Pilgrim’s Pride Corp ((PPC)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Pilgrim’s Pride Corp presented a balanced outlook, highlighting strong revenue growth and operational improvements. However, the company also acknowledged challenges in Europe and margin pressures due to commodity volatility and market dynamics.
Strong Revenue Growth
Pilgrim’s Pride reported net revenues of $4.8 billion for Q3 2025, showcasing a 2.3% year-over-year sales growth in the U.S., a 5% increase in Mexico, and over 6% growth in Europe. This robust revenue growth underscores the company’s successful strategies in expanding its market presence across different regions.
Prepared Foods Expansion
The company’s Prepared Foods segment experienced significant growth, with sales increasing by over 25%. This expansion was driven by an enhanced product offering and increased distribution, which led to a nearly 300 basis points increase in market share for the Just BARE brand.
Operational Efficiency Improvements
In the Big Bird segment, Pilgrim’s Pride improved production efficiency through better yields and equipment upgrades. These improvements allowed the company to maintain margins comparable to last year despite market volatility.
Sustainability Achievements
Pilgrim’s Pride made notable progress in its sustainability efforts, reducing Scope 1 and 2 emissions intensity by 23% since 2019. Additionally, the company increased its renewable electricity usage to over 21% of total electricity consumption.
Strong Cash Position
The company ended Q3 with $1.7 billion in total cash and available credit, maintaining a leverage ratio of slightly more than 1x adjusted EBITDA. This strong cash position provides a solid foundation for future investments and growth initiatives.
Decreased Margins
Despite the positive revenue growth, Pilgrim’s Pride experienced a decrease in adjusted EBITDA margin to 13.3% from 14.4% in Q3 last year. The U.S. margin also dropped from 18% to 16.9%, reflecting the challenges posed by market dynamics.
European Market Challenges
The European segment faced significant challenges due to lower hog prices and antidumping investigations by China, which impacted profitability. These issues highlight the complexities of operating in diverse international markets.
Commodity Market Volatility
The commodity chicken market experienced significant price drops, particularly in September, driven by excess supply and lower demand. This volatility posed challenges for Pilgrim’s Pride in maintaining stable margins.
Lower Profitability in Mexico
In Mexico, the adjusted EBITDA margin dropped to 8.2% from 9.7% a year ago due to lower market pricing for chicken. This decline in profitability underscores the impact of market pricing on the company’s financial performance.
Forward-Looking Guidance
Looking ahead, Pilgrim’s Pride aims to enhance returns, reduce volatility, and create additional value for shareholders through ongoing investments in growth and efficiency. The company plans to capitalize on commodity market upsides while protecting against downsides, with a focus on branded growth and product mix optimization in Europe, and maintaining growth momentum in Mexico.
In summary, Pilgrim’s Pride Corp’s earnings call reflected a balanced sentiment, with strong revenue growth and operational improvements being key highlights. However, challenges in Europe and margin pressures due to commodity volatility were also noted. The company’s forward-looking guidance indicates a strategic focus on enhancing returns and reducing volatility, aiming to create additional value for shareholders.