Pilgrim's Pride (NASDAQ: PPC) reported adjusted EBITDA of $360 million for the second quarter of 2026, with margins contracting to 7.8% from 14.4% in the prior year period. Net revenues stood at $4.63 billion, down from $4.76 billion a year ago.

The margin compression was driven by a 27% decline in U.S. jumbo cutout values, increased competition from imported pork in Europe, and elevated supply in Mexico. Despite these headwinds, chicken demand remained firm across retail and food service channels globally.

Financial Performance by Region

The company’s profitability varied significantly across its three primary operating regions during the quarter.

U.S. margins improved sequentially following plant upgrades and better live operations performance, offsetting the impact of significant downtime in the first quarter. In Europe, strength in poultry and ready meals helped maintain overall profitability comparable to last year, despite pressured pork margins. Mexico faced margin erosion due to exceptional bird growing conditions that increased supply, alongside lower-priced competing proteins.

Operational Highlights

Chicken production in the U.S. rose 4.5% year-over-year, driven by higher head counts and improved livability. The USDA anticipates production growth will moderate to around 2.5% in the second half of the year.

• Just Bare brand retail sales grew over 30%, achieving nearly 15% market share in the frozen fully cooked category.
• Prepared foods volumes in the U.S. increased nearly 14% year-over-year.
• The company completed the conversion of its Russellville plant to a case-ready operation.
• Investments in Georgia for prepared foods and small bird deboning are on schedule.

Balance Sheet and Guidance

Pilgrim's Pride completed a $250 million tender offer for its 2033 bonds during the quarter. Net debt totaled less than $2.5 billion at the end of the period, resulting in a leverage ratio of 1.43 times trailing twelve-month adjusted EBITDA. The company held nearly $1.6 billion in total cash and available credit.

GAAP net interest expense was $46.1 million, including a loss on early extinguishment of debt. Excluding this item, net interest expense was $28.5 million. Capital expenditure for the quarter was $230 million, with full-year guidance maintained at approximately $900 million.

What the Numbers Show

The divergence between revenue stability and margin contraction highlights the company's exposure to commodity price volatility. While net revenues declined only modestly (from $4.76 billion to $4.63 billion), adjusted EBITDA fell sharply from $686.9 million to $360 million. This indicates that the 27% drop in jumbo cutout values directly eroded profitability without a corresponding reduction in sales volume or cost base, underscoring the importance of the company's strategic shift toward prepared foods and branded products to mitigate future commodity-driven margin swings.

Pilgrim's Pride Corporation (NASDAQ: PPC) priced an offering of €500 million in aggregate principal amount of senior notes. The deal involves Pilgrim's Europe Finance PLC, a wholly owned subsidiary.

The notes carry a coupon rate of 4.750% and are due in 2034. Closing is expected on September 23, 2026, subject to customary conditions.

Use of Proceeds

The issuers intend to use net proceeds for general corporate purposes. A primary use is funding consideration for the recently announced acquisition of Walkers Deli & Sausage Company. The offering is not conditioned on the closing of that acquisition.

Offering Structure

The notes have not been registered under the Securities Act of 1933. They may not be offered or sold in the United States absent registration or an applicable exemption. The offering targets qualified institutional buyers pursuant to Rule 144A and certain non-U.S. persons in accordance with Regulation S.

Company Profile

Pilgrim's Pride employs approximately 63,000 people. It operates protein processing plants and prepared-foods facilities in 14 states, Puerto Rico, Mexico, the U.K., the Republic of Ireland and continental Europe. Primary distribution channels include retailers and foodservice distributors.