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PILGRIMS PRIDE CORP (PPC)·Q3 2025 Earnings Summary

Executive Summary

  • PPC delivered $4.76B in net sales and $1.52 adjusted EPS, with consolidated Adjusted EBITDA of $633.1M (13.3% margin). While revenue grew 3.8% YoY, margins compressed vs last year on late‑quarter commodity price declines, particularly in September .
  • Results beat S&P Global consensus on adjusted EPS ($1.52 vs $1.38*) and revenue ($4.76B vs $4.70B*); EBITDA also came in above consensus on SPGI’s EBITDA basis ($611M actual vs $589M*), though the company reports $633.1M Adjusted EBITDA (basis difference noted). These constitute modest beats and should support estimate stability near term.*
  • Management reiterated a disciplined capital plan: FY25 capex ~ $700M, effective tax rate ~25%, and FY net interest expense ~ $110M; liquidity was ~$1.7B, net leverage ~1x LTM Adjusted EBITDA, and net debt < $2.5B, providing flexibility amid commodity volatility .
  • Strategic investments continue: U.S. conversion of a Big Bird facility to case‑ready, a new Walker County prepared foods plant, and Mexico fresh/prepared expansions; Europe signed a 10‑year supply agreement and is pivoting from restructuring to growth .

Values with asterisk (*) retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Prepared Foods and brands continued to scale: “U.S. Prepared Foods continues to expand… net sales have increased over 25%… Just Bare… market share has grown by nearly 300 bps” .
  • U.S. operational execution offset commodity volatility: “Big Bird improved production efficiencies and live operations to mitigate impacts of volatile markets” .
  • Europe and Mexico grew with key customers: Europe secured a 10‑year supply agreement and saw branded momentum, while Mexico grew value‑added sales 9% and advanced expansion projects .

Selected quotes:

  • “Our diversified portfolio across bird sizes… and growth in value‑added products all moderated the impact of volatile commodity market fundamentals.” – Fabio Sandri
  • “We anticipate our full‑year CapEx spend to approximate $700 million.” – CFO Matt Galvanoni
  • “We had $1.7 billion in total cash and available credit… net debt totaled less than $2.5 billion with a leverage ratio of slightly more than 1x.” – CFO

What Went Wrong

  • Margin compression vs LY: Adjusted EBITDA margin fell to 13.3% from 14.4% on lower late‑quarter commodity pricing and higher SG&A (legal/incentive) .
  • Mexico profitability eased: adjusted EBITDA margin was 8.2% vs 9.7% last year due to lower market pricing amid higher supply in certain regions .
  • Europe pork challenged: softer demand and China’s anti‑dumping probe pressured the pork business; U.K. imports weighed on branded sausage pricing (Richmond) .

Financial Results

Consolidated Performance vs Prior Periods

MetricQ3 2024Q2 2025Q3 2025
Revenue ($B)$4.585 $4.757 $4.759
GAAP EPS ($)$1.47 $1.49 $1.44
Adjusted EPS ($)$1.63 $1.70 $1.52
Operating Income ($MM)$508.4 $512.3 $492.6
Adjusted EBITDA ($MM)$660.4 $686.9 $633.1
Adjusted EBITDA Margin (%)14.4% 14.4% 13.3%

Actuals vs S&P Global Consensus (Q3 2025)

MetricActualConsensusBeat/Miss
Adjusted/Primary EPS ($)1.52 1.3825*Beat
Revenue ($MM)4,759.3 4,699.2*Beat
EBITDA ($MM)611.2* (SPGI actual) / 633.1 (Adj EBITDA) 588.6*Beat

Values with asterisk (*) retrieved from S&P Global.

Segment/Geography

  • Net Sales by Region (Q3): U.S. $2,836.6MM; Europe $1,392.5MM; Mexico $530.2MM (vs Q3’24: U.S. $2,773.4MM; Europe $1,308.1MM; Mexico $503.5MM) .
  • Adjusted Operating Margin by Segment (Q3): U.S. 14.2% (vs 15.4% LY); Europe 5.1% (vs 5.8% LY); Mexico 7.4% (vs 8.5% LY) .
Segment MetricQ3 2024Q3 2025
U.S. Net Sales ($MM)2,773.4 2,836.6
Europe Net Sales ($MM)1,308.1 1,392.5
Mexico Net Sales ($MM)503.5 530.2
U.S. Adjusted Op Margin (%)15.4% 14.2%
Europe Adjusted Op Margin (%)5.8% 5.1%
Mexico Adjusted Op Margin (%)8.5% 7.4%

KPIs and Capital

KPIQ3 2025Prior Quarter
Liquidity (Cash + Available Credit)~$1.7B N/A
Net Leverage (LTM Adj EBITDA)~1.0x <1.0x at Q2 end
Net Interest Expense (Q3 / FY Guide)$29M; FY ≈ $110M N/A
Effective Tax Rate (Q3 / FY Guide)25.6%; FY ~25% N/A
Capex (Q3 / FY Guide)$182M Q3; FY ≈ $700M $559M FY24 actual; Q2 YTD cadence shown

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CapexFY 2025Not disclosed≈ $700M New/Specified
Effective Tax RateFY 2025Not disclosed~25% New/Specified
Net Interest ExpenseFY 2025Not disclosed≈ $110M New/Specified
Revenue/MarginsFY 2025—No formal quantitative guidance provided —

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
U.S. commodity & demandQ1: Commodity strength aided Big Bird; case ready/small bird grew with key customers . Q2: Attractive cutout values; continued momentum in prepared/CR .September commodity price downdraft pressured margins, but ops efficiencies and mix mitigated impact .Near‑term headwind; operational offsets improving.
Prepared Foods & brandsQ1/Q2: >20% YoY sales growth; new plant announced; Just Bare momentum .U.S. Prepared sales +25% YoY; Just Bare +~300 bps share; new GA plant construction starting Q4 .Structural positive mix shift accelerating.
Europe profitabilityQ1: Europe adj EBITDA margin record 8.1% . Q2: Margin expansion via efficiencies .“New phase” of profitability; 10‑year supply deal; pork pressured by China AD probe & imports .Transition from restructuring to growth, mixed by pork.
Mexico performanceQ1: Strong profits; growth with key customers . Q2: Second highest adj EBITDA on record .Margins down vs LY on lower market pricing; expansions in Veracruz/Campeche on track .Near‑term margin softness; long‑term growth intact.
Supply chain & feedQ1/Q2: Operational efficiencies; stable feed.USDA broiler +2–3% 2025; corn/soy outlook favorable; vigilant on HPAI; exports broadly stable ex‑China .Balanced supply; input cost tailwinds.
Capital & balance sheetQ1: $1.5B special dividend; net leverage 1.1x . Q2: $500M special dividend declared; leverage <1x .~$2B dividends YTD; liquidity ~$1.7B; leverage ~1x; capex ramping .Ample flexibility supports growth.
Regulatory/tradeQ1/Q2: —China anti-dumping on EU pork; China keeping U.S. poultry closed post‑HPAI; U.K. imports press private label .Mixed: localized headwinds; differentiated offerings mitigate.

Management Commentary

  • “Our diversified portfolio across bird sizes, differentiation through higher attribute offerings, and growth in value‑added products all moderated the impact of volatile commodity market fundamentals.” – Fabio Sandri
  • “We anticipate our full‑year CapEx spend to approximate $700 million.” – Matt Galvanoni
  • “We had $1.7 billion in total cash and available credit… leverage ratio of slightly more than 1x our last 12 months adjusted EBITDA.” – Matt Galvanoni
  • “Our profitability journey in Europe has entered a new phase… investing in Key Customer partnerships… promotional activity, and developing new offerings to create additional consumer demand.” – Fabio Sandri

Q&A Highlights

  • Commodity & pricing exposure: September supply surge drove sharp commodity price declines (e.g., boneless breast ~$2.50 → ~$1.20/lb), but stabilization emerged late in October; roughly 25% of PPC’s portfolio is exposed to Big Bird indices, with growing differentiation even within Big Bird (ABF) .
  • Prepared Foods input costs: Q3 margin impact reflected lag from higher‑cost inventory; expected to normalize as lower input costs flow through in Q4 .
  • Europe: Pork pressured by China’s anti‑dumping action; PPC pursuing higher‑attribute offerings and long‑term contracts to mitigate; brands faced private label competition from imports .
  • Capital structure: ~ $116M bonds repurchased YTD with program wound down in July; no near‑term maturity pressure (2031–34 bond stack; U.S. facility 2028) .
  • Exports & trade: U.S. exports lower as dark meat deboning stays domestic; China remains closed to U.S. poultry despite nominal HPAI reopening protocols .

Estimates Context

  • Adjusted/Primary EPS beat: $1.52 actual vs $1.3825 consensus* (directionally ~10% beat).
  • Revenue beat: $4.76B actual vs $4.70B consensus* (modest beat).
  • EBITDA ahead of SPGI basis: $611M actual (SPGI) vs $589M consensus*, while company’s Adjusted EBITDA was $633M.
  • Implication: modest positive estimate revisions likely for EPS and EBITDA; mix/margin assumptions may be trimmed near‑term given late‑quarter price pressure and higher legal/SG&A.
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Prepared Foods and branded growth are compounding (Just Bare share +~300 bps), supporting a structurally higher margin mix even as commodity values normalize .
  • Despite a September commodity downdraft, diversified mix and U.S. operational gains held margins near LY levels; stabilization into Q4 and typical retail promotions could aid volume and utilization .
  • Europe is pivoting to growth with a 10‑year key customer agreement, but pork remains a swing factor; watch branded promo investment and chicken capacity additions .
  • Mexico’s near‑term margin pressure reflects supply‑driven pricing; expansion in fresh and prepared should enhance returns and reduce volatility over time .
  • Balance sheet strength (liquidity ~$1.7B, 1x leverage) and capex ($700M FY) underpin execution on U.S. case‑ready conversion and the new Walker County plant—both catalysts for Prepared Foods scale-up .
  • Modest beats vs consensus in Q3 should support near‑term sentiment; however, YoY margin compression and legal/SG&A costs temper the upside until commodity demand‑supply balances improve .
  • Monitoring list: Q4 seasonal demand, retail promo elasticity, feed input trajectory, EU pork developments, and pace of Prepared Foods capacity ramp.

Additional Documents in the Quarter

  • 8‑K Item 2.02 and press release: “Pilgrim’s Pride Reports Third Quarter 2025 Results…” detailing full financials and non‑GAAP reconciliations .
  • Earnings slides: Q3 highlights, capex cadence, market data (corn/soy, pricing) .
  • Earnings call transcript: detailed commentary, guidance markers, and Q&A .

Values with asterisk (*) retrieved from S&P Global.