Pilgrim’s Pride Corporation (NASDAQ: PPC) reports third quarter 2019 financial results.
Third Quarter Highlights
- Net Sales of $2.78 billion.
- Net Income of $109.8 million.
- Operating Income margins of 6.5% in U.S., 11.5% in Mexico and 4.9% in Europe operations, respectively.
- Adjusted EBITDA of $258.4 million (or a 9.3% margin), and Adjusted EPS of $0.45.
- U.S portfolio generated an improved performance due to our differentiated strategy. Demand in less commoditized segment remained strong while pure commodity was significantly better year on year but weaker than last quarter. We continue to evolve our well-balanced portfolio to further differentiate our products and brands, strengthen Key Customer relationships, and deliver operational improvements.
- Q3 in Mexico was in-line with normal seasonality and stronger than last year. Growth in our branded products and prepared foods continue to create portfolio differentiation in the region.
- European operations continuing to mitigate the impact of input cost challenges and already achieved better results than last year. Addition of Tulip team will further enhance our position as a leading global player by expanding our portfolio of prepared foods and brands in the UK, and present opportunities for synergies.
|Unaudited, In Millions, Except Per Share and Percentages|
|Sep 29, 2019||Sep 30, 2018||Y/Y
|Sep 29, 2019||Sep 30, 2018||Y/Y
|Adjusted EBITDA (1)||$258.4||$156.0||+65.6%||$812.2||$687.1||+18.2%|
|Adjusted EBITDA Margin (1)||9.3%||5.8%||+3.5pts||9.7%||8.3%||+1.4pts|
|(1) Reconciliations for non-GAAP measures are provided in subsequent sections within this release.|
“After a challenging Q3 2018 within the U.S. pure commodity market, conditions during Q3 of this year were much improved. The environment in non-commodity chicken was in-line with seasonality and remained strong, driven by demand from retailers and QSRs. We remain committed to our Key Customer strategy, which is the basis for our growth. Revenues from Key Customers have more than doubled over the past eight years, and we will continue to support their growth. We are investing to further differentiate our portfolio, and increase our capacities and capabilities to meet customer expectations. We expect value added, differentiated products to account for a significantly larger portion of our total results over the next few years as we continue to reduce our mix of more volatile commodity sales and improve our margin profile,” stated Jayson Penn, Chief Executive Officer of Pilgrim’s.
“Mexico was in-line with normal seasonality and significantly better than last year. We expect to generate improved performance for the remainder of 2019 as demand continues to grow. Our Prepared Foods have continued to increase at a double digit rate and are generating great results under both premium Pilgrim’s and Del Dia brands to drive the evolution of our Mexican portfolio towards more differentiated, higher-value products and margin expansion.”
“Our European operations have continued to make progress in mitigating input cost challenges, and are already generating better results throughout Q3. Despite seasonally cooler weather, improvements in operational efficiencies, and better integration of input costs into customer pricing models drove the improvement in performance. We expect a continuation of the momentum into Q4.”
“The addition of the Tulip team further enhances our position as a leading global player by expanding our portfolio of prepared foods and brands while strengthening our leadership position in the UK market. It aligns with our strategic priorities as we continue growing our geographical footprint and extending our global reach into attractive new markets.”
Conference Call Information
A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, October 31, at 7:00 a.m. MT (9 a.m. ET). Participants are encouraged to pre-register for the conference call using the link below. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time.
To pre-register, go to: https://services.choruscall.com/links/ppc191031.html
You may also reach the pre-registration link by logging in through the investor section of our website at www.pilgrims.com and clicking on the link under “Upcoming Events.”
For those who would like to join the call but have not pre-registered, access is available by dialing +1 (844) 883-3889 within the US, or +1 (412) 317-9245 internationally, and requesting the “Pilgrim’s Pride Conference.” Please note that to submit a question to management during the call, you must be logged in via telephone.
Replays of the conference call will be available on Pilgrim’s website approximately two hours after the call concludes and can be accessed through the “Investor” section of www.pilgrims.com. The webcast will be available for replay through February 1, 2020.
About Pilgrim’s Pride
Pilgrim’s employs approximately 58,850 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico, Mexico, the U.K, Ireland and continental Europe. The Company’s primary distribution is through retailers and foodservice distributors. For more information, please visit www.pilgrims.com.