211,365 | 177,701 | | Mexico | 133,538 | 162,638 | | Total | 1,220,147 | 1,027,831 | Adjusted Operating Income Reconciliation The company provides a reconciliation of Adjusted Operating Income and its margin, excluding non-recurring items like litigation and restructuring, to offer a clearer view of operational performance - Adjusted Operating Income is calculated by adding back litigation and restructuring activity losses to better reflect ongoing operating performance[41] Adjusted Operating Income by Segment (Thousand USD) | Segment | Q2 2025 Adjusted Operating Income | Q2 2024 Adjusted Operating Income | | :--- | :--- | :--- | | US | 413,451 | 379,238 | | Europe | 73,918 | 60,668 | | Mexico | 86,933 | 108,809 | Adjusted Operating Income Margin by Segment (%) | Segment | Q2 2025 Adjusted Operating Income Margin | Q2 2024 Adjusted Operating Income Margin | | :--- | :--- | :--- | | US | 14.7% | 14.2% | | Europe | 5.4% | 4.7% | | Mexico | 15.4% | 18.3% | Adjusted Net Income and EPS Reconciliation The company provides a reconciliation of Adjusted Net Income and Adjusted EPS, excluding non-recurring items like FX gains/losses, litigation, and restructuring, to offer a more comparable performance measure - Adjusted Net Income and EPS are calculated by excluding the after-tax impact of foreign currency transaction gains and losses, litigation and restructuring activity losses, and early debt extinguishment gains, to provide a more accurate measure of ongoing operating performance[48][52] Adjusted Net Income (Thousand USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income Attributable to Pilgrim's | 355,520 | 326,303 | 651,553 | 500,724 | | Adjusted Net Income Attributable to Pilgrim's | 406,197 | 397,965 | 718,761 | 580,847 | Adjusted EPS (USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP EPS | 1.49 | 1.37 | 2.73 | 2.11 | | Adjusted EPS | 1.70 | 1.67 | 3.02 | 2.44 | Supplementary Segment and Geographic Data This section provides detailed financial data broken down by business segment and geographic region Net Sales, Cost of Sales, Gross Profit, and Operating Income by Region US operations showed year-over-year growth in net sales, gross profit, and operating income, with Europe also demonstrating growth, while Mexico's performance declined Net Sales, Cost of Sales, Gross Profit, and Operating Income by Region (Thousand USD) | Metric | Region | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | US | 2,820,385 | 2,663,965 | 5,563,574 | 5,243,297 | | | Europe | 1,371,270 | 1,301,541 | 2,602,799 | 2,569,444 | | | Mexico | 565,710 | 593,808 | 1,054,001 | 1,108,507 | | Gross Profit | US | 489,242 | 452,339 | 876,864 | 689,631 | | | Europe | 124,133 | 113,870 | 240,437 | 206,035 | | | Mexico | 101,920 | 125,417 | 152,867 | 179,869 | | Operating Income | US | 354,987 | 307,988 | 673,793 | 487,405 | | | Europe | 70,419 | 23,993 | 119,490 | 55,109 | | | Mexico | 86,933 | 108,809 | 123,538 | 148,550 | Corporate Information This section provides details on the company's conference call, an overview of Pilgrim's Pride, forward-looking statements, and contact information Conference Call Details The company will host a conference call on July 31, 2025, to discuss quarterly results, with pre-registration and dial-in information provided - The conference call will be held on July 31, 2025, at 7 AM US Mountain Time (9 AM US Eastern Time)[8] - Participants can join the conference call via a pre-registration link or by dialing specified phone numbers[8][9] About Pilgrim's Pride Pilgrim's Pride is a leading global food company with approximately 62,200 employees, operating protein processing and prepared foods facilities across multiple countries and regions - Pilgrim's Pride has approximately 62,200 employees and operates protein processing and prepared foods facilities in 14 states, Puerto Rico, Mexico, the United Kingdom, the Republic of Ireland, and Continental Europe[10] - The company primarily distributes its products through retailers and foodservice distributors[10] Forward-Looking Statements This press release contains forward-looking statements regarding the company's future intentions, plans, and expectations, where actual results may differ materially due to various risk factors - Forward-looking statements involve the company's future intentions, plans, hopes, beliefs, expectations, or predictions, and actual results may differ materially due to various factors[11] - Risk factors include, but are not limited to, general poultry industry issues, the ability to execute business plans, feed ingredient and product pricing, avian influenza or other disease outbreaks, product contamination, changes in laws and regulations, competitive factors, currency fluctuations, international market disruptions, and cyberattacks[11] Contact Information Contact information for Andrew Rojeski, Head of Investor Relations and Sustainability, is provided - Contact Person: Andrew Rojeski, Head of Strategy, Investor Relations & Sustainability[13] - Email: IRPPC@pilgrims.com, Website: www.pilgrims.com[13](index=13&type=chunk)