Pilgrim's Pride's (PPC) Q2 Earnings Top Estimates, Decline Y/Y
Pilgrim’s Pride Corporation PPC reported second-quarter 2023 results, with both the top line and the bottom line deteriorating from the year-ago quarter’s level. Nevertheless, the company’s earnings surpassed the Zacks Consensus Estimate.
Pilgrim’s Pride has been bearing the brunt of persistent inflation and issues related to protein availability. That said, the company’s portfolio diversification strategies, operational excellence, higher attribute programs and branded offerings and Key Customer partnerships have been driving growth. The company is on track with expansion projects with the Athens, Georgia facility and protein conversion plant in South Georgia ready to start full operations by the beginning of 2024.
Q2 in Detail
The company reported adjusted earnings of 44 cents a share, surpassing the Zacks Consensus Estimate of 28 cents. However, the bottom line deteriorated from earnings of $1.54 per share reported in the year-ago quarter.
The producer, marketer and distributor of fresh, frozen and value-added chicken and pork products generated net sales of $4,308.1 million, which declined 7% from the year-ago quarter’s level. Net sales fell in the U.S. operations with challenges in the commodity segment.
Pilgrim's Pride Corporation Price, Consensus and EPS Surprise
Pilgrim's Pride Corporation price-consensus-eps-surprise-chart | Pilgrim's Pride Corporation Quote
Net sales in the U.S. operations were $2,446.2 million, down from $2,899.9 million reported in the year-ago quarter. Management highlighted that diversification in bird sizes and operational excellence initiatives led to margin growth in the U.S. Fresh business amid persistent challenges in the commodity Big Bird business. The company saw momentum for branded fully-cooked products like Just Bare and Pilgrim’s, which collectively grew more than 56% year over year, with upside in the e-commerce channel.
Mexico operations generated net sales of $551.1 million in the reported quarter, up from $486.7 million in the prior-year quarter. Pilgrim's Pride’s Mexico business witnessed improved performance as supply and demand fundamentals became more balanced and challenges from live operations reduced. The company also expanded its value-added programs and brands.
Net sales from U.K. and Europe operations rose to $1,310.8 million in the quarter under review from $1,245.1 million in the prior year. The company’s U.K. and Europe businesses gained from margin growth on continued manufacturing network optimization program, strength in Key Customers and synergies from back-office integration.
Pilgrim's Pride’s cost of sales increased to $4,029.7 million from $3,954.9 million reported in the year-ago quarter. Gross profit slumped to $278.4 million from $676.8 million. Adjusted EBITDA of $248.7 million declined from $623.3 million reported in the year-ago quarter. Adjusted EBITDA margin of 5.8% contracted from 13.5% reported in the year-ago quarter.
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Other Financial Details
This Zacks Rank #3 (Hold) company ended the quarter with cash and cash equivalents of almost $731 million, long-term debt (less current maturities) of $3,699.6 million and total shareholders’ equity of $3,072.6 million. The company provided $89.3 million of cash from operating activities for six months ended Jun 25, 2023.
Shares of Pilgrim's Pride have increased 6% in the past three months against the industry’s 5.7% decline.
Some Better-Ranked Staple Bets
Here we have highlighted three better-ranked stocks, namely TreeHouse Foods, Inc. THS, Celsius Holdings CELH and McCormick & Company, Incorporated MKC.
TreeHouse Foods, a manufacturer of packaged foods and beverages, currently sports a Zacks Rank #1 (Strong Buy). THS has a trailing four-quarter earnings surprise of 49.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TreeHouse Foods’ current financial-year’s sales suggests a decline of 12.4% from the year-ago reported numbers.
Celsius Holdings, which offers functional drinks and liquid supplements, carries a Zacks Rank #2 (Buy) at present. CELH delivered an earnings surprise of 81.8% in the last reported quarter.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year’s sales and earnings implies surges of 69.6% and 154.4%, respectively, from the prior-year numbers.
McCormick, which operates as a manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavors, currently carries a Zacks Rank #2. MKC has a trailing four-quarter earnings surprise of 4.2%, on average.
The Zacks Consensus Estimate for McCormick’s current fiscal-year sales and earnings suggests growth of 6.4% and 5.1%, respectively, from the year-ago reported numbers.
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McCormick & Company, Incorporated (MKC) : Free Stock Analysis Report
Pilgrim's Pride Corporation (PPC) : Free Stock Analysis Report
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Celsius Holdings Inc. (CELH) : Free Stock Analysis Report
