Pilgrim's Mix and Operations Offset Lower Cutout Values

The Tip Desk · October 31, 2026 · 3 min read

Third-quarter net sales were $4.65 billion as Adjusted EBITDA fell to $316.3 million and the margin compressed to 6.8%.

Pilgrim’s Pride Corporation (PPC), one of the world’s leading food companies, reported net sales of $4.65 billion for the three months ended September 27, 2026, down 2.2% from a year earlier.

GAAP operating income was $191.5 million, or a 4.1% margin, versus $492.6 million a year earlier. GAAP net income was $116.3 million, or $0.49 a share, compared with $343.1 million, or $1.44 a share, in the year-ago quarter. Adjusted EBITDA was $316.3 million, or a 6.8% margin, down 50.0% from $633.1 million, or a 13.3% margin, a year earlier.

Sequentially, GAAP operating income rose to $191.5 million from $66.0 million in the second quarter, lifting the GAAP operating margin to 4.1% from 1.4%. GAAP net income rose to $116.3 million from $13.2 million, and GAAP EPS rose to $0.49 from $0.06. Adjusted EBITDA declined sequentially to $316.3 million from $360.0 million, with the margin falling to 6.8% from 7.8%.

In the United States, demand for fresh chicken experienced moderate volume growth compared with near-record levels from last year. USDA reports reflect a 2.2% increase in supply year over year, outpacing overall demand growth and pressuring commodity cutout values lower than the previous period. U.S. Fresh volumes remained steady versus the previous quarter as promotional support and increased distribution offset planned downtime from the investment in the Ellijay, Ga., plant to grow in the small-bird debone segment. The company said differentiated product mix and improvements in live operations and yield efficiencies throughout the quarter partially compensated for declines in commodity cutout values.

U.S. Adjusted EBITDA was $185.2 million, or a 6.9% margin, versus $479.1 million a year earlier. The U.S. Adjusted EBITDA margin compressed sequentially to 6.9% from 8.7% in the second quarter.

U.S. Prepared Foods accelerated marketplace momentum as volumes rose over 15% compared with last year. Just Bare retail sales grew by over 25% versus the prior year, and Just Bare volume market share in the frozen fully cooked category rose over 300 basis points year over year. Construction of the new prepared foods facility in Walker County, Ga., remains on track with commission expected in the second half of 2027.

Europe sales and volumes remained stable, while volume and sales both rose compared with last year. Europe Adjusted EBITDA was $102.0 million, or a 7.4% margin, versus $110.3 million a year earlier. The Europe Adjusted EBITDA margin compressed sequentially to 7.4% from 7.6% in the second quarter. The company said margins compressed given challenging pork fundamentals and sustained escalation of input costs. Approval of the Walkers Deli & Sausage acquisition continues to progress with an anticipated close in early 2027.

Mexico Adjusted EBITDA was $29.1 million, or a 4.9% margin, versus $43.7 million a year earlier. The Mexico Adjusted EBITDA margin expanded sequentially to 4.9% from 3.9% in the second quarter. The company said Mexico’s profitability rose compared with the previous quarter as market fundamentals in the live commodity market improved. Key Customer retail volumes increased by more than 8% versus last year. Just Bare retail fresh volumes more than doubled versus last year, and Pilgrims and Alamesa branded Prepared Foods grew by double digits.

President and CEO Fabio Sandri said the differentiated portfolio of chicken products continued to experience strong demand as affordability and convenience remained a priority among consumers across all regions, and that the company remains focused on investments and strategies to drive profitable growth and adapt the portfolio to changing conditions.

Net leverage was 1.76 times Adjusted EBITDA as of September 27, 2026, up from 1.43 times at the end of the second quarter, still below the company’s 2x to 3x target.