Pilgrim’s Pride reported a sharp year-over-year decline in third-quarter profit as higher chicken supply weighed on commodity prices. Revenue slipped modestly, while operating income and adjusted EBITDA fell by about half or more. The company said growth in prepared foods and gains in operating efficiency helped offset some of the pressure.
The quarter also featured continued investment in production capacity, progress on a planned European acquisition and a leverage ratio below the company’s stated target range.
Key details
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Revenue and earnings declined: Net sales were $4.65 billion, down 2.2% from a year earlier. GAAP operating income fell 61.1% to $191.5 million, and GAAP earnings per share dropped to 49 cents from $1.44. Net income was $116.3 million; adjusted net income was $117.7 million, with adjusted EPS also at 49 cents.
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Adjusted EBITDA fell 50%: Adjusted EBITDA was $316.3 million, compared with $633.1 million a year earlier. Its margin was 6.8%, down from 13.3%. Regional adjusted EBITDA margins were 6.9% in the U.S., 7.4% in Europe and 4.9% in Mexico.
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Higher U.S. chicken supply pressured commodity prices: The company cited a 2.2% year-over-year increase in U.S. chicken supply, which outpaced demand growth and pushed commodity cutout values lower. Fresh chicken volumes were moderately higher than a year earlier, while Pilgrim’s said its product mix, operational improvements and yield efficiencies helped partly cushion the price pressure.
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Prepared foods was a growth area: U.S. Prepared Foods volumes rose more than 15% from a year earlier, with sales and margins also higher. Just Bare retail sales grew more than 25%; its volume share in frozen fully cooked chicken gained more than 300 basis points. Pilgrim’s also launched Flamin’ Hot-branded products.
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Capacity projects are progressing: Planned downtime at the Ellijay, Georgia, plant affected U.S. Fresh operations as Pilgrim’s invests to expand small-bird deboning. Construction of a new prepared-foods facility in Walker County, Georgia, remains on schedule, with commissioning expected in the second half of 2027.
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Europe saw resilient demand but margin pressure: Sales and volumes increased year over year as shoppers continued to seek affordable poultry and meal options. Inflation and excess pork imports remained challenges. Approval work for the planned acquisition of Walkers Deli & Sausage is progressing, with closing anticipated in early 2027.
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Mexico’s market conditions improved: Pilgrim’s said live-market fundamentals improved from prior quarters, although protein availability remained extensive. Sales benefited from growth in branded fresh retail offerings, which increased more than 40% year over year. The ramp-up in Merida and the Southern Peninsula remains on schedule.
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Leverage remained below the company’s target range: Net leverage was 1.76 times adjusted EBITDA, below Pilgrim’s stated target of 2 to 3 times. The company said it maintained liquidity to support future growth opportunities.
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The company also reported sustainability and safety progress: Since 2019, Pilgrim’s has reduced global Scope 1 and 2 emissions intensity by more than 20%. It said its Global Safety Index improved more than 60% from the prior year and that employees received more than 6 million training hours in 2025.
Plain-English implications
The quarter’s results show how sensitive Pilgrim’s earnings remain to shifts in chicken supply and commodity prices: revenue declined only slightly, but operating income and adjusted EBITDA fell much more sharply. The company’s prepared-foods growth and operational improvements provided partial offsets, while its below-target leverage leaves it with financial capacity for planned investments and growth opportunities.