Pilgrim's Pride Q1 2025: Navigating Contradictions in CapEx, Consumer Markets, and Production Challenges

Capital expenditure plans and timing, European consumer market and economic conditions, Mexico market dynamics and consumer behavior, U.S. hatchability and mortality challenges, and capital expenditure spend and timing are the key contradictions discussed in Pilgrim's Pride's latest 2025Q1 earnings call.



Revenue and Earnings Growth:
- Pilgrim's Pride Corporation reported net revenues of $4.5 billion for Q1 2025, a 2.3% increase over the same quarter last year.
- The company's adjusted EBITDA was $533 million, up 62% versus Q1 of 2024, with an adjusted EBITDA margin of 12%, up from 8.5% last year.
- The growth was driven by disciplined execution of strategies, improvements in production efficiencies, and strong demand in retail and food service.

U.S. Market Performance:
- Sales and adjusted EBITDA in the U.S. increased compared to the prior year, with Big Bird benefiting from elevated commodity values and improved operational efficiencies.
- Small Bird improved due to QSR growth and operational excellence efforts, and diversification efforts were accelerated through portfolio expansion across retail and food service.
- The improvements were supported by strong retail demand for boneless skinless breasts and increased customer partnerships.

Supply and Demand Dynamics:
- USDA indicated ready-to-cook production for the U.S. chicken grew 1.1% in Q1 2025 compared to the first quarter of 2024.
- Increased mortality and reduced hatchability challenged broiler production, but record hatcher utilization and growth in sets and placements were expected to support production growth.
- The shift in consumption from food service to retail impacted demand dynamics, with strong retail demand pressuring promotional activity and supply.

Feed Pricing Dynamics:
- Corn prices experienced volatility with a strong rally at the start of the quarter, but South American production led to a decline in prices by the end of the quarter.
- Soybean meal prices fell due to record production in South America, resulting in ample supply and stable pricing expectations.
- The company anticipates more corn supply, which should alleviate potential price pressures in the future.