Executive Summary

Q4 2024 delivered strong profitability despite seasonally softer volumes: Adjusted EBITDA rose 69.9% YoY to $525.7M (12.0% margin) while GAAP EPS increased 73.7% YoY to $0.99; revenue declined 3.5% YoY to $4.37B on a 14-week prior-year comp .
Mix and cost execution underpin results: U.S. margins benefited from robust Big Bird cutout values, demand in Case Ready/Small Bird, and Prepared Foods brand growth; Europe expanded margins through footprint/back-office optimization; Mexico saw counter-seasonal commodity strength .
Management flagged non-GAAP charges (litigation $95M; pension settlement $10.9M), while highlighting operational excellence and diversified portfolio strategy as drivers of margin resilience across cycles .
2025 outlook: CapEx $450–$500M, effective tax rate ~25%, SG&A $130–$135M/quarter, D&A ~~$440M; strong liquidity (~~$3.1B cash + available credit) and net leverage ~0.5x LTM Adjusted EBITDA position PPC to fund organic growth and portfolio upgrades .
Capital return catalyst: Special cash dividend of $6.30/share (~$1.5B) announced March 14, 2025, signaling balance sheet strength and confidence in branded growth; projects include expanding Prepared Foods capacity and small bird, converting a big bird plant to case-ready, and protein conversion expansion .

What Went Well and What Went Wrong

What Went Well

Demand and mix: “Our diversified portfolio…unlock consumer value through differentiated offerings,” driving U.S. Case Ready and Small Bird demand across retail, QSR, and deli; Big Bird margins expanded on strong seasonal pricing and operational improvements .
Europe margin progress: >100bps YoY margin improvement driven by manufacturing optimization, back-office integration, and branded innovation (Richmond, Fridge Raiders) growing ahead of categories .
Mexico momentum: Counter-seasonal commodity values strengthened; fresh branded products up ~10%; ramp-up at Mérida with continued capacity investments to support key customers .

What Went Wrong

Revenue softness vs tough comp: Net sales down 3.5% YoY due to a 14-week prior-year period (53-week FY), despite strong pricing/mix and margin gains .
U.S. Street expectations: Bank of America noted U.S. performance “came in a bit below expectations relative to the Street,” reflecting grain-based contract pass-throughs and portfolio stability that mutes commodity upside in some subchannels .
Operational headwinds: Weather (Douglas/Live Oak storms, short facility downtime for air-chill conversion) and industry hatchability challenges constrained supply growth in parts of Q4/Q1, though PPC’s geographic diversification mitigated impact .

Financial Results

Consolidated trend (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$4,559.3	$4,585.0	$4,372.1
GAAP EPS ($)	$1.37	$1.47	$0.99
Adjusted EPS ($)	$1.67	$1.63	$1.35
Operating Income ($USD Millions)	$440.8	$508.4	$306.7
Adjusted EBITDA ($USD Millions)	$655.9	$660.4	$525.7
Adjusted EBITDA Margin (%)	14.4%	14.4%	12.0%

Q4 YoY comparison

Metric	Q4 2024	Q4 2023	YoY Change
Revenue ($USD Billions)	$4.372	$4.528	(3.5)%
GAAP EPS ($)	$0.99	$0.57	+73.7%
Operating Income ($USD Millions)	$306.7	$184.3	+66.4%
Adjusted EBITDA ($USD Millions)	$525.7	$309.5	+69.9%
Adjusted EBITDA Margin (%)	12.0%	6.8%	+5.2 pts

Segment/geography breakdown (Q4)

Region	Net Sales ($USD Thousands)	Net Sales (Q4 2023)	Operating Income ($USD Thousands)	Operating Income (Q4 2023)
U.S.	$2,613,241	$2,660,649	$205,752	$128,353
Europe	$1,259,176	$1,341,103	$68,983	$57,568
Mexico	$499,647	$526,550	$31,916	$(1,621)
Total	$4,372,064	$4,528,302	$306,651	$184,299

Segment Adjusted EBITDA (Q4)

Region	Adjusted EBITDA ($USD Thousands)
U.S.	$371,649
Europe	$117,141
Mexico	$36,930
Total	$525,720

KPIs

KPI	Period	Value
Cash from Operations ($USD Thousands)	FY 2024	$1,990,127
CapEx ($USD Millions)	FY 2024	$476
Net Debt ($USD Billions)	FY 2024 (YE)	~$1.15
Net Leverage (LTM Adjusted EBITDA)	FY 2024 (YE)	~0.5x
Liquidity (Cash + Available Credit, $USD Billions)	FY 2024 (YE)	~$3.1

Note: Fabio Sandri stated Q4 Adjusted EBITDA of $536M in prepared remarks; the press release/8-K report $525.7M. Use 8-K/press release figures for financials .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Effective Tax Rate	FY 2025	N/A	~25%	Initiated
CapEx	FY 2025	N/A	$450–$500M	Initiated
SG&A Expense	FY 2025	N/A	$130–$135M per quarter	Initiated
D&A	FY 2025	N/A	~$440M	Initiated
Net Interest Expense	FY 2025 (mgmt discussion)	N/A	$65–$75M	Initiated
Special Dividend	Payable Apr 17, 2025	N/A	$6.30/share (~$1.5B total)	New capital return

Management also highlighted non-GAAP items impacting Q4 GAAP results: litigation settlement charges ($95M) and pension settlement charges ($10.9M) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2, Q2 2024)	Previous Mentions (Q-1, Q3 2024)	Current Period (Q4 2024)	Trend
U.S. Big Bird commodity dynamics	Benefited from enhanced cutout values; lower input costs; operational efficiencies	Sustained improvements; positive market fundamentals	Elevated seasonal cutout values; profitability improved; weather/hatchability constraints discussed	Improving with seasonal strength; monitored for supply constraints
Case Ready & Small Bird demand	Above-market growth with key customers; differentiated offerings	Profitable growth; quality/service increased distribution	Retail/QSR/deli demand robust; mix and operational excellence drove margins	Improving/steady
Prepared Foods brands (Just Bare, Pilgrim’s)	Innovation, increased distribution; double-digit growth	Expanded distribution/promo; brand innovation	Retail foodservice growth; Just Bare +35%, Pilgrim’s +16% YoY in Q4	Strengthening
Europe optimization & brands	Footprint/back-office optimization; branded growth; awards	Record quarterly Adj. EBITDA; >280 new products; awards	Margins expanded >100bps YoY; brand momentum (Fridge Raiders, Rollover)	Improving
Mexico margins/commodity	Balanced supply/demand; brand growth; operational excellence	Seasonality; branded sales +20%	Counter-seasonal commodity strength; fresh brands ~+10%; Mérida ramp-up	Improving
Supply chain & hatchability	Notable operational excellence and biosecurity investments	Hurricane Helene inventory write-down; restructuring in Europe	Industry hatchability remains challenged; weather events managed via footprint	Challenged but mitigated
Tariffs/macro/export	N/A	N/A	Monitoring tariff risks; Mexico as key trade partner; domestic dark meat demand supports pricing	Neutral; risk monitored
Sustainability/RNG	South Georgia protein conversion plant ramp	ESG progress; sustainability report	RNG project commissioned at Sumter with GreenGasUSA; emissions reduction initiatives	Expanding initiatives
Capital allocation	Liquidity improving; net leverage 1.1x	Net leverage 0.65x; strong cash generation	Leverage ~0.5x; $6.30/share special dividend	Balance sheet strengthening; cash return

Management Commentary

“While we experienced a positive market environment…we elevated our performance across all regions through…operational excellence, expanded relationships with key customers, and…value-added portfolio.” – Fabio Sandri, CEO .
“Adjusted EBITDA in the U.S. for Q4 came in at $371.6 million… profitability significantly improved year-over-year as commodity market pricing improved, grain costs were lower and the business achieved further operational improvement.” – Matthew Galvanoni, CFO .
“Europe continued to make strong progress in its profitability journey… launched new and innovative products that are growing ahead of the categories…” – Fabio Sandri .
“Margins increased [in Mexico]…commodity values increased throughout the quarter…ramp-up for production in Mérida is proceeding as planned.” – Fabio Sandri .
“We recorded $95 million in litigation-related settlement charges [and] $10.9 million of pension settlement charges… This pension obligation termination is now fully complete.” – Matthew Galvanoni .

Q&A Highlights

Commodity dynamics and supply: Elevated Big Bird cutout values in Q4; Q1 typically sees demand rebound with commodity prices rising; production growth tempered by hatchability and weather impacts .
U.S. segment vs Street: Street viewed U.S. seasonal results as light; management emphasized stable grain-based pricing in Case Ready/Small Bird and >$100M annual operational improvements limiting volatility while capturing upside .
Mexico outlook: Strong demand, live market volatility; branded and prepared growth; management expects continued affordability-driven demand, with biosecurity mitigating disease risk .
Pricing into summer: Breast meat demand expected to remain strong; USDA projects protein availability growth ~1.2% with beef decline supporting chicken; setup favors firm commodity pricing into summer .
Cash flow/working capital: 2024 saw >$300M working capital uplift; 2025 working capital impact expected to be more flattish given mixed grain outlook (corn higher, soy lower) .
CapEx and capacity: 2025 CapEx $450–$500M focused on sustaining ops and routine growth; expanding Prepared Foods capacity, small bird, and protein conversion to upgrade mix and reduce risk .
Tariffs/export policy: Monitoring potential tariffs; Mexico is key trade partner; domestic dark meat demand supports pricing; geographic production diversity mitigates AI/export disruptions .

Estimates Context

S&P Global consensus estimates were unavailable at time of analysis due to a data request limit, so we could not provide revenue/EPS estimate comparisons for Q4 2024. We attempted retrieval but encountered an SPGI quota error. As a qualitative indicator, Bank of America’s question suggests the U.S. segment was “below expectations relative to the Street” in Q4 .
We will update vs-consensus comparisons once S&P Global data access is restored.

Key Takeaways for Investors

Margin resilience is durable: diversified portfolio (Case Ready/Small Bird/Prepared) and operational excellence enable PPC to capture commodity upside while limiting downside; Europe’s optimization and Mexico’s brand momentum broaden earnings power .
Non-GAAP adjustments matter: $95M litigation and $10.9M pension charges impacted GAAP; Adjusted EPS ($1.35) better reflects core profitability in Q4 .
Near-term setup constructive: Strong cutout values, tight protein availability (beef down), firm retail/QSR demand support continued margin strength into 1H25; monitor hatchability/weather risks .
Capital deployment accelerates branded growth: Special dividend indicates balance sheet strength; management outlined organic investments to expand Prepared Foods capacity, small bird, case-ready conversion, and protein conversion .
2025 model inputs: Use CapEx $450–$500M, SG&A $130–$135M/qtr, D&A ~$440M, tax ~25%, and net interest ~~$65–$75M; liquidity remains ample (~~$3.1B) with maturities well-staggered (2031–2034) .
Watch U.S. pacing vs Street: Seasonal dynamics and grain-based contracts can temper upside vs commodity moves; Street expectations may need to recalibrate to portfolio stability and non-GAAP normalization .
Sustainability initiatives create optionality: RNG commissioning at Sumter and scope 1/2 intensity reductions support customer partnerships and potential margin benefits over time .

Appendix: Additional context from prior quarters

Q3 2024: Revenue $4.585B; GAAP EPS $1.47; Adjusted EBITDA $660.4M (14.4% margin); Europe posted record Adj. EBITDA; hurricane Helene inventory write-down and ongoing restructuring charges noted .
Q2 2024: Revenue $4.559B; GAAP EPS $1.37; Adjusted EBITDA $655.9M (14.4% margin); Prepared Foods double-digit growth; South Georgia protein conversion plant ramp .

PILGRIMS PRIDE CORP (PPC)·Q4 2024 Earnings Summary