Pilgrim's Pride (PPC) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Jul 30, 2026

Source: earnings call transcript

Executive summary

Pilgrim's Pride Q2 FY26 — Strong Demand Amidst Supply Volatility and Strategic Investments

Pilgrim's Pride navigated a volatile Q2 FY26 with firm chicken demand across all regions, despite increased supply in the U.S. and Mexico. Strategic investments in prepared foods and operational efficiencies are strengthening the portfolio and mitigating commodity market volatility, while the company continues to adapt to evolving consumer behaviors and competitive pressures in key markets.

Highlights

Reported net revenues of $4.63 billion for Q2 FY26.
Achieved adjusted EBITDA of $360 million for Q2 FY26.
U.S. Prepared Foods volumes increased nearly 14% year-over-year.
Just Bare retail sales increased over 30%, achieving nearly 15% market share in frozen fully cooked.
Mexico retail branded products volumes grew over 30% compared to last year.

Concerns

Adjusted EBITDA margin compressed to 7.8% in Q2 FY26 from 14.4% last year.
U.S. adjusted EBITDA declined to $231.5 million from $482.7 million last year, primarily due to a 27% decrease in jumbo cutout value.
Mexico adjusted EBITDA declined to $22.6 million from $92.3 million last year, impacted by increased supply and lower-priced competing proteins.
Incurred legal settlement expenses of $136 million in the quarter.
Took a $26 million charge for asset impairment related to the Chattanooga facility shutdown.

Guidance & targets

Category	Target	Timeline	Confidence
U.S. chicken production growth	around 2.5% high materiality	H2 FY26	High
Full-year net interest expense (excluding early extinguishment)	$115 million to $120 million medium materiality	FY26	High
Full-year CapEx	approximately $900 million high materiality	FY26	High
Full-year effective tax rate	approximately 25% medium materiality	FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Total Company Net revenues were $4.63 billion versus $4.76 billion a year ago. Adjusted EBITDA was $360.0 million compared to $686.9 million last year, with a margin of 7.8% compared to 14.4% last year. Adjusted EBITDA Margin: 7.8%	$4.63 billion	—	—	$360.0 million Adjusted EBITDA
U.S. Net revenues were $2.65 billion versus $2.82 billion a year ago. Adjusted EBITDA came in at $231.5 million compared to $482.7 million last year, with margins of 8.7% compared to 17.1% last year. Margins declined year-over-year primarily due to a 27% decrease in jumbo cutout value but improved sequentially. U.S. Prepared Foods continues to demonstrate robust growth with year-over-year volumes increasing nearly 14%. Adjusted EBITDA Margin: 8.7%Prepared Foods Volume Growth: Nearly 14%	$2.65 billion	—	—	$231.5 million Adjusted EBITDA
Europe Adjusted EBITDA was $105.8 million versus $111.8 million last year, with margins of 7.6% compared to 8.2% last year. The business benefited from strength in poultry and meals offerings, along with structural reorganization benefits. This helped compensate for pressured pork margins due to higher European imports in the U.K., increased costs from the Middle East conflict, and decreases in foodservice traffic. Adjusted EBITDA Margin: 7.6%	—	—	—	$105.8 million Adjusted EBITDA
Mexico Adjusted EBITDA was $22.6 million compared to $92.3 million last year, with margins of 3.9% versus 16.3% last year. Results were impacted by year-over-year changes in bird growing conditions, increasing supply in the live markets, and lower-priced competing proteins. Fresh retail branded products grew over 30% compared to last year. Adjusted EBITDA Margin: 3.9%Fresh Retail Branded Products Volume Growth: Over 30%	—	—	—	$22.6 million Adjusted EBITDA

Product announcements

Product	Type	Timeline
Just Bare brand expansion	expansion	—
Pilgrim's branded new flavor offerings	launch	—
Just Bare innovation featured on 'The Bear'	milestone	—

Capital programs

Russellville plant conversion completed

Benefit:further strengthen key customer partnerships, enhance profitability

Investment in converting the plant in Russellville to a case-ready operation was completed as planned.

Dark meat deboning and portioning equipment installation completed

Benefit:improve sales mix, enhance profitability

Installation of dark meat deboning and portioning equipment in several big bird plants to improve sales mix.

Ellijay, Georgia expansion underway

Benefit:expand production and do more deboning of small birds, align portfolio to fast growing boneless chicken categories (chicken sandwich and tenders)

Investments in Ellijay, Georgia to expand production and enhance mix in support of key customers in the foodservice space.

Walker County, Georgia prepared foods plant on track

Benefit:further support growth

Investment in the Walker County, Georgia plant to further support growth remains on track with commissions slated for the second half of 2027.

Porvenir prepared line expansion completed

Benefit:drive sales growth and reduce volatility of portfolio

Expansion of the prepared line at Porvenir was completed and started production as scheduled.

Southern Peninsula live investments (Mexico) on track

Benefit:grow geographical diversification

Investments in live operations in the Southern Peninsula are on track and ramp-up continues.

Risks & headwinds

Increased costs from Middle East conflict Q2 FY26, ongoing

increased costs, elevated prices, higher risk premiums

Mitigation:comprehensive inland transportation network (exports), pricing arrangements for customer-specific offerings (Europe)

Competition from imported pork into U.K. Q2 FY26, ongoing

compressed margins, pressured pork margins

Mitigation:expected herd reduction in other countries, less imports of pork cuts into the U.K.

Increased supply in Mexico Q2 FY26

impacted results

Mitigation:strategy of growing in Mexico, building 2 complexes, investing in brands and prepared foods

Decrease in U.S. jumbo cutout value Q2 FY26

27% decrease

Mitigation:diversified portfolio prepared to manage counter-seasonal declines, enhancing profitability

Foodservice traffic trends Q2 FY26, ongoing

declines in store visits, lower volumes and sales

Mitigation:working with foodservice providers to expand value-focused offerings, using chicken for promotional activities

Avian Influenza ban (China) ongoing

17 states released (positive, but remaining ban is a risk)

Mitigation:further meetings scheduled later in the year for additional state releases and Phase 1 agreement resumption

Black Sea shipments concerns (wheat prices) later this year

increase in price (directional)

What to watch in Q3 FY26

U.S. chicken production growth

H2 FY26

Current 4.5% (Q2 FY26)

Target ~2.5%

Why it matters

Verifies USDA/management expectation of moderation, impacting supply/demand balance and pricing.

USDA anticipates chicken production growth to slow down in the second half of the year to around 2.5%, closing the year at 3.3%.

Find out whether PPC delivers this. Inve re-checks your case every morning.

Q&A highlights

How will the expected slowdown in U.S. supply growth in H2 impact cutout values and profitability, especially given current low levels for tenders?

Fabio explained that Q2's 4.5% supply growth was due to unexpectedly high livability. H2 growth is expected to moderate to 2.5% due to stable breeding flock numbers, less impact from livability, and warm weather. Demand remains strong, driven by chicken's affordability in retail and its use in foodservice promotions. Specific cuts like wings are expected to rebound, and boneless breast demand is supported by a wide price delta to ground beef and increasing retail promotions.

“I think what was different this quarter is that we saw an improvement in the growing conditions of the birds, and the livability was significantly better than last year.”

asked by Ben Theurer · answered by Fabio Sandri

2 min read 6 chapters

Detailed narrative

U.S. Market Dynamics

Chicken demand remained firm in the U.S. across both retail and foodservice channels, with volumes increasing. Boneless skinless breast volumes saw year-over-year growth due to steady pricing and a record-high spread against ground beef. Boneless skinless dark meat continued its strong growth trend, while prepared chicken categories, particularly Just Bare, demonstrated significant traction and consumer acceptance.

International Market Performance

In Europe, poultry and ready meals drove sales growth, resonating with value-conscious consumers. However, margins were compressed due to increased competition from imported pork into the U.K. and higher costs linked to the Middle East conflict. Mexico experienced a counter-seasonal positive growing environment, leading to expanded production. Despite increased supply, strong chicken demand absorbed the additional volume, with branded fresh products growing over 30%.

Supply and Feed Outlook

U.S. ready-to-cook production increased 4.5% in Q2 FY26, driven by higher headcount and improved livability. The USDA anticipates this growth to moderate to around 2.5% in the second half of the year, closing FY26 at 3.3%. Feed markets, including corn and soy, experienced volatility influenced by geopolitical events and U.S. planting weather, with potential for risk premiums to emerge.

Strategic Investments and Portfolio Diversification

Pilgrim's Pride completed the conversion of its Russellville plant to a case-ready operation and installed dark meat deboning and portioning equipment in several big bird plants, enhancing profitability and sales mix. Further investments are underway in Ellijay, Georgia, to expand small bird deboning capacity, aligning the portfolio with fast-growing boneless chicken categories. The new prepared foods plant in Walker County, Georgia, remains on track for commissioning in H2 2027.

Brand Momentum and Innovation

The Just Bare brand achieved significant success, with retail sales increasing over 30% year-over-year and capturing nearly 15% market share in the frozen fully cooked category. The brand received recognition for its taste and quality, and the company is expanding its presence through new flavor offerings and media partnerships, including a feature on 'The Bear,' generating over 950 million earned media impressions.

Sustainability and Team Member Focus

The company continues to prioritize environmental, social, and governance (ESG) initiatives, with a strong focus on team member development and retention. These efforts have led to recognition for workplace satisfaction across multiple publications, including Newsweek in the U.S., The Grocer in Europe, and the Institute for Promotional Quality in Mexico.

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