Pilgrim's(US:PPC)2025-10-29 22:47Financial Performance - Pilgrim's Pride reported net income of $994.4 million, or $4.17 per diluted share, with net sales of $14.0 billion for the nine months ended September 28, 2025 [150]. - EBITDA for the nine months ended September 28, 2025, was $1.7 billion, with Adjusted EBITDA at $1.9 billion [150]. - Net sales for the nine months ended September 28, 2025 increased by $473.5 million, or 3.5%, to $13,979.7 million compared to the same period in 2024 [181]. - Gross profit for the nine months ended September 28, 2025 increased by $170.0 million, or 9.7%, from $1.76 billion to $1.93 billion [184]. - Operating income increased by $210.0 million, or 17.5%, to $1.4 billion for the nine months ended September 28, 2025, compared to $1.2 billion in the prior year [188]. - Net income for the nine months ended September 28, 2025, was $995.4 million, with Adjusted EBITDA reaching $1,853.2 million [216]. Sales and Revenue - U.S. net sales increased by $63.2 million, or 2.3%, driven by a sales volume increase of $131.0 million, or 4.7 percentage points, despite a decrease in sales price per pound [167]. - Europe net sales rose by $84.4 million, or 6.4%, due to higher sales prices and a favorable foreign currency translation impact of $83.8 million, or 6.4 percentage points [168]. - Mexico net sales increased by $26.8 million, or 5.3%, attributed to sales volume growth and favorable foreign currency translation [169]. - Net sales for the three months ended September 28, 2025 were $4,759.3 million, an increase of $174.4 million, or 3.8%, compared to the same period in 2024 [171]. Costs and Expenses - Cost of sales increased by $198.9 million, or 5.1%, from $3,901.0 million to $4,099.9 million for the three months ended September 28, 2025 [171]. - SG&A expense increased by $20.2 million, or 14.0%, from $144.8 million to $165.0 million for the three months ended September 28, 2025 [175]. - Net interest expense increased to $29.0 million for the three months ended September 28, 2025, up from $19.5 million in the same period in 2024 [178]. - The cost of sales for U.S. operations increased by $205.9 million, or 3.0%, primarily due to increased sales volume and costs per pound sold [185]. - SG&A expenses totaled $498,233, reflecting a $20,216 increase or 4.2% from the prior year, with U.S. SG&A expenses increasing by 9.8% [188]. Cash Flow and Dividends - Cash provided by operating activities was $1,080.4 million for the nine months ended September 28, 2025, down from $1,640.8 million in the prior year [200]. - The company declared a special dividend of $6.30 per share, totaling approximately $1.5 billion, paid on April 17, 2025 [197]. - Cash used in financing activities was $2,112.5 million for the nine months ended September 28, 2025, significantly higher than $150.5 million in the same period in 2024, mainly due to special cash dividends [211]. Market and Economic Factors - The company anticipates that global market prices will depend on factors such as feed production costs and shifts in trade policy [163]. - A hypothetical 10% increase in feed ingredient prices would increase costs by approximately $77.5 million for the three months ended September 28, 2025 [220]. - A 10% weakening of the Mexican peso would decrease net assets of Mexican subsidiaries by $61.5 million as of September 28, 2025 [226]. - A 10% weakening of the British pound would decrease net assets of European subsidiaries by $89.6 million as of September 28, 2025 [228]. Risks and Challenges - The company acknowledges risks related to fluctuations in commodity prices for feed ingredients, pigs, and chicken, which could impact operations [234]. - Potential outbreaks of avian influenza or other diseases may affect the company's ability to conduct operations and demand for poultry products [235]. - The company faces risks from product contamination leading to liability claims and recalls, which could incur significant costs [235]. - Changes in laws or regulations, particularly regarding climate change and sustainability, may impact the company's operations [235]. - Competitive factors, inflation, and pricing pressures could affect the company's market position and profitability [235]. - The company may encounter challenges in effectively integrating acquisitions and realizing anticipated cost savings [235]. - Disruptions in international markets due to geopolitical events, such as the Russia-Ukraine war, could impact distribution channels [235]. - Cyber-attacks and natural disasters pose risks to the company's information systems and operational continuity [235]. - The company must maintain favorable labor relations and comply with labor laws to avoid operational disruptions [235]. - Uncertainties in litigation and other risk factors may affect the company's business and operational results [235].