Pilgrim's Pride (PPC) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 2026 reached $4.53 billion, up 1.6% year-over-year, but profitability declined sharply with net income at $101.5 million and adjusted EBITDA at $308.1 million (6.8% margin), impacted by lower commodity prices, higher SG&A, and operational disruptions.

• Adjusted EPS was $0.51, down from $1.31 year-over-year, and GAAP EPS dropped to $0.43 from $1.24.

• U.S. business faced margin compression from commodity prices, plant downtime, and weather, while Prepared Foods and retail segments saw robust growth, including Just BareⓇ retail sales up nearly 40%.

• Europe maintained steady sales and margins due to portfolio diversification and operational improvements; Mexico saw double-digit branded growth but margin pressure from excess supply and imports.

• Significant investments in plant upgrades, capacity expansion, and sustainability, with CapEx at $235–$236.2 million in Q1 and full-year guidance of $900–$950 million.

Financial highlights

• Gross profit declined to $345.5 million (7.6% margin), and operating income fell to $162.6 million (3.6% margin), both down sharply year-over-year.

• Adjusted EBITDA margin dropped to 6.8% from 12% year-over-year; U.S. margin was 7.0%, Europe 7.8%, and Mexico 3.1%.

• U.S. net revenues declined 3.9% to $2.64 billion; Europe net sales rose 9.8% to $1.35 billion; Mexico net sales increased 11.7% to $545.5 million.

• SG&A increased due to legal settlements, incentive compensation, and FX impacts; net interest expense rose to $31 million.

• Cash and cash equivalents at quarter-end were $542.4 million; net debt was $2.55 billion with a leverage ratio of 1.25x LTM adjusted EBITDA.

Outlook and guidance

• USDA expects U.S. chicken production to rise 2% in 2026, with Q2 growth forecast at 2.5% and more moderate growth in the second half.

• Full-year CapEx guidance maintained at $900–$950 million; net interest expense expected between $105–$115 million.

• Management expects sufficient liquidity for at least the next twelve months and anticipates more stable earnings as investments mature.

• No significant lingering operational impacts expected from Q1 plant upgrades; Russellville ramp-up ongoing but not expected to materially affect Q2.

• Anticipates continued growth in prepared foods and retail, with innovation and SNAP eligibility for hot rotisserie chicken as potential tailwinds.