GREELEY, COLO. — Net income at Pilgrim’s Pride Corp. in the first quarter ended March 27 totaled $280.44 million, equal to $1.15 per share on the common stock, up sharply from $100.21 million, or 41¢ per share, in the same period a year ago. Net sales increased nearly 30%, improving to $4.24 billion from $3.27 billion.
Adjusted earnings per share were $1.18 with adjusted net income at $287.2 million. Adjusted EBITDA was $501.8 million, or an 11.8% margin, 97.7% higher than a year ago.
The strong results boosted the company’s stock price, closing at $29.28 on April 28, up 9.5% from $26.73 on April 27, the day before earnings were announced.
“Throughout the first quarter, we focused on consistent execution of our strategy,” said Fabio Sandri, chief executive officer of Pilgrim’s. “As a result, first quarter net sales increased by almost 30% and adjusted EBITDA nearly doubled from a year ago. Overall, I am very pleased with our team and their ability to navigate through volatile market conditions and grow our business both top and bottom line.”
The company said a diversified portfolio, along with investments in operations, including automation and a focus on service for key customers, continued to improve results and drive further earnings resilience. Foodservice business achieved pre-pandemic sales volumes and retail volumes remained strong.
Margins improved within the commodity large bird deboning business, while facing higher inputs, increased operating costs, and less-than-optimal product mix resulting from ongoing labor shortages in all business segments. Pilgrim’s brands continue to see momentum in the United States as Just Bare was up 49%, Pilgrim’s fully cooked grew over 150%, and e-commerce more than tripled year over year.
“Our US business led the way in performance as our retail demand remained stable and foodservice recovered to pre-COVID levels,” Mr. Sandri said. “Equally important, our momentum in the retail branded business continued as consumer demand remained resilient despite inflationary headwinds. We have continued to improve our operational staffing levels and to provide a better future for our team members through unprecedented wage increases the last two years and significant investments in our communities. Our team successfully managed through difficult circumstances by driving superior service levels to our key customers, improving overall mix, and combating inflation throughout our supply chain.”
Business in Mexico showed steady growth, especially in branded product lines, and profitability followed the normal seasonality of the business, the company said. Business in Europe saw heavy negative impacts caused by ongoing labor shortages, increasing input costs and unprecedented inflation. Live pork operations also were challenged by excess supply conditions throughout Europe. In the United Kingdom, Pilgrim’s is focusing on leveraging the combined strengths of the businesses to drive operational improvements and capture synergies.
“Although our UK and European business has undertaken a variety of steps to improve profitability, we faced weak market conditions and rapid escalation of costs that have diluted efforts to improve margins,” Mr. Sandri added. “The teams are confident in their plans and are working in conjunction with key customers, while leveraging global supply chain partnerships to resume profitable growth.
“Mexico rebounded from the previous quarter as it experienced better-than-expected demand while managing through less than ideal grow out conditions and increasing grain costs. We continue to grow our branded business and invest in capacity expansion.”