Pilgrim’s Pride Reports Second Quarter 2022 Results with $4.63 Billion in Net Sales and Operating Income Margin of 11.1%

 

Source: Pilgrim's Pride Corporation

via Globe Newswire - July 27, 2022

 

GREELEY, Colo., July 27, 2022 (GLOBE NEWSWIRE) -- Pilgrim’s Pride Corporation (NASDAQ: PPC), one of the world's largest poultry producers, reports its second quarter 2022 financial results.

 

Second Quarter Highlights

 

    Net Sales of $4.63 billion, up 27.3% from prior year.

    Consolidated GAAP operating income margin of 11.1% with GAAP operating income margins of 15.6% in U.S., 10.7% in Mexico and 0.6% in Europe.

    GAAP Net Income of $362.0 million and GAAP EPS of $1.50. Adjusted Net Income of $370.7 million or adjusted EPS of $1.54.

    Adjusted EBITDA of $623.3 million, or an 13.5% margin, 67.7% higher than a year ago.

    We are extremely proud of the dedication and outstanding efforts of our global team members, which supported all of our business units’ top line growth through excellent service levels to our Key Customers that drove significant sequential profit improvement for the overall business.

    Our US retail and foodservice business remained resilient despite additional cost recovery from inflationary challenges. Margins improved given enhanced market fundamentals in Big Bird Debone and continued operational improvements.

    Our brand momentum continues throughout US retail as Just Bare® and Pilgrim’s® Prepared products grew over 96% year over year. E-commerce across our US branded portfolio more than doubled.

    Our combined European business drove bottom line improvement from accelerated implementation of operational efficiencies, focus on Key Customer partnerships to recover inflationary costs, and further diversification of product offerings.

    Demand in Mexico was solid and our team’s focus and continued operational improvements overcame seasonal challenges in live operations at our locations.

    Continuing our commitment to corporate responsibility, our Board of Directors has approved the formation of an ESG Committee to further enrich our efforts on environmental, social and governance matters, including our Hometown Strong program and our Net Zero commitment.

    Our liquidity position remains strong with an adjusted EBITDA net leverage ratio at 1.5x.

    In driving for profitable growth, we are committing to an expansion in our fresh operations, a new protein conversion plant, and a new state-of-the-art prepared foods plant.

(Unaudited)

Three Months Ended

 

Six Months Ended

 

June 26, 
2022

 

June 27, 
2021

 

Y/Y Change

 

June 26, 
2022

 

June 27, 
2021

 

Y/Y Change

 

(In millions, except per share and percentages)

Net sales

$

4,631.6

 

 

$

3,637.7

 

 

+27.3%

 

$

8,872.0

 

 

$

6,911.1

 

 

+28.4%

U.S. GAAP EPS

$

1.50

 

 

$

(0.68

)

 

+320.6%

 

$

2.65

 

 

$

(0.27

)

 

NM(2)

Operating income (loss)

$

512.9

 

 

$

(123.1

)

 

+516.7%

 

$

914.9

 

 

$

35.3

 

 

NM(2)

Adjusted EBITDA(1)

$

623.3

 

 

$

371.6

 

 

+67.7%

 

$

1,125.0

 

 

$

625.5

 

 

+79.9%

Adjusted EBITDA margin(1)

 

13.5

%

 

 

10.2

%

 

+3.3pts

 

 

12.7

%

 

 

9.1

%

 

+3.6pts

 

(1) Reconciliations for non-U.S. GAAP measures are provided in subsequent sections within this release.

(2) These Y/Y changes are designated not meaningful (or “NM”) due to significant one-time items recognized in prior year.

 

“Throughout the second quarter, we emphasized discipline and ownership throughout all aspects of our strategy and organization,” said Fabio Sandri, Chief Executive Officer of Pilgrim’s. “As a result, second quarter sales grew over 27% and Adjusted EBITDA was up almost 68% from last year. I am continually impressed with our team’s determination to drive operational excellence to mitigate inflationary headwinds and work with Key Customers to profitably grow our business.

 

“Our results continue to reflect the benefits of our diversified US portfolio. Investments in automation and in our hourly team members and their communities led to significant progress in net staffing levels, enabling our operations to realize the benefits of strong market fundamentals. Moreover, our overall demand in retail and foodservice remained robust given our emphasis on Key Customers and our diversified product portfolio. In addition, our retail branded business maintained its momentum, as Just Bare® and Pilgrim’s® continued their strong growth trajectory.

 

“Our UK and European business continued to recover through enhanced partnerships with Key Customers, improved cost recovery, and accelerated implementation of supply chain solutions. The team will continue to identify ways to leverage our diverse portfolio of offerings and further optimize our production capabilities to alleviate continual cost escalation and consistently innovate to drive profitable growth in a difficult economic environment.

 

“Our Mexican operations were impacted by seasonal diseases that reduced our efficiency on the live production at our locations. Nonetheless, the team leveraged our diverse geographic footprint to ensure sufficient supply, driving superior service for Key Customers. Moving forward, the team will continue to monitor conditions and adjust accordingly to grow the business.

 

“Given our market momentum and focus on profitable growth, we are announcing a number of new investments in the US. These investments include an expansion of our Athens, Georgia facility, which will enhance our service levels and support growth for a Key Customer. It also includes funding for operational excellence improvements via automation throughout our US footprint and construction of a protein conversion plant for pet food ingredients in Georgia. Also, we are committing to the development of a Prepared Foods facility in the Southeast USA to cultivate our branded growth, further diversifying our portfolio. Taken together, these investments will simultaneously enable sufficient capacity for top line growth with our Key Customers, enhance operating margins, create value for our shareholders, and provide opportunities for a better future for our team members.

 

“We remain focused on being the best and most respected company in our industry and I am confident our team will continue to drive disciplined execution of our strategy and cultivate robust growth throughout this volatile environment.”

 

Conference Call Information

 

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, July 28, at 7 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/ppc220728.html

 

You may also reach the pre-registration link by logging in through the investor section of our website at https://ir.pilgrims.com in the “Events & Presentations” section.

 

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.”

 

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.

 

About Pilgrim’s Pride

 

Pilgrim’s employs over 60,000 people and operates protein processing plants and prepared-foods facilities in 14 states, Puerto Rico, Mexico, the U.K, the Republic of Ireland and continental Europe. The Company’s primary distribution is through retailers and foodservice distributors. For more information, please visit www.pilgrims.com.

 

Forward-Looking Statements

 

Statements contained in this press release that state the intentions, plans, hopes, beliefs, anticipations, expectations or predictions of the future of Pilgrim’s Pride Corporation and its management are considered forward-looking statements. Without limiting the foregoing, words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “should,” “targets,” “will” and the negative thereof and similar words and expressions are intended to identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from those projected in such forward-looking statements include: the impact of the COVID-19 pandemic, efforts to contain the pandemic and resulting economic downturn on our operations and financial condition, including the risk that our health and safety measures at Pilgrim’s Pride production facilities will not be effective, the risk that we may be unable to prevent the infection of our employees at these facilities, and the risk that we may need to temporarily close one or more of our production facilities; the risk that we may experience decreased production and sales due to the changing demand for food products; the risk that we may face a significant increase in delayed payments from our customers; and additional risks related to COVID-19 set forth in our most recent Form 10-K and Form 10-Q filed with the SEC; matters affecting the poultry industry generally; the ability to execute the Company’s business plan to achieve desired cost savings and profitability; future pricing for feed ingredients and the Company’s products; outbreaks of avian influenza or other diseases, either in Pilgrim’s Pride’s flocks or elsewhere, affecting its ability to conduct its operations and/or demand for its poultry products; contamination of Pilgrim’s Pride’s products, which has previously and can in the future lead to product liability claims and product recalls; exposure to risks related to product liability, product recalls, property damage and injuries to persons, for which insurance coverage is expensive, limited and potentially inadequate; management of cash resources; restrictions imposed by, and as a result of, Pilgrim’s Pride’s leverage; changes in laws or regulations affecting Pilgrim’s Pride’s operations or the application thereof; new immigration legislation or increased enforcement efforts in connection with existing immigration legislation that cause the costs of doing business to increase, cause Pilgrim’s Pride to change the way in which it does business, or otherwise disrupt its operations; competitive factors and pricing pressures or the loss of one or more of Pilgrim’s Pride’s largest customers; currency exchange rate fluctuations, trade barriers, exchange controls, expropriation and other risks associated with foreign operations; disruptions in international markets and distribution channels, including, but not limited to, the impacts of the Russia-Ukraine conflict; the risk of cyber-attacks, natural disasters, power losses, unauthorized access, telecommunication failures, and other problems on our information systems; and the impact of uncertainties of litigation and other legal matters described in our most recent Form 10-K and Form 10-Q, including the In re Broiler Chicken Antitrust Litigation, as well as other risks described under “Risk Factors” in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and subsequent filings with the Securities and Exchange Commission. The forward-looking statements in this release speak only as of the date hereof, and the Company undertakes no obligation to update any such statement after the date of this release, whether as a result of new information, future developments or otherwise, except as may be required by applicable law.

 

Contact:

 

            Andrew Rojeski

            Head of Strategy, Investor Relations, & Net Zero Programs

            [email protected]

            www.pilgrims.com

 

 

PILGRIM’S PRIDE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

 

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https://www.globenewswire.com/news-release/2022/07/27/2487392/0/en/Pilgrim-s-Pride-Reports-Second-Quarter-2022-Results-with-4-63-Billion-in-Net-Sales-and-Operating-Income-Margin-of-11-1.html