Pilgrim’s Pride Corporation PPC reported second-quarter 2026 results, wherein both the top and bottom lines decreased year over year. Both metrics fell short of the Zacks Consensus Estimate.
Pilgrim’s Pride’s Q2 Metrics in Detail
PPC posted adjusted earnings of 64 cents per share, down 62.4% year over year from $1.70 per share. The metric came below the Zacks Consensus Estimate of 75 cents.
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 declined 2.8% year over year to $4,626.2 million from $4,757.4 million, missing the consensus estimate of $4,900 million. Declining U.S. commodity pricing weighed on results, while Just Bare retail sales growth of more than 30% offered support.
PPC’s Margin & Cost Performance
Gross profit fell 52.5% year over year to $339.8 million, down from $715.3 million, as cost of sales rose from $4,042.1 million in the prior-year period to $4,286.5 million.
Selling, general and administrative expenses increased 32.9% year over year to $265.1 million, from $199.5 million in the previous year period.
Adjusted EBITDA declined 47.6% year over year to $360 million from $686.9 million. The adjusted EBITDA margin also contracted 660 basis points year over year to 7.8% from 14.4%.
The operating income was $66 million, a year-over-year decline of 87.1% from $512.3 million.
Pilgrim’s U.S. Business Faces Pricing Pressure
U.S. sales decreased 6.1% year over year to $2,649.2 million from $2,820.4 million. Adjusted operating income dropped year over year to $150.2 million from $413.5 million, while the adjusted operating margin narrowed to 5.7% from 14.7% in the prior-year period.
Higher retail and foodservice demand drove growth in fresh volumes, although weaker commodity chicken prices continued to weigh on profitability. Profitability improved sequentially as completed plant enhancement projects and stronger performance across live operations supported margins.
The U.S. Prepared Foods segment recorded year-over-year improvements in both sales and margins. Just Bare retail sales increased more than 30%. Over the past year, the brand strengthened its competitive position by adding nearly 300 basis points to its market share. Construction of the Walker County, GA, prepared foods facility continued as scheduled, while ongoing investments in Big Bird portioning equipment further expanded the company's value-added production capabilities.
Pilgrim’s Europe Sales Edge Higher
Europe sales rose 1.3% year over year to $1,389.7 million from $1,371.3 million. Adjusted operating income declined year over year to $69.3 million from $73.9 million, and the adjusted operating margin slipped to 5% from 5.4% in the prior-year period.
Retail volumes with key customers continued to grow at a faster pace than the overall grocery market. The Rollover brand posted double-digit sales growth, while Fridge Raiders continued to deliver stable performance. Even so, profitability was affected by elevated pork imports into the U.K., increased costs associated with the Middle East and softer demand from foodservice customers.
PPC’s Mexico Volumes Grow Despite Margin Squeeze
Mexico sales increased 3.8% year over year to $587.3 million from $565.7 million. Adjusted operating income fell year over year to $16.5 million from $86.9 million, with the adjusted operating margin shrinking to 2.8% from 15.4% in the previous-year period.
Mexico volumes increased from the prior-year period, benefiting from improved growing conditions and a more than 30% increase in Pilgrim's branded retail fresh volumes. However, profitability in the live commodity business remained under pressure due to higher domestic chicken production, increased import volumes, greater egg availability and additional pork imports. At the same time, the expansion of live operations in the Southern Peninsula remained on schedule.
Other Financial Aspects of PPC
Pilgrim’s ended the quarter with cash and cash equivalents of $388.8 million, down from $640.2 million at the end of 2025. Long-term debt, excluding current maturities, was $2,861.4 million, while total stockholders’ equity stood at $3,763.4 million.
Cash provided by operating activities totaled $471.8 million for the first six months of 2026. Capital expenditures reached $465.2 million.
This Zacks Rank #5 (Strong Sell) stock has plunged 30.9% in the past six months compared with the industry’s 7.7% decline.
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Stocks to Consider
Some better-ranked stocks have been discussed below:
United Natural Foods Inc. UNFI distributes natural, organic, specialty, produce, and conventional grocery and non-food products in the United States and Canada. It presently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for UNFI’s 2026 sales indicates a decline of 2.1%, and the same for earnings indicates growth of 254.9% from the prior-year reported levels. UNFI delivered a trailing four-quarter earnings surprise of nearly 30%, on average.
US Foods Holding Corporation USFD, together with its subsidiaries, markets, sells and distributes fresh, frozen, and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for US Foods’ current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago actuals. USFD delivered a trailing four-quarter earnings surprise of 3.9%, on average.
Darling Ingredients Inc. DAR develops, produces, and sells sustainable natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America, and internationally. DAR currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for DAR’s current fiscal-year sales and earnings implies growth of 13.2% and 642.7%, respectively, from the year-ago actuals. DAR delivered a trailing four-quarter negative earnings surprise of 16.1%, on average.
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This article originally published on Zacks Investment Research (zacks.com).