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    PPC
    Earnings call· Jun 2026(Q2 FY26)

    PILGRIMS PRIDE Q2 FY26 earnings call PPC

    Jul 30, 2026 Source

    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

    5

    • 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

    5

    • 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

    4
    CategoryTargetConfidence
    U.S. chicken production growth
    around 2.5%
    high materiality
    High
    Full-year net interest expense (excluding early extinguishment)
    $115 million to $120 million
    medium materiality
    High
    Full-year CapEx
    approximately $900 million
    high materiality
    High
    Full-year effective tax rate
    approximately 25%
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    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

    Operational metrics

    38
    Adjusted EBITDA
    $360.0 millionvs $686.9 million Q2 FY25
    Q2 FY26

    Total company adjusted EBITDA.

    Adjusted EBITDA Margin
    7.8%vs 14.4% Q2 FY25
    Q2 FY26

    Total company adjusted EBITDA margin.

    Adjusted EBITDA Margin
    8.7%vs 17.1% Q2 FY25
    Q2 FY26

    U.S. adjusted EBITDA margin.

    Adjusted EBITDA Margin
    7.6%vs 8.2% Q2 FY25
    Q2 FY26

    Europe adjusted EBITDA margin.

    Adjusted EBITDA Margin
    3.9%vs 16.3% Q2 FY25
    Q2 FY26

    Mexico adjusted EBITDA margin.

    Legal settlement expenses
    $136 million
    Q2 FY26

    Primarily due to settlements with parties associated with broilers litigation.

    Asset impairment charge
    $26 million
    Q2 FY26

    Related to the forthcoming shutdown of the Chattanooga harvesting facility.

    Effective tax rate
    39.3%
    Q2 FY26

    Quarterly effective tax rate.

    Net debt
    Less than $2.5 billion
    End of Q2 FY26

    Total net debt at the end of the quarter.

    Leverage ratio
    1.43x
    End of Q2 FY26

    Leverage ratio at the end of the quarter.

    Cash and available credit
    Nearly $1.6 billion
    End of Q2 FY26

    Total cash and available credit at the end of the quarter.

    GAAP net interest expense
    $46.1 million
    Q2 FY26

    GAAP net interest expense for the quarter.

    Net interest expense (excl. early extinguishment)
    $28.5 million
    Q2 FY26

    Net interest expense excluding the loss on early extinguishment of debt.

    CapEx
    $230 million
    Q2 FY26

    Capital expenditure for the second quarter.

    CapEx YTD
    $465 million
    YTD Q2 FY26

    Year-to-date capital expenditure.

    U.S. Ready-to-cook production growth
    4.5%YoY
    Q2 FY26

    Increase in U.S. ready-to-cook production over the same period last year.

    Egg sets growth
    2%YoY
    Q2 FY26

    Increase in egg sets.

    Chick placements growth
    2.4%
    Q2 FY26

    Increase in chick placements.

    Overall net protein availability growth
    2.2%YoY
    FY26

    USDA estimate for overall net protein availability increase.

    U.S. Prepared Foods volume growth
    Nearly 14%YoY
    Q2 FY26

    Year-over-year volume increase in U.S. Prepared Foods.

    Just Bare retail sales growth
    Over 30%YoY
    Q2 FY26

    Increase in retail sales for the Just Bare brand.

    Just Bare market share
    Nearly 15%
    Q2 FY26

    Market share achieved by Just Bare, making it the second largest brand in the category.

    Just Bare retail sales growth vs category average
    6x
    Q2 FY26

    Just Bare retail sales growth compared to the category average.

    Earned media impressions (Just Bare)
    Over 950 million
    Q2 FY26

    Generated through media partnerships and features like 'The Bear'.

    Rollover (Europe) volume growth
    double digits
    Q2 FY26

    Volume growth for the Rollover brand in Europe.

    Mexico Fresh retail branded products volume growth
    Over 30%YoY
    Q2 FY26

    Volume growth for fresh retail branded products in Mexico.

    Mexico Just Bare volume growth
    Over 2.5xYoY
    Q2 FY26

    Volume increase for Just Bare in Mexico.

    Mexico Pilgrim's branded offerings volume growth
    double digit
    Q2 FY26

    Volume growth for Pilgrim's branded offerings across retail and foodservice in Mexico.

    Consumers cutting dining out
    75%
    Q2 FY26

    Percentage of consumers who say they would cut dining out first from their budget.

    Consumers cutting grocery spending
    29%
    Q2 FY26

    Percentage of consumers who say they cut from grocery spending.

    Consumers considering meat non-negotiable
    68%
    Q2 FY26

    Percentage of consumers who say meat is a non-negotiable or important item at retail.

    Foodservice chicken volume growth
    3.4%
    Q2 FY26

    Increase in chicken volume in the foodservice category. Transcript initially stated 3.1% then corrected to 3.4%.

    Retail chicken category volume growth
    2.8%
    Q2 FY26

    Volume growth in the retail chicken category.

    Retail fresh chicken volume growth
    1.8%
    Q2 FY26

    Volume growth in fresh chicken in retail.

    QSR chicken volume growth
    4.1%
    Q2 FY26

    Increase in chicken volume in the QSR segment.

    Noncommercial chicken volume growth
    5.9%
    Q2 FY26

    Increase in chicken volume in the noncommercial foodservice segment.

    Jumbo cutout value decrease
    27%YoY
    Q2 FY26

    Year-over-year decrease in jumbo cutout value, impacting U.S. margins.

    Mexico protein supply increase
    very large increase
    Q2 FY26

    Very large increase in the supply of protein in Mexico due to increased chicken, eggs, and pork imports.

    Industry KPIs

    5
    MetricValueDetails
    Brand platform growthOver 30%%
    Retailer trade negotiation statussecured several promotional events
    Volume mix vs pricing decomposition—
    Elasticity consumer response commentaryresilient
    Category growth benchmark channel shift data—

    Product announcements

    3
    ProductTypeDetails
    Just Bare brand expansionexpansion
    Pilgrim's branded new flavor offeringslaunch
    Just Bare innovation featured on 'The Bear'milestone

    Capital programs

    6
    Russellville plant conversioncompleted

    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 installationcompleted

    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 expansionunderway

    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 planton 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 expansioncompleted

    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

    7
    Increased costs from Middle East conflictQ2 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 MexicoQ2 FY26

    impacted results

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

    Decrease in U.S. jumbo cutout valueQ2 FY26

    27% decrease

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

    Foodservice traffic trendsQ2 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

    5

    U.S. chicken production growth

    H2 FY26
    Current4.5% (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%.

    Q&A highlights

    6

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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%.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.