Pilgrim's Pride (PPC) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 2024 reached $4.6 billion, up 5.2% year-over-year, with GAAP net income of $350 million and adjusted net income of $387 million; adjusted EBITDA more than doubled to $660.4 million (14.4% margin), driven by operational excellence and strong demand across U.S., Europe, and Mexico.

• U.S. operations benefited from improved production efficiencies, lower input costs, and robust demand in retail and food service; Europe achieved nearly 40% YoY adjusted EBITDA growth through network optimization and innovation; Mexico outpaced market sales growth but faced profitability pressure from market pricing and currency volatility.

• Operating income for Q3 was $508.4 million (11.1% margin), up 146.3% year-over-year; EPS rose to $1.47 (GAAP) and $1.63 (adjusted).

• Liquidity improved with a net leverage ratio of 0.65x adjusted EBITDA, supporting future growth initiatives.

• Sustainability progress included a 69% improvement in safety and a 17% reduction in Scope 1 and 2 GHG emissions since 2019.

Financial highlights

• Q3 2024 net sales: $4.6 billion (+5.2% YoY); nine months: $13.5 billion (+5.2% YoY).

• Gross profit for Q3: $684 million (14.9% of sales), nearly double the prior year; operating income for Q3: $508.4 million (11.1% margin).

• Adjusted EBITDA for Q3: $660.4 million (14.4% margin); for nine months: $1.69 billion.

• EPS for Q3: $1.47 (GAAP), $1.63 (adjusted); adjusted net income for Q3: $387 million.

• Cash from operations for nine months: $1.64 billion; cash and equivalents at period end: $1.88 billion.

Outlook and guidance

• Management expects continued growth through operational excellence, portfolio diversification, and key customer partnerships, with a focus on branded and prepared foods, innovation, and sustainability.

• Chicken production growth for 2024 projected at 1.7% year-over-year, with balanced supply and demand expected.

• Europe expected to sustain 8.5%-9% adjusted EBITDA margins, supported by consumer confidence and restructuring benefits.

• Mexico anticipated to rebound from seasonal Q3 softness as demand normalizes and economic conditions improve.

• Management expects cash flows from operations and available credit to be sufficient for obligations, working capital, debt maturities, and capital spending for at least the next twelve months.