Pilgrim’s Pride looking ahead despite sales dip
In its Q1 results for the 13 weeks to 31 March 2019, the company reported US$2.72bn in net sales, representing an 0.8% year-on-year drop from US$2.7bn in the same period of 2018.
Its operating income was down 32% year-on-year while its adjusted EBITDA was down 24.8%. The business attributed declines to weaker-than-normal markets in Mexico, but remained positive for the second quarter of the year.
It did report a “significant sequential rebound” in US operations compared to Q4, which was driven by “stronger markets as feature activities tracked much closer to seasonality”. When commenting on the US progress, it said: “Our balanced portfolio has continued to evolve, realising the results of investments made over the past few years to further widen our products and brands, strengthen key customer relationships, and improve margin consistency.”
It also expected Europe to continue to be affected by input cost increases and was offsetting the increase through “capture of synergies and adjustments in pricing models”.
Jayson Penn, chief executive officer of Pilgrim's remained positive looking ahead to the rest of the year.
“After a very challenging market in 2018, we experienced a much better environment within our US operations during Q1, particularly in commodity large bird deboning, with demand from retailers and QSR operators rebounding as they recognised the value of chicken,” he said. “Feature activities normalised to seasonal levels throughout the quarter and the momentum has been sustained into early Q2. Commodity boneless prices have already surpassed levels from a year ago and are close to the five-year average, while wing prices are near historical highs. We have been heavily investing in further differentiating our portfolio to increase our capacities and capabilities to meet customer expectations.
He said Pilgrim’s Pride had been in an investment period and the benefits would soon be reaped. “The investments in the operations and the focus of our people have yielded an increase in performance, and further growth prospects remain available. We are driving growth while continuing to pursue future opportunities by intensifying our efforts in innovation and marketing. We expect value-added, differentiated products to account for a larger portion of our total results over the next few years as we continue to reduce the volatility of our commodity sales mix.”
