Pilgrim’s sees US investments as key to growth

GREELEY, COLO. — As part of its second-quarter earnings report, Pilgrim’s Pride Corp. announced that it would be making new investments in the US market.

Fabio Sandri, chief executive officer of Pilgrim’s, said the investments included an expansion of the Athens, Ga., facility which would enhance service levels and support the growth of 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,” he added.

Pilgrim’s also committed to the development of a prepared foods facility in the Southeastern part of the United States.

“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,” Mr. Sandri said.

Net income at Pilgrim’s in the second quarter ended June 26 was $362.12 million, equal to $1.51 per share on the common stock, which compared with a loss of $166.69 million in the same period a year ago.

Net sales in the quarter, meanwhile, increased to $4.63 billion, up 27% from $3.68 billion a year ago.

Operating income was at $512.9 million, which compared with a loss of $123.1 million in 2021. The company, which is majority owned by JBS SA, posted operating income margins of 15.6% in the United States, 0.6% in Europe and 10.7% in Mexico during the second quarter.

“Throughout the second quarter, we emphasized discipline and ownership throughout all aspects of our strategy and organization,” Mr. Sandri said. “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.”

Mr. Sandri noted the US results continue to reflect a 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,” he said. “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.”

In Mexico, sales increased in the second quarter to $486.7 million compared with $453.4 million during the same time period in 2021.

“Our Mexican operations were impacted by seasonal diseases that reduced our efficiency on the live production at our locations,” Mr. Sandri said. “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.”

In Europe, second-quarter sales increased to $1.25 billion, which compared with $935.9 million in the second quarter of 2021.

“Our UK and European business continued to recover through enhanced partnerships with key customers, improved cost recovery, and accelerated implementation of supply chain solutions,” Mr. Sandri said. “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.”