Pilgrim's Pride Corporation Q3 2024 Report

Pilgrim's Pride (NASDAQ:PPC) Corporation reported a strong third quarter in 2024, with net revenues climbing to $4.6 billion, a 5.2% year-over-year increase. The company's adjusted EBITDA soared to $660 million, up from $324 million a year prior, marking a robust adjusted EBITDA margin of 14.4%. This performance is credited to diversified strategies and key customer partnerships, particularly in the Big Bird and Case Ready segments, which benefited from production efficiencies and strong demand.

Key Takeaways

• Net Revenues: Increased by 5.2% YoY to $4.6 billion in Q3 2024.
• Adjusted EBITDA: Grew substantially to $660 million with a margin of 14.4%.
• Innovation: Launched over 280 new products.
• Europe Performance: Strong adjusted EBITDA margins of approximately 8.5%.
• U.S. Chicken Prices: Remained stable despite seasonal declines, with a 12% revenue increase.
• Net Debt: Stood at $1.3 billion; liquidity nearly at $3 billion.
• Capital Expenditures: Projected at $475 million with a focus on product optimization.
• Sustainability Commitment: Achieved a 17% reduction in Scope 1 and 2 emissions since 2019.

Company Outlook

Pilgrim's Pride expects U.S. chicken production to grow by about 1.7% for the year due to strong domestic demand, with a focus on operational excellence and market expansion. They plan to allocate excess cash towards growth, potential acquisitions, and enhancing shareholder value.

Challenges and Highlights

• Bearish Factors: Decline in demand in Mexico due to seasonality and disruptions. Slow recovery in the foodservice sector post-COVID. Challenges with new breed mortality rates.
• Bullish Factors: Strong demand in Big Bird and Case Ready segments. Price spread over ground beef remained significant, reflecting retail success.

Misses

• Reported a $9 million loss mainly due to live bird inventory losses from hurricanes.
• A gap between chicks placed and slaughtered affected overall production.

Q&A Highlights

• Improved consumer confidence and wage growth in Europe contributed to growth, alongside operational enhancements.
• U.S. market stability reported in chicken prices, with consumer behavior shifting towards retail and deli options post-COVID.
• The recovery from hurricane impacts is expected to take 9 to 12 months, with the company providing local assistance.

InvestingPro Insights

• Market Cap: $11.31 billion.
• Revenue Growth: Achieved 6.33% over the last twelve months.
• Valuation: Trading at a low earnings multiple with a P/E ratio of 15.29, indicating potential upside.
• Stock Performance: Impressive returns of 34.48% in the past six months and 89.96% over the last year.

Conclusion

Pilgrim's Pride has shown resilience against industry challenges. With a focus on innovation, operational excellence, and strategic growth initiatives, the company seeks to deliver value to its customers and shareholders in the competitive poultry industry.

• Operator: Good morning, welcome to the Q3 2024 earnings call.
• Fabio Sandri: Thank you for joining us. For Q3 2024, net revenues were $4.6 billion, up 5.2% YoY. Adjusted EBITDA was $660 million with a margin of 14.4%.
• Matt Galvanoni: We had strong year-over-year sales growth, driven by higher commodity chicken pricing and success with key customers.

Note: Full detailed data can be found in the earnings report on the company's investor relations page.