Pilgrim’s sees third-quarter growth on consumer demand at the grocery store
GREELEY — Pilgrim’s Pride Corp. (Nasdaq: PPC) recorded increased earnings and margins in the third quarter in the United States, due in small part to how inflation is pinching consumers’ budgets, company leaders reported this week.
In its third-quarter 2024 earnings release, the company reported overall earnings before interest, taxes, depreciation and amortization of $660.4 million, with a profit margin of 14.4%. In the U.S. alone, adjusted EBITDA earnings came in at $499.4 million, with an 18% profit margin, compared with $174.1 million with a 7% profit margin at the same time last year. Adjusted European margins came in at 8.6% versus 6.1% at the same time last year, while its Mexico operation’s adjusted margins were 9.7% versus 12.4% last year.
“With inflation still a major concern, consumers continue to shift shopping toward retail and eating patterns in foodservice,” Fabio Sandri, president and CEO of Pilgrim’s, said in an earnings call this week, transcribed by Seeking Alpha. “Chicken demand in the retail channel improved volume across all departments. In fresh, consumers continue to rely on chicken fulfilling their everyday center of the plate protein needs in a challenging environment as volume rose in both white and dark meat cuts.”
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Sandri reported that consumers fueled growth in both deli and frozen segments as well.
“I think as consumers try to stretch their budgets and less trips to the foodservice, there is a component of the retail that is winning, which is the deli segment,” Sandri said on the call. “I think if you look at the numbers in deli, the volumes are up close to 6% year-over-year. Our key customers are actually growing faster than that category with close to 14%.”
But food service, while not fully coming back to pre-COVID levels, saw some improvement, mostly led by quick-service restaurants, “suggesting consumers continue to seek more affordable meals,” Sandri said.
“Consumers are becoming increasingly interested in food away-from-home options, as average spend, frequency per week and participation rates have all increased over past years,” Sandri said.
Sandri reported that while avian flu has made a comeback, it has not hit states in which Pilgrim’s operates. Back-to-back hurricanes in the Southeast, as well, have not had much of an impact on operations, though Hurricane Helene did disrupt many of its Georgia growing operations.
During the quarter, the company reported that it introduced 280 new products; focused on sustainability with its global operations now using 14% renewable electricity; and more than 1,500 team members have signed up for the company’s Better Futures program, which gives employees free tuition when they enroll in community college.
