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 has significantly increased its focus on e-commerce, with digitally enabled sales rising over 26% year over year in Q2 2025 [1][10] - The company's flagship brands, Just Bare and Pilgrim's, are key contributors to its growth, with Just Bare capturing over 10% market share in fully cooked chicken [2][10] - Pilgrim's Pride is aligning its strategies with modern consumer buying habits by enhancing product visibility through partnerships with leading retailers and food service providers [3][10] Industry Trends - The online grocery market continues to expand, particularly in fresh and prepared food categories, which positions Pilgrim's Pride to benefit from the shift in consumer protein purchases to online channels [4] - The company's digital marketing efforts and brand strength are indicative of a modern approach to business growth beyond traditional sales channels [3] Financial Performance - Pilgrim's Pride shares have gained 10.6% in the past month, outperforming the industry growth of 2.9% and the broader Consumer Staples sector's growth of 0.4% [5] - The stock currently trades at a forward 12-month P/E ratio of 10.08, which is below the industry average of 12.53 and the sector average of 17.22, indicating a modest discount relative to peers [8]

Financial Performance - Pilgrim's Pride reported non-GAAP EPS of $1.70, exceeding the consensus estimate of $1.57, and GAAP revenue of $4.76 billion, surpassing estimates of $4.62 billion, marking a 4.3% increase from $4.56 billion in Q2 FY2024 [1][2] - Adjusted EBITDA reached $687 million, with a stable margin of 14.4%, while GAAP operating income increased by 16.2% to $512.3 million compared to the previous year [8][10] - A special dividend of $500 million was approved, reflecting strong liquidity and financial flexibility, with net leverage remaining under one times adjusted EBITDA [10][16] Business Overview - Pilgrim's Pride is a leading global poultry company, focusing on fresh, value-added, and prepared chicken products across the U.S., Europe, Mexico, and over 120 export markets [3] - The company employs approximately 62,200 people and operates 49 hatcheries, 35 feed mills, 39 processing plants, and 29 distribution centers [3] Operational Highlights - The U.S. segment saw GAAP net sales rise by 5.9% to $2.82 billion, with operating income increasing by 15.3% to $354.99 million [5] - Prepared Foods category experienced over 20% sales growth, with the Just Bare brand achieving over 10% market share in fully cooked chicken [5][11] - In Europe, GAAP revenue improved by 5.4% to $1.37 billion, with operating income margin expanding from 4.7% to 5.4% [6][12] - Mexico faced challenges with a revenue decline of 4.7% to $565.7 million, attributed to currency headwinds and tough year-ago comparisons, although chicken volumes shipped increased by over 5% [7][13] Strategic Focus - Recent strategies emphasize product and geographic diversification, margin improvement, and operational efficiency [4] - The company maintains control over costs, particularly feed, and focuses on expanding sales of higher-margin prepared foods [4][14] - Vertical integration remains a key feature, allowing the company to manage costs and respond to consumer and regulatory changes effectively [14] Future Outlook - Management reiterated a focus on capital discipline and long-term investment in high-growth prepared foods and international markets, with capital spending targeted at $750 million for FY2025 [15] - No formal new financial guidance was issued, but ongoing monitoring of commodity costs and market conditions in Mexico is advised [16]

Core Insights - Pilgrim's Pride Corporation reported strong financial results for the second quarter of 2025, with net sales reaching $4.76 billion, a 4.3% increase year-over-year [3][5] - The company achieved a GAAP EPS of $1.49, reflecting an 8.8% increase compared to the previous year, and an adjusted EPS of $1.70 [5][19] - Operating income rose by 16.2% to $512.3 million, while adjusted EBITDA increased by 4.7% to $686.9 million, maintaining a margin of 14.4% [3][5] Financial Performance - Net sales for the first half of 2025 totaled $9.22 billion, up 3.4% from $8.92 billion in the same period last year [3] - The U.S. Fresh portfolio saw significant growth, benefiting from high commodity values and operational improvements [5][4] - Adjusted EBITDA for the first half of 2025 was $1.22 billion, a year-over-year increase of 18.7% [3][5] Market Dynamics - Demand from key customers outpaced category growth, with prepared offerings expanding significantly [4][5] - The U.S. Prepared Foods segment reported over 20% growth in net sales compared to the previous year, driven by record production levels [5][6] - Pilgrim's Europe experienced margin expansion through sales growth and cost efficiencies, with sales to key customers increasing over 5% year-over-year [6][7] Strategic Initiatives - The company announced plans to build a new prepared foods plant in Georgia, expected to increase U.S. Prepared Foods sales by over 40% and create over 630 jobs [5][8] - Pilgrim's continues to diversify its product offerings, with Just Bare chicken brand achieving over 10% market share in the fully cooked chicken category [5][6] - The company maintains a strong liquidity position with a net leverage ratio of less than 1.0 times adjusted EBITDA [5][6] Shareholder Returns - The Board of Directors approved a special dividend of approximately $500 million, equating to $2.10 per share [5][6] - The company emphasizes its commitment to delivering value to shareholders through growth and innovation in its product lines [6][9]

Core Insights - Pilgrim's announced a $400 million investment to expand its operations in Georgia, specifically by building a new prepared foods facility in LaFayette, Walker County, which will create over 630 jobs at full capacity [1][3]. Company Expansion - The new facility will focus on producing fully cooked chicken products, supporting the growth of Pilgrim's prepared foods business, including brands like Just Bare, Pilgrim's, and Gold Kist [3]. - Construction is expected to begin in fall 2025, with hiring anticipated to start in 2027, coinciding with the completion of the first phase of the facility [3]. Economic Impact - The investment reflects Pilgrim's commitment to the region and aligns with the company's long-term growth strategy [3]. - Currently, Pilgrim's supports approximately 7,500 jobs across Georgia and operates seven food production facilities, contributing significantly to the local economy [2][6]. - Local officials, including the Mayor of LaFayette and the Chairwoman of Walker County Government, expressed that the new jobs will provide stable employment and long-term security for residents [4][5]. Industry Context - Agriculture remains Georgia's leading industry, with companies like Pilgrim's driving growth and creating quality jobs in local communities [2][5]. - The expansion of Pilgrim's operations is seen as a natural progression that will enhance the local economy and support partnerships with local poultry growers [4].