Pilgrim's Pride Corporation (PPC) Earnings & Analysis

Latest quarter

Pilgrim’s Pride reported third-quarter revenue of $4.7 billion, above the consensus estimate of $4.6 billion. Adjusted earnings per share, as counted by the consensus, were $0.49, above the $0.48 estimate.

Revenue declined from $4.8 billion a year earlier. The company’s filing attributed a 5.5% decline in U.S. net sales to lower prices and volume, including the effects of increased transfers to prepared foods and a plant conversion. Europe net sales fell 1.3%, while Mexico sales rose 13.0%, with volume growth partly offset by lower prices.

Pilgrim’s reported diluted earnings per share of $0.49, down from $1.44 a year earlier. Gross margin narrowed to 7.17% from 13.9%, and operating margin fell to 4.12% from 10.4%. The filing cited higher U.S. costs per pound, including live operations, grain and grower pay.

Free cash flow was −$3.2 million, compared with $277.7 million a year earlier. CFO Matt Galvanoni said the company ended the quarter with over $2.1 billion in total cash and available credit.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Fabio Sandri said the affordability of chicken continued to appeal to consumers across Pilgrim’s regions, and that company volume remained steady against a year earlier. He said the diversified portfolio helped mitigate uneven market conditions as “supply rose faster than demand across retail and food service.”

In the U.S. fresh business, Sandri said plant upgrades, improved live operations and the Russellville conversion helped offset some declines in commodity chicken values. CFO Matt Galvanoni said improved yields and live performance only partly compensated for lower chicken prices and higher grain costs compared with a year earlier.

Sandri said prepared foods volume rose over 15% from a year earlier, led by retail-branded offerings, whose volume increased by over 20%. Galvanoni said prepared foods profitability nearly doubled from the prior-year quarter. Sandri said branded foodservice sales also grew and that Pilgrim’s would continue to use product innovation, customer partnerships and promotions to expand its presence.

In Europe, Galvanoni said poultry and meals helped offset pressure on pork margins from U.K. imports, costs related to the Middle East conflict and lower foodservice traffic. Sandri said competition from promoted premium private-label sausage challenged the Richmond brand’s growth. In Mexico, he said fresh retail-branded volumes rose over 40% from a year earlier, although low-priced competing proteins limited prepared foods growth.

Looking ahead, Sandri said Pilgrim’s had secured additional case-ready distribution for the rest of the year and expected promotions for bone-in products, especially wings, to support sales volumes. He also said construction of the Walker County prepared-foods facility remained on plan, with commissioning expected early in the second half of 2027.

Guidance

Galvanoni said Pilgrim’s now estimates FY2026 capital spending at approximately $875.0 million, compared with its prior estimate of approximately $900.0 million. He also said the company expects its full-year effective tax rate to approximate 26.0%, compared with its previous expectation of approximately 25.0%.