Inquired about drivers for Australia's margin contraction and the outlook for volatile Brazilian cattle prices.

Gilberto attributed Australia's margin impact to a 15% devaluation of the Aussie dollar, noting strong operations and positive cattle conditions in Queensland. For Brazil, he explained volatility is due to players trying to meet China quotas, expecting prices to decrease after June as quotas are met and harvest volumes reduce. “the only impact of the business. EBITDA remains strong in Queensland that where we have 40% of the cattle herd the conditions, the environment conditions for pesos the best we have seen in the last 3 years.”

Asked about the drivers for Seara's sequential margin decline and the potential impact of lower U.S. beef import tariffs.

Gilberto stated Seara's margin decline was primarily due to a 10% FX impact, with strong underlying sales volume. Guilherme explained that lower U.S. beef tariffs and increased imports would likely be complementary to U.S. production, which focuses on premium cuts, and could help balance the market by providing lean trim. “The only explanation is the FX. If you take the FX that compared to the last -- the quarters, you see the FX, the impact will be around 10%.”

Asked if the Greeley strike impacted Q1 U.S. beef results, the significance of the Mexican border reopening for cattle, and the demand trend for Seara's processed vs. fresh chicken in Brazil.

Guilherme stated the strike had no meaningful impact as volumes were redirected. He emphasized that the Mexican border opening for Friboi cattle would be the most significant short-term relief for U.S. beef supply. Gilberto noted that while overall chicken demand in Brazil was strong, processed products saw strong demand in premium segments but softer in commodity. “Mexico border opening for Friboi cattle, absolutely no question. It's the most important thing that could ever happen in the short term to get this -- to get some sort of relief on the supply side on beef in the U.S.”

JBS

JBS (JBS) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Consumer Staples· May 13, 2026

Source: earnings call transcript

Executive summary

JBS Q1 FY26 — Diversified Platform Navigates Challenging Market with Record Sales

JBS navigated a challenging Q1 FY26 with its diversified global platform, achieving record net sales despite significant headwinds in North American Beef and a higher cash burn. The company focused on operational excellence and cost discipline, while strategic investments in value-added products and balance sheet strengthening position it for improved performance as market conditions normalize. Management remains committed to its long-term leverage target and capital allocation strategy.

Highlights

Achieved record first-quarter net sales of $22 billion, an 11% growth.
Seara delivered a strong EBITDA margin of 15.5% supported by export demand and innovation.
JBS Brazil reported a 4.5% EBITDA margin, its second-highest first-quarter margin in history.
Australia's operations remained positive with a 7.1% margin, benefiting from improved cattle conditions.
Strengthened balance sheet with $2.5 billion bond issuance, extending average debt maturity to 15.6 years.

Concerns

Beef North America reported a negative EBITDA of $230 million with a -2.3% margin due to constrained cattle supply and higher costs.
Free cash flow was negative $1.5 billion, a higher cash burn compared to Q1 2025's $970 million consumption.
Adjusted EBITDA declined by approximately $400 million, reflecting weaker operating results.
Leverage increased to 2.77x net debt to EBITDA, nearing the upper end of the target range.
U.S. Pork experienced a softer quarter impacted by seasonality and plant adjustments, contributing to a $200 million EBITDA impact.

Guidance & targets

Category	Target	Timeline	Confidence
Cash flow breakeven EBITDA	$5.7 billion to $6 billion high materiality	FY26	Medium
Growth CapEx	more than $1 billion medium materiality	Annual · FY26	High
Net Debt to EBITDA	between 2.5 and 3x high materiality	FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Beef North America Impacted by constrained cattle supply and higher costs. Organizational and operational adjustments were advanced to unify business units and improve performance. EBITDA: negative $230 million	—	—	—	-2.3%
Seara Supported by strong export demand, innovation, and growth in value-added products, despite currency pressure and cost inflation. The outlook for poultry in Brazil remains positive.	—	—	—	15.5%
JBS Brazil Second-highest first-quarter margin in history, supported by disciplined commercial execution and favorable demand. Friboi delivered strong top-line performance.	—	—	—	4.5%
Australia Operational performance remained positive. Cattle conditions in Queensland are the best in the last 3 years, reinforcing a positive outlook.	—	—	—	7.1%

JBS operating KPIs by quarter

JBS operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Sep 2025 Q3 FY25	Jun 2026 Q2 FY26	Change vs prior quarter
Employees	280K+ With discipline and that guides our work every day, as we close, I want to express my appreciation to our more than 280,000 team members around the world. Source: earnings call transcript	280K We are fortunate to have an exceptionally strong leadership team and an extraordinary group of 280,000 team members around the world. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Oman acquisition

Acquisition mentioned as an international project, financed locally.

Capital programs

Pures prepared foods facility underway

Located in Walker County, part of expansion CapEx for value-added products.

Key Iowa fully cooked Becle and sausage facility underway

Part of expansion CapEx for value-added products.

Perry Iowa fresh sausage plant underway

Part of expansion CapEx for value-added products.

Cactus Texas beef processing plant modernization underway

Modernization project for beef processing plants.

Greene Colorado beef processing plant modernization underway

Modernization project for beef processing plants.

Paraguay chicken plant underway

International expansion project.

Risks & headwinds

Constrained cattle supply and higher costs in North America Beef Ongoing, expected to be a challenging year (2026).

Negative EBITDA of $230 million, -2.3% margin in Q1 FY26.

Mitigation:Organizational and operational adjustments, unifying business units, focus on efficiency.

Higher cash burn and increased leverage Q1 FY26, with expectation to normalize by year-end.

Free cash flow negative $1.5 billion in Q1 FY26 (vs. $970 million cash consumption in Q1 2025); leverage 2.77x.

Mitigation:Stronger cash generation expected in H2, flexibility with credit lines and cash, monitoring capital allocation.

FX impact on Seara and Australia Q1 FY26.

Seara margin impacted by ~10% FX devaluation; Australia margin impacted by ~15% Aussie dollar devaluation.

Mitigation:Seara's strong export demand and value-added products; Australia's positive operational performance.

Geopolitical disruptions (Middle East) and regulatory scrutiny (EU) for Seara exports Q1 FY26 for Middle East; ongoing for EU.

Additional input costs for logistics due to Middle East disruptions; no quantified impact from EU considerations yet.

Mitigation:Demand in Middle East remains strong, extra costs absorbed by market; Brazil is providing clarifications to EU, confident in compliance.

Grain price volatility and uncertainty FY26-FY27 outlook.

Potential for increased prices due to weather, fertilizer costs.

Mitigation:Well-positioned from a risk management perspective, prepared for potential volatility including reduction in Brazilian safrina crops.

Brazilian cattle price volatility and potential domestic market oversupply After June (post-China quota fulfillment).

Price of cattle expected to decrease after China quota fulfillment, leading to reduced harvest and potential for more volume in domestic market.

Mitigation:JBS Brazil's strong commercial execution, value-added product strategy, and category management in retail.

Q&A highlights

Asked for the breakeven EBITDA, how JBS manages leverage near the 3x limit, and if the U.S. beef business model might change, e.g., vertical integration.

Guilherme estimated breakeven EBITDA for FY26 between $5.7 billion and $6 billion. He explained that JBS manages leverage within 2x-3x, using levers like discount receivables or vendor finance if needed, and expects to end the year within target. Gilberto stated vertical integration in cattle ranching is unrealistic due to specialization and high costs.

“for this year, the breakeven EBITDA, the cash flow breakeven EBITDA will be anything between $5.7 billion and $6 billion.”

asked by Isabella Simonato · answered by Guilherme Cavalcanti

2 min read 6 chapters

Detailed narrative

Market Volatility and Operational Adjustments

JBS experienced a challenging Q1 2026 marked by market volatility, seasonality, and operational disruptions, particularly in North American Beef. The company responded by implementing organizational and operational adjustments across its U.S. beef platform, unifying fed beef, regional beef, and case-ready business units to reduce duplication and improve coordination. These actions aim to enhance efficiency and performance during a difficult cattle cycle.

Diversified Platform Resilience

Despite headwinds, JBS's diversified global platform demonstrated resilience. Seara delivered strong results with a 15.5% EBITDA margin, driven by export demand and value-added products, while JBS Brazil achieved its second-highest first-quarter EBITDA margin of 4.5%. Australia also maintained positive operational performance with a 7.1% margin, benefiting from favorable cattle conditions in Queensland.

Strategic Investments and Efficiency Focus

The company continues to invest in efficiency and long-term value creation, with capital expenditures more than doubling to $566 million, primarily for expansion CapEx of $390 million. Initiatives include piloting AI for decision-making and commercial execution at Friboi and JBS Brazil, and advancing automation at Seara to increase productivity and support higher value-added categories.

Balance Sheet Management and Capital Allocation

JBS strengthened its balance sheet by issuing $2.5 billion in bonds and tendering $1.45 billion, extending its average debt maturity to 15.6 years. While leverage increased to 2.77x, the company aims to remain within its 2x to 3x net debt to EBITDA target range by year-end, leveraging strong second-half cash generation and maintaining flexibility with $3.4 billion in credit lines and $3.5 billion in cash.

U.S. Beef Outlook and Industry Dynamics

The U.S. beef business faces prolonged challenges due to constrained cattle supply and high costs, with Q1 EBITDA being negative $230 million. Management does not foresee vertical integration into cattle ranching as a realistic solution but emphasizes internal operational improvements. The potential reopening of the Mexican border for Friboi cattle is highlighted as the most significant short-term relief for U.S. supply.

Global Protein Trends and Product Innovation

JBS observes strong global demand for protein, influenced by factors like GLP-1 adoption and a broader understanding of protein's health benefits. The company is adapting its portfolio to this structural trend, accelerating innovation in high-protein and value-added products, and investing in prepared foods to capitalize on stable demand and higher margins.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.