Pilgrim's Pride Corporation (PPC) Bundle
A Brief History of Pilgrim's Pride Corporation
Pilgrim's Pride Corporation (PPC), a leading player in the poultry industry, has undergone significant transformations over the years, particularly as of 2024. Founded in 1946, the company has expanded its operations across the United States, Mexico, and Europe, focusing on producing high-quality chicken products.
Financial Performance in 2024
As of September 29, 2024, Pilgrim's Pride reported net sales of $13.51 billion, reflecting a 5.2% increase from the $12.83 billion recorded in the same period of 2023. The breakdown of net sales by region is as follows:
| Region | Net Sales (in thousands) | Change from 2023 (in thousands) | Percentage Change |
|---|---|---|---|
| U.S. | $8,016,688 | $649,595 | 8.8% |
| Europe | $3,877,571 | $15,352 | 0.4% |
| Mexico | $1,611,968 | $7,365 | 0.5% |
| Total | $13,506,227 | $672,312 | 5.2% |
The increase in sales was primarily driven by higher sales volume and improved pricing conditions in the U.S. market, where average commodity chicken prices were notably above both prior year levels and the historical five-year average.
Operating Income and Expenses
For the nine months ended September 29, 2024, operating income surged to $1.20 billion, a remarkable increase of 254.9% compared to $338 million in the same period of 2023. The components of operating income are detailed below:
| Component | Amount (in thousands) | Change from 2023 (in thousands) | Percentage Change |
|---|---|---|---|
| Gross Profit | $1,759,505 | $962,151 | 120.7% |
| SG&A Expense | $478,017 | $57,334 | 13.6% |
| Restructuring Activities | $82,070 | $43,386 | 112.2% |
Market Dynamics and Commodity Prices
The poultry market has experienced fluctuations in commodity prices, impacting production costs. For instance, corn prices dropped approximately 28% year-over-year, while soybean meal prices decreased by 23%. These reductions contributed to a decline in cost of sales, which totaled $11.75 billion for the nine months ended September 29, 2024, down by 2.4% from the previous year.
Cash Flow and Liquidity
Pilgrim's Pride reported cash flows from operating activities of $1.64 billion for the nine months ending September 29, 2024, a significant increase from $399.6 million in the comparable period of 2023. This improvement was primarily driven by higher net income and adjustments for noncash expenses.
| Cash Flow Component | Amount (in millions) | Change from 2023 (in millions) |
|---|---|---|
| Net Income | $851.5 | $663.4 |
| Net Noncash Expenses | $398.4 | $129.0 |
| Total Cash Provided | $1,640.8 | $1,241.2 |
Future Outlook
Looking ahead, Pilgrim's Pride is focusing on efficiency improvements and cost management strategies to enhance profitability amid fluctuating commodity prices and competitive market conditions. The company's proactive measures, including hedging against commodity price risks, are expected to bolster its financial stability moving forward.
A Who Owns Pilgrim's Pride Corporation (PPC)
Ownership Structure
As of 2024, Pilgrim's Pride Corporation (PPC) is primarily owned by JBS S.A., which holds a significant majority of the company's shares.
| Owner | Ownership Percentage | Type of Ownership |
|---|---|---|
| JBS S.A. | 82.4% | Indirectly through subsidiaries |
| Public Shareholders | 17.6% | Common stock |
Financial Overview
Pilgrim's Pride has reported substantial financial performance metrics in 2024. The net income attributable to Pilgrim's Pride for the nine months ended September 29, 2024, was approximately $850.6 million, translating to a net income per diluted share of $3.58.
| Financial Metric | Amount |
|---|---|
| Net Sales | $13.5 billion |
| Gross Profit | $1.8 billion |
| Operating Income | $1.2 billion |
| Cash Provided by Operating Activities | $1.6 billion |
| EBITDA | $1.5 billion |
Recent Shareholder Activities
Pilgrim's Pride has been active in managing its capital structure and shareholder returns. The company has initiated a bond repurchase program, approving up to $200 million to repurchase its outstanding senior notes. As of September 29, 2024, it had repurchased a total of $150.5 million in senior notes.
Market Position
As one of the largest chicken producers in the world, Pilgrim's Pride operates in various regions including the U.S., U.K., Mexico, and several European countries. The company employs approximately 62,000 individuals and has a processing capacity of about 41.8 million birds per week.
| Operational Metrics | Value |
|---|---|
| Employees | 62,000 |
| Processing Capacity (birds/week) | 41.8 million |
| Processing Capacity (pigs/week) | 42,750 |
Pilgrim's Pride Corporation (PPC) Mission Statement
Pilgrim's Pride Corporation (PPC) is committed to delivering high-quality, affordable food products to its customers while maintaining a strong focus on sustainability and community engagement. The mission emphasizes the importance of integrity, responsibility, and respect for all stakeholders, including employees, customers, and the environment.
Core Values
- Integrity: Upholding ethical standards in all business practices.
- Responsibility: Committed to sustainable practices and minimizing environmental impact.
- Respect: Valuing employees, customers, and communities in which they operate.
Financial Overview
As of September 29, 2024, Pilgrim's Pride reported significant financial growth, with net sales reaching $13.5 billion, an increase of $672.3 million, or 5.2%, compared to the same period in 2023. The breakdown of net sales by segment is as follows:
| Segment | Net Sales (in thousands) | Change from Previous Year (in thousands) | Percentage Change |
|---|---|---|---|
| U.S. | $8,016,688 | $649,595 | 8.8% |
| Europe | $3,877,571 | $15,352 | 0.4% |
| Mexico | $1,611,968 | $7,365 | 0.5% |
| Total | $13,506,227 | $672,312 | 5.2% |
Cost of Sales
The total cost of sales for the nine months ended September 29, 2024, was $11.7 billion, reflecting a decrease of $289.8 million, or 2.4% from the previous year. The cost breakdown by segment is as follows:
| Segment | Cost of Sales (in thousands) | Change from Previous Year (in thousands) | Percentage Change |
|---|---|---|---|
| U.S. | $6,834,091 | $(209,912) | (3.0)% |
| Europe | $3,539,695 | $(55,356) | (1.5)% |
| Mexico | $1,372,936 | $(24,358) | (1.7)% |
| Total | $11,746,722 | $(289,839) | (2.4)% |
Operating Income
Pilgrim's Pride reported operating income of $1.2 billion for the nine months ended September 29, 2024, which is an increase of $861.4 million, or 254.9%, from the prior year. The sources of operating income are detailed below:
| Segment | Operating Income (in thousands) | Change from Previous Year (in thousands) | Percentage Change |
|---|---|---|---|
| U.S. | $907,249 | $796,708 | 720.7% |
| Europe | $100,710 | $30,127 | 42.7% |
| Mexico | $191,459 | $34,383 | 21.9% |
| Total | $1,199,418 | $861,431 | 254.9% |
Net Income
For the nine months ended September 29, 2024, Pilgrim's Pride reported a net income of $851.5 million, compared to $188.1 million for the same period in 2023. The net income attributable to Pilgrim's Pride Corporation was $850.6 million, an increase of $663.7 million, or 354.1%.
Shareholder Information
The weighted average shares of Pilgrim’s Pride common stock outstanding for the nine months ended September 29, 2024, were:
| Type of Shares | Number of Shares Outstanding |
|---|---|
| Basic | 236,953 |
| Diluted | 237,686 |
The net income per share attributable to Pilgrim's Pride Corporation for the nine months ended September 29, 2024, was:
| Type | Net Income Per Share |
|---|---|
| Basic | $3.59 |
| Diluted | $3.58 |
Conclusion
Overall, Pilgrim's Pride Corporation has demonstrated robust growth in 2024, emphasizing its commitment to quality and sustainability while achieving significant financial milestones.
How Pilgrim's Pride Corporation (PPC) Works
Company Overview
Pilgrim's Pride Corporation is one of the largest chicken producers globally, with operations in the United States, Mexico, and Europe. The company is a significant player in the poultry market, with a focus on producing and marketing chicken products for retail and foodservice customers.
Financial Performance
As of the nine months ended September 29, 2024, Pilgrim's Pride reported a net income of $851.5 million, or $3.58 per diluted share, compared to $188.1 million, or $0.79 per diluted share for the same period in 2023. The company generated net sales of $13.5 billion, with a gross profit of $1.8 billion.
| Financial Metrics | 2024 (Nine Months Ended) | 2023 (Nine Months Ended) |
|---|---|---|
| Net Income | $851.5 million | $188.1 million |
| Net Sales | $13.5 billion | $12.8 billion |
| Gross Profit | $1.8 billion | $797.4 million |
| Operating Income | $1.2 billion | $337.5 million |
| EBITDA | $1.5 billion | N/A |
Segment Performance
Pilgrim's Pride operates through three main geographic segments: U.S., Europe, and Mexico. The performance of these segments for the nine months ended September 29, 2024, is as follows:
| Segment | Net Sales (in millions) | Gross Profit (in millions) | Operating Income (in millions) |
|---|---|---|---|
| U.S. | $8,016.7 | $1,182.6 | $907.2 |
| Europe | $3,877.6 | $337.9 | $100.7 |
| Mexico | $1,611.9 | $239.0 | $191.5 |
Cost of Sales
The total cost of sales for the nine months ended September 29, 2024, amounted to $11.7 billion, with a breakdown by segment as follows:
| Segment | Cost of Sales (in millions) |
|---|---|
| U.S. | $6,834.1 |
| Europe | $3,539.7 |
| Mexico | $1,372.9 |
Cash Flow and Investments
Pilgrim's Pride reported cash provided by operating activities of $1.64 billion for the nine months ended September 29, 2024. Cash flows from investing activities resulted in a net outflow of $307.2 million, primarily due to property, plant, and equipment acquisitions.
| Cash Flow Metrics | 2024 (Nine Months Ended) |
|---|---|
| Cash Provided by Operating Activities | $1.64 billion |
| Cash Used in Investing Activities | $(307.2 million) |
| Cash Provided by Financing Activities | $(151.7 million) |
Market Conditions and Risks
The company faces various market risks, including fluctuations in commodity prices, foreign currency exchange rates, and interest rates. For instance, a 10% increase in feed ingredient prices could have significant impacts on cost structures.
Recent Developments
In the third quarter of 2024, Pilgrim's Pride incurred restructuring charges of $30.8 million primarily related to severance and asset impairment in its European operations. This reflects ongoing adjustments to optimize operational efficiency amid changing market dynamics.
How Pilgrim's Pride Corporation (PPC) Makes Money
Revenue Streams
Pilgrim's Pride Corporation generates revenue primarily through the sale of chicken products across various segments including the U.S., Europe, and Mexico. For the nine months ended September 29, 2024, the company reported total net sales of $13.5 billion, an increase of 5.2% compared to the previous year.
| Region | Net Sales (in thousands) | Change from Previous Year | Percentage Change |
|---|---|---|---|
| U.S. | $8,016,688 | $649,595 | 8.8% |
| Europe | $3,877,571 | $15,352 | 0.4% |
| Mexico | $1,611,968 | $7,365 | 0.5% |
| Total | $13,506,227 | $672,312 | 5.2% |
Cost of Sales
The total cost of sales for the nine months ended September 29, 2024, was $11.7 billion, reflecting a decrease of 2.4% from the previous year. This reduction is mainly attributed to declining feed ingredient costs, specifically corn and soybean meal.
| Region | Cost of Sales (in thousands) | Change from Previous Year | Percentage Change |
|---|---|---|---|
| U.S. | $6,834,091 | $(209,912) | (3.0%) |
| Europe | $3,539,695 | $(55,356) | (1.5%) |
| Mexico | $1,372,936 | $(24,358) | (1.7%) |
| Total | $11,746,722 | $(289,839) | (2.4%) |
Gross Profit
For the same period, Pilgrim's Pride reported a gross profit of $1.76 billion, indicating a significant increase of 120.7% year-over-year.
| Metric | Amount (in thousands) | Change from Previous Year | Percentage Change |
|---|---|---|---|
| Gross Profit | $1,759,505 | $962,151 | 120.7% |
Operating Income
The company achieved an operating income of $1.2 billion for the nine months ended September 29, 2024, representing a substantial increase of 254.9% from the previous year.
| Metric | Amount (in thousands) | Change from Previous Year | Percentage Change |
|---|---|---|---|
| Operating Income | $1,199,418 | $861,431 | 254.9% |
Net Income
Pilgrim's Pride reported net income attributable to the company of $850.6 million for the nine months ending September 29, 2024, with earnings per share of $3.58.
| Metric | Amount (in thousands) | Change from Previous Year |
|---|---|---|
| Net Income | $850,584 | $663,663 |
| Earnings Per Share | $3.58 | $2.79 |
Sales Channels
The company’s sales are divided among various channels, including retail, foodservice, and export. The breakdown for the three months ended September 29, 2024, is as follows:
| Channel | Net Sales (in thousands) |
|---|---|
| Retail | $2,426,111 |
| Foodservice | $1,526,219 |
| Export | $245,556 |
| Other | $387,093 |
| Total | $4,584,979 |
Conclusion on Cost Efficiency
Pilgrim's Pride has successfully managed to reduce its cost of sales, resulting in improved margins and profitability. The company continues to focus on optimizing operations and controlling input costs in order to sustain its financial performance.
Overall, Pilgrim's Pride Corporation's diverse revenue streams, strategic cost management, and significant market presence enable it to maintain a competitive edge in the poultry industry.
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Article updated on 8 Nov 2024
Resources:
- Pilgrim's Pride Corporation (PPC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Pilgrim's Pride Corporation (PPC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Pilgrim's Pride Corporation (PPC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.