Thursday, September 21, 2023

Pilgrim’s Pride reports second quarter results

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GREELEY, Colo. — Pilgrim’s Pride Corp. has reported its second quarter 2022 financial results.

Second quarter highlights include:

  • Net sales of $4.63 billion, up 27.3 percent from prior year.
  • Consolidated GAAP (generally accepted accounting principles) operating income margin of 11.1 percent with GAAP operating income margins of 15.6 percent in U.S., 10.7 percent in Mexico and 0.6 percent in Europe.
  • GAAP net income of $362 million and GAAP EPS (earnings per share) of $1.50. Adjusted net income of $370.7 million or adjusted EPS of $1.54.
  • Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) of $623.3 million, or a 13.5 percent margin, 67.7 percent higher than a year ago.
  • U.S. retail and foodservice business remained resilient despite additional cost recovery from inflationary challenges. Margins improved given enhanced market fundamentals in Big Bird Debone and continued operational improvements.
  • Brand momentum continues throughout U.S. retail as Just Bare® and Pilgrim’s® Prepared products grew more than 96 percent year over year. E-commerce across the U.S. branded portfolio more than doubled.
  • Combined European business drove bottom line improvement from accelerated implementation of operational efficiencies, with a focus on key customer partnerships to recover inflationary costs, and further diversification of product offerings.
  • Demand in Mexico was solid and the focus and continued operational improvements overcame seasonal challenges in live operations at our locations.
  • Continuing commitment to corporate responsibility, the Board of Directors has approved the formation of an ESG Committee to further enrich our efforts on environmental, social and governance matters, including the Hometown Strong program and Net Zero commitment.
  • Liquidity position remains strong with an adjusted EBITDA net leverage ratio at 1.5x.
  • In driving for profitable growth, the company is committing to an expansion in fresh operations, a new protein conversion plant, and a new state-of-the-art prepared foods plant.

“Throughout the second quarter, we emphasized discipline and ownership throughout all aspects of our strategy and organization,” said Fabio Sandri, CEO of Pilgrim’s. “As a result, second quarter sales grew over 27 percent and adjusted EBITDA was up almost 68 percent from last year. I am continually impressed with our team’s determination to drive operational excellence to mitigate inflationary headwinds and work with key customers to profitably grow our business.”

“Our results continue to reflect the benefits of our diversified U.S. portfolio,” Sandri said. “Investments in automation and in our hourly team members and their communities led to significant progress in net staffing levels, enabling our operations to realize the benefits of strong market fundamentals. Moreover, our overall demand in retail and foodservice remained robust given our emphasis on key customers and our diversified product portfolio. In addition, our retail branded business maintained its momentum, as Just Bare® and Pilgrim’s® continued their strong growth trajectory.

“Our UK and European business continued to recover through enhanced partnerships with Key Customers, improved cost recovery, and accelerated implementation of supply chain solutions. The team will continue to identify ways to leverage our diverse portfolio of offerings and further optimize our production capabilities to alleviate continual cost escalation and consistently innovate to drive profitable growth in a difficult economic environment.”

“Our Mexican operations were impacted by seasonal diseases that reduced our efficiency on the live production at our locations,” Sandri added. “Nonetheless, the team leveraged our diverse geographic footprint to ensure sufficient supply, driving superior service for key customers. Moving forward, the team will continue to monitor conditions and adjust accordingly to grow the business.”

“Given our market momentum and focus on profitable growth, we are announcing a number of new investments in the US. These investments include an expansion of our Athens, Ga., facility, which will enhance our service levels and support growth for a key customer,” he noted. “It also includes funding for operational excellence improvements via automation throughout our U.S. footprint and construction of a protein conversion plant for pet food ingredients in Georgia. Also, we are committing to the development of a Prepared Foods facility in the Southeast USA to cultivate our branded growth, further diversifying our portfolio. Taken together, these investments will simultaneously enable sufficient capacity for top line growth with our key customers, enhance operating margins, create value for our shareholders, and provide opportunities for a better future for our team members.”

“We remain focused on being the best and most respected company in our industry and I am confident our team will continue to drive disciplined execution of our strategy and cultivate robust growth throughout this volatile environment,” Sandri said.

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