Financial Data and Key Metrics Changes - For Q3 2025, the company reported net revenues of $4.8 billion, an increase from $4.58 billion in the previous year, reflecting a year-over-year sales growth of 2.3% in the U.S. and over 5% in Mexico [22][24] - Adjusted EBITDA for Q3 was $633 million with an adjusted EBITDA margin of 13.3%, compared to $660.4 million and a margin of 14.4% in Q3 2024 [22][24] - The effective tax rate for the quarter was 25.6%, with a year-to-date rate of 25% [24] Business Line Data and Key Metrics Changes - The Case Ready and prepared foods segments saw increased volumes, contributing to overall revenue growth [22][24] - In the U.S., adjusted EBITDA for Q3 was $479.1 million, down from $499.4 million a year ago, while adjusted EBITDA margins decreased to 16.9% from 18% [22][24] - In Europe, adjusted EBITDA margins were 7.9% for Q3 compared to 8.6% last year, driven by pricing actions to address lower European hog market prices [22][24] Market Data and Key Metrics Changes - The USDA indicated a 2.7% year-over-year growth in Ready to Cook Production for the U.S., with a forecasted 2% increase in broiler production for 2025 [5][6] - Chicken is the only protein expected to see an increase in availability, while beef, pork, and turkey are projected to decline [7] - Demand for chicken remains strong across retail and foodservice, with notable growth in boneless chicken breasts and thighs due to price competitiveness against beef [8][9] Company Strategy and Development Direction - The company is focused on diversifying its portfolio and enhancing operational efficiencies to mitigate volatility in commodity markets [5][19] - Investments in growth projects are on schedule, including the conversion of a Big Bird facility to case ready and the establishment of a new prepared foods facility [18][26] - The company aims to leverage its strong position in the chicken market, particularly in the retail segment, to drive future growth [15][18] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer behavior is shifting towards chicken due to its affordability amid rising food prices, with expectations of continued demand growth [8][40] - The company anticipates a stable pricing environment moving into Q4, with promotional activities expected to support demand [100][102] - Concerns about inflation and SNAP dollar reductions were acknowledged, but management remains optimistic about the resilience of chicken demand [101][102] Other Important Information - The company has reduced its scope 1 and 2 emissions intensity by 23% since 2019 and improved its global safety index by over 77% [20][21] - The company continues to emphasize cash flows from operating activities and disciplined investment in high-return projects, maintaining a strong balance sheet [25][26] Q&A Session Summary Question: Can you clarify the main drivers of the recent commodity price changes and expectations for Q4? - Management indicated that lower food traffic in foodservice has led to promotions featuring chicken, resulting in a 4% volume growth in foodservice and a 3% growth in retail chicken demand [39][40] Question: What percentage of pricing contracts is exposed to commoditized pricing? - Approximately 25% of the company's portfolio is exposed to commodity markets, with efforts to differentiate offerings even within the Big Bird category [42] Question: How do you view the input cost headwinds and export challenges in the EU UK segment? - Input costs are expected to stabilize as inventory flushes through, while export challenges are being addressed through differentiated offerings and long-term arrangements with key customers [62][67] Question: What is the outlook for the EU UK segment's profitability journey? - The company is focused on organic growth and innovation in Europe, with expectations for chicken production to grow by 20% over the next two years [72][73] Question: How has the portfolio changed in terms of exposure to commodity markets? - The company has reduced its exposure to pure commodity pricing by negotiating fixed prices with key customers, allowing for more stability in pricing [104]

Core Insights - Pilgrim's Pride Corporation (PPC) is expected to report a decrease in earnings for Q3 2025, with the Zacks Consensus Estimate dropping from $1.46 to $1.41, indicating a 13.5% decline year-over-year [1][8] Factors Impacting Earnings - The export business of Pilgrim's Pride is facing challenges due to lower broiler volumes, trade restrictions, and weaker international demand, compounded by ongoing tariffs from China [2] - Margin pressures in key markets, particularly in Mexico, are due to foreign exchange volatility and disease impacts, leading to lower profitability compared to the previous year [3] - Input cost risks from grain and soybean meal prices, along with rising marketing, R&D, and labor expenses, are inflating overall costs [3] - Consumer behavior changes linked to inflation are resulting in reduced spending and smaller basket sizes, contributing to a challenging earnings environment [4] Positive Aspects - Despite the challenges, there is resilient consumer demand for chicken as a cost-effective protein, particularly in the U.S. and Europe [5] - The company's branded portfolio, including products like Just Bare, is gaining traction, and its Case Ready and Prepared Foods segments are expanding distribution [5] - Foodservice trends favor PPC, as quick-service restaurants are increasingly offering chicken-based menu items to cater to value-conscious consumers [5] Earnings Prediction Insights - The current model does not predict an earnings beat for Pilgrim's Pride, as it holds a Zacks Rank of 5 (Strong Sell) and an Earnings ESP of 0.00% [6]

Core Insights - Pilgrim's Pride Corporation (PPC) reported a strong first-quarter 2025 performance with an adjusted EBITDA margin of 12%, an increase of 350 basis points from the previous year, primarily driven by the U.S. business where the margin rose to 14.3% from 9.4% [1][8] - The margin improvement was supported by strong performance in Prepared Foods and Case Ready segments, as well as favorable market pricing for Big Bird [1][8] Financial Performance - The adjusted EBITDA margin of 12% reflects significant operational execution aligned with favorable market conditions [4] - The U.S. business's adjusted EBITDA margin increased to 14.3%, indicating robust performance in key product areas [1][8] - Mexico's operations faced $8.5 million in foreign exchange headwinds, contributing to quarterly volatility [3][8] Market Conditions - The sustainability of the margin increase is questioned due to potential challenges such as live production volatility, hatchability concerns, and overall foodservice softness [2][4] - Quick service restaurant volumes remain strong, but foodservice traffic is under pressure across the industry [2] Regional Performance - Europe achieved an 8.1% margin, indicating progress from ongoing structural reorganization efforts, including support function integration and manufacturing optimization [3][8] - Key initiatives in Europe have enhanced performance, supported by continued product innovation [3] Valuation Metrics - Pilgrim's Pride currently trades at a forward 12-month P/E ratio of 8.78, which is below the industry average of 12.11 and the sector average of 17.31, positioning the stock at a modest discount [9]