Q3 2025 Pilgrims Pride Corp Earnings Call

Speaker #3: Good morning and welcome to the third quarter of 2025 Pilgrim's Pride earnings conference call and webcast. All participants will be in listen-only mode.

Speaker #3: Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero, at the company's request.

Speaker #3: This call is being recorded . Please note that the slides referenced during today's call are available for download from the investors section of the company's website at .

Speaker #3: Bms.com . After today's presentation , there will be an opportunity to ask questions . I would now like to turn the conference call over to Andrew Rojeski , head of Strategy , Investor Relations and Sustainability for Pilgrim's Pride .

Speaker #4: Good morning , and thank you for joining us today . As we review our operating and financial results for the third quarter ended on September 28th , 2025 .

Speaker #4: Yesterday afternoon , we issued a press release providing an overview of our financial performance for the including a reconciliation of any non-GAAP measures we may discuss a copy of the release is available on our website at irug .

Speaker #4: PILGRIMS PRIDE CORP , along with the slides for reference , these items also have been filed as form 8-K and are available online at .

Speaker #4: Ssa.gov . Fabio Sandri President and Chief Executive Officer and Matthew Galvanoni Chief Financial Officer , will present on today's call . Before quarter , we begin our prepared remarks , I would like to remind everyone of our safe harbor disclaimer .

In fresh retail boneless, chicken breasts experienced notable growth as the retail pricing spread against ground, beef, remain a record levels.

Boneless thighs. Also realize significant gains driven by a narrowing price Gap, with boneless skinless breasts and consume continued consumer momentum.

While wind pricing remain relatively steady compared to last year's volumes, continue to grow.

The daily also drove growth through enhanced velocity and Shoppers increasingly turned to prepare meals as a more affordable, alternative to traditional, ready to eat options.

Frozen prepare also saw gains from improved velocity along with better production, mix as nuggets and strips continue to capture a large share of new occasions.

In Food Service, Rising costs associated with dining out are impacting overall restaurant traffic.

Nevertheless, operators continue to strategically lean into chicken through value offerings. Limited time offers and menu updates as a means to trigger or sustained consumer engagement.

Value, added, chicken Focus, qsrs continue to Leverage, The affordability of chicken, outperforming the broader dining sector showing greater resilience and mind amid decline in traffic.

In exports, we have realized values compared to last year and at levels higher than historical amounts. Other than China, we have not experienced any meaningful challenges from terrorists or other barriers in our traditional trade Lanes.

Our Geographic, diversity and expensive. Network of international customers will continue to be critical to manage any potential outbreaks.

As for feed, corn pricing remains stable, as Market fundamentals, balance larger than anticipated us Supply from increased corn, acreage against robust interest from export markets.

Based on the most recent data available. USDA, expect record corn, demand. Nonetheless us overall Supply is expected to increase 10% versus last year. Resulting in ending stocks of over 2 billion, bushels,

Overall, globo corn, stocks are expected to remain relatively flat.

Soybeans.

Fell through the quarter, given increased crush capacity and record South American harvests during the first half of 2025, ensuring ample global soybean meal supplies. Most recent forecasts indicate that U.S. soybean stocks will be flat compared to the prior year, whereas global soybean stocks are expected to build for the third year in a row.

Global wheat production, rebounded strongly as major exporting countries produce more than 23 million metric tons compared to last year with prices moved lower during Q3 generating demand and clearing Supply in the UK production grows over 2 million metric tons compared to Prior year.

Further increases in wheat, planting or anticipated this fall, for harvesting the summer of 2026, which could increase availability.

During the remainder of 2025, the corn and soybean meal markets will focus on Final United States yields. The start of the South American weather seized then and changes to expert. Portfolios of us grain and oil seeds from the ongoing trade negotiations.

Turn it to the US.

Checking the man remains strong upon retail and Food Service equally important, our diversification across bird sizes, in fresh and growth of prepared. Foods alleviated, the impact of a decline in commodity Market values during September as a result. Our margins were very comparable to last year.

He is already benefited from relative affordability of chicken in retail compared to other proteins. More importantly sales to keep customers were significantly higher than category average suggesting our higher attribute, differentiated offerings continue to resonate with consumers

Big Bearing has production efficiency through improved yields, equipment upgrades, and team member training.

Live operations also made significant progress to revise Management, Programs updated housing and improved bird health.

While we experienced some volatility in commodity chicken values in September, big bar, margins were compared to comparable to last year. Giving our operational progress and the clients in feed costs.

Small birds benefited from steady demand from Key, customers among leading users and Improvement. In operational. Excellence despite some reduction in the demand in the bone in category.

In prepare Foods, net sales grew by over 25%, through expanded offerings and increased distribution within retail. The just bear brand continues to lead the category growth. As market share Rose by nearly 300 basis points versus the same period last year.

The pilgrims brand line of products, also continues to gain consumer traction and Market pressure brake recognition.

Velocity on our core items improve and the food and wine and serious. Eats both recognize our ultimate nugget line as the best chicken nugget in the. So in their September Publications,

Input service repair sales, expanded faster than China average.

Innovation played a critical role as over 80% of growth came from new items.

in Europe, we have undertaken a multi-year journey to drive profitable growth

Over the past 2 years, we consolidate our manufacturing Network and simplify the organization to create a more Nimble. Key customer, focus organization,

As a part of this afternoon, we remain focused on quality and service.

Based on what our work, we have continually received recognition, for our supply chain capabilities, over the past several years. And once again awarded supplier of the Year by key retailers or in the quarter.

With a solid manufacturing and corporate base, we are now focused on growth.

Through our Diversified protein platform with Innovation Brands and key customer Partnerships.

In retail.

Similarly several leading qsrs continue to emphasize chicken giving its affordability and availability creating further, prospects.

Given this attractive environment, we are exploring investment to accelerate our growth in this segment.

The pork business was more challenging during the quarter as a European. Hog pricing fell as demand softened from primary export markets, specially from China.

That started an anti-dumping investigation against your against Europe.

To mitigate this scenario. We created differentiated higher attribute offerings in UK and were able to secure a long-term Arrangement supporting the growth of a key customer.

We will continue to pursue similar Arrangements, going forward in our branded portfolio. Refrigerators achieve this highest ever house household penetration roll over. Continue to expand giving incremental distribution both Brands, grew faster than the category. Our largest brand, the Richmond has experienced relatively steady volumes here to date. However, we have experienced increased competition from private label offerings, giving the availability of imported meat into the UK.

To revigor growth and increase. Share will amplify or investment in promotions and continue to bring new, and exciting products to the market place. Also, we will continue to cultivate our presence in food service. To that end. We've increased our distribution and key customer qsrs demand remains robust as sales have increased by over 15% year to date. We will look

to further expand our presence across tubs and bars through leading distributions.

in Mexico, we continue to diversify our portfolio and reinforce the foundation for profitable growth and reduce volatility

In fresh retail sales to keep customer Rose by nearly 9% compared to last year. Momentum for Branded offerings continue to grow led by just bare since Q3 of last year. Our forums have more than triple

similarly, repair food sales are up over 9% compared to last year led by our figures brand, which rose over 12%, in food service, qsr has been excessively strong as sales increased by 17%

Given our continued development of key customer Partnerships, branded growth and expansion in prepared. Mexico becomes even more attractive, give us a enhanced return profile and growth potential.

We remain committed to investments in our growth agenda. In the US. Our portfolio strengthening with the conversion of a big bird facility to kids. Ready? A new protein conversion, plant. A new state-of-the-art prepared food facility in Walker. County combined with upgrades in processing and volume in big birds. All remain on schedule. Once completed this investments will enhance our competitive differentiation in fresh further. Diversify our portfolio to Brands and enhance operating efficiencies.

As a result, our U.S. business will become even better equipped to meet consumer preferences and key customer growth, while better managing increasing volatility in the commodity market.

Similarly, our expansions in fresh and preparing Mexico, continuous plants in fresh progress, continued at Veracruz and compete as breeder and broilers Farmers, have both started production in prepared foods, contraction is well on their way, which is initial production testing is laid for the latest in Q4.

Given this Investments, Mexico will improve bio security expand distribution in fresh and further diversify its portfolio. Through value added like the US Max will become even more Adept at managing volatility of the live commodity markets.

Taken together, these investments will reinforce our strategies reduce risk and increase returns for our business creation, creating additional value for our shareholders.

And earlier this week, we published our 2024 sustainability report, which provided an update on our progress against environmental social and governance matters. Critical to our business to that end. We continue to integrate sustainability throughout all aspects of our strategy and business to enhance environmental stewardship conserve natural resources and cultivate team member development.

Since 2019, we have reduced our scope 1 and 2, emissions intensity by 23% and improve our Global safety index by over 77%.

Usage of renewable. Electricity. Continue to be a focus area and now constitutes over 21% of our overall, electricity usage.

We have provided more than 5.7 million training hours to improve skills and create opportunities within our company.

Our better future programs continue to generate remarkable enthusiasm as more than 285 team members or their dependents have enrolled in tuition, free higher education, programs.

With that, I would like to ask our CFO, Matt Galvin to discuss our financial results.

Thank you Fabio. Good morning everyone. For the third quarter of 2025 net revenues were 4.76 billion versus 4.58 billion a year ago, with adjusted EIT of 633.1 million and a margin of 13.3% compared to 660.4 million in a 14.4% margin in Q3 last year.

Relative to net revenues. We experience year-over-year, sales growth of 2.3% in the US and the quarter driven by growth of our key customers in case, ready and prepared food volumes increased,

Mexico's revenues were up over 5% year-over-year, due to an increase in sales volume.

In Europe, European net revenues Rose over 6%.

Adjusted. Even down margins in Q3 were 16.9% in the US compared to 18% a year ago.

For a European business adjusted. EBA margins came in at 7.9 for Q3 compared to 8.6% last year in Mexico. Adjusted ebit on margins in Q3 were 8.2% versus 9.7% a year ago.

Moving to the us. Our adjusted ebit da for Q3 came in at 4 7, 9. 1 2.

In our big third business lower grain input costs and continued operational improvements partially offset year-over-year. Declines in US commodity chicken market pricing

Our case ready and prepared foods. Businesses, continued their momentum with increased distribution with key customers.

Case studies profitability was higher both year-over-year and quarter over quarter. However, even with a 25% year-over-year increase in net sales higher commodity chicken input costs in previous periods with a headwind to prepared foods Q3 profitability.

Small bird grew in qsr with our key customers. Offsetting a more challenging environment in walks.

In Europe, adjusted even on Q3 was 110.4 Million versus 112 Million last year.

This light year-over-year decrease was driven by pricing actions we took to address lower European hog market prices.

The impacts of these pricing actions were partially offset by year-over-year cost reductions from our network, optimization programs, and administrative reorganization efforts.

Mexico generated $43.7 million in adjusted EBITDA for Q3 compared to $49 million last year.

Profitability decreased year-over-year primarily due to lower market pricing for chicken due to higher Supply in the certain markets as bird disease impacts are much less in those regions during Q3 2025.

Relative to our sgna costs. We incurred higher year-over-year, legal settlement related and incentive compensation costs.

Our effective tax rate for the quarter was 25.6%, with our year-to-date rate at 25%, which is what we expect for the full year rate.

We had 1.7 billion dollars in total cash and available credit at the end of the quarter, we have no short-term immediate cash requirements, with our bonds, maturing between 2031 and 2034 and our Us credit facility not expiring until 2028.

Our liquidity position provides us flexibility during times of volatility in the US commodity markets and allows us to pursue our growth strategy. Including organic growth to meet our Co customers needs.

We have a strong balance sheet and we continue to emphasize cash flows from operating activities management of working capital and discipline investment in high return projects.

Even after paying $2 billion in dividends this year, as of the end of Q3, our net debt totals less than $2.5 billion, with a leverage ratio of slightly more than 1 times. Our last 12 months adjusted A.V.A.

That interest expense for the quarter total 29 million.

We anticipate our full year. Net interest expense to be approximately 110 million

We spent $182 million in cat-backs in the third quarter, an increase of 78 million over the third quarter in 2024.

In the US, we made significant progress, this quarter towards the conversion of our Russellville plant by the end of the first quarter of 2026 to support a retail key customer.

Also in Mexico, our investments in fresh and prepared. Continue to program, Pro progress and remain on schedule.

Usually discussed, we continue to review options to expand our presence in small bird.

Finally, we're beginning here in the fourth quarter, our construction efforts in Walker County Georgia on our. New prepared foods, plant support the growth of our just bear brand.

we anticipate uh estimate our full year capex spend to approximate 700 million

These growth projects aligned to our overall strategy of portfolio diversification, focus on key, customers operational excellence and our commitment to team member health and safety.

Operator, this concludes our prepared remarks, please open the call for questions.

We will now begin the question and answer session in the interest of allowing equal access. We request that you limit your questions to 2, then rejoin the queue for any follow-up.

to ask a question, you may press star then 1 on your touchtone phone,

if you are using a speaker-phone, please pick up your handset before pressing the keys to minimize background noise.

To withdraw your question please press star. Then to at this time we'll pause momentarily to assemble our roster.

The first question comes from Ben thorir with Barclays. Please go ahead.

Yeah, good morning uh Fabio Mets. Thank you very much for uh the presentation taking my question, um 2 quick ones. So number 1, obviously we've seen uh the more commoditized prices rolling over in in a more meaningful way versus What Might Have Been usual, seasonality performance? So wanted to understand if you could first clarify a little bit more, what you're seeing in the market, what's being the main driver of that is it just because of the Hedge ability, is this liability? And how do you think about that rolling into as we move into 2026 in terms of like a seasonal recovery into into 1 Q? Versus what product is going to be a softer, 4 q. Um that would be my first question and second it's related to that. Can you update us as to within your portfolio right now? What percentage of your pricing contracts is actually exposed to that more commoditized, third side, big bird. Um,

Pricing mechanism. That that would be meant 2 questions.

Yeah, Ben thank you. Of course, pricing is a function of supply and demand, right? And uh, what we experiencing Q3 in terms of uh demand. This is a similar scenario to the last year's the consumers, continue to be watching their spending and have growing concerns about inflation and with that, and the inflation and food away from home, this food service.

Service operators have experienced lower traffic.

Um what they have done to combat, the lower traffic is to resort to Promotions and to attract attract customers, right? And those promotions have feature, mainly chicken,

so because of that, despite the lower traffic, we have seen chicken growing in the

food service around 4% in volume and we're seeing that special in the qsr. We are the volumes have increased more 6%.

So we did lower food traffic. We're seeing consumers going into the retail and on retail what they're facing is also, uh, some increase in inflation, um, especially on the beef category.

Um, if you look into the pricing, uh, between

Beef. And chicken.

The Gap that we are seeing. It's over 2 dollars.

Uh, just as an example, three years ago, this spread was $0.50.

And since then, the price of chicken went down, 10%.

While the ground beef prices have increased by 28%. So when the consumer is facing that scenario, he is choosing to uh, eat more chicken and we're seeing uh the demand for chicken growing close to 3% in in this category as well.

So, the demand remains robust, what happened during Q3 will in the supply scenario.

What's at the beginning? Very similar to what we saw in the first semester, we have a smaller but younger breeding flock that generates more eggs.

But we have struggles, we hatch ability and livability and the total Supply growth in the first semester of work was under 2%.

during Q3 we,

Growing conditions.

So this better growing condition.

Growth in Q3 being 2.7%. What we saw this was that during September

some weeks.

Have seen because of this better growing conditions. Better livability better um sizes as well and the industry having to process on Saturdays to reduce weights, the increase in Supply achieved close to 6% and then it was what impacted the commodity markets. Uh and we have some sharp Corrections in the especially on the Boneless.

Skinless boneless price.

as prices went down from,

2 and $2.50 per pound to almost $1.20 per pound over the course of 4 weeks.

We we we saw that that creating some demand and I think the good news is that right now the prices are stable and actually went up a penny last week. So we're seeing that the strong demand is in line with uh the Supply right now.

On the and how much? Yeah.

Exposure.

Yeah. On our exposed we have a very Diversified portfolio of

Segments, as I always say, talk about our portfolio, we are the leaders in the small board Market. We have a, a big presence, and we are 1 of the leaders in the retail category. And we also have a big exposure in the, in the big commodity markets. When you look into our portfolio is well Diversified within those categories um in terms of how much it is exposed to the commodity markets, I'll say that is close to 25% which is in line with our uh production or our share of production on the big bird category even in the Big Bird, we've been trying to differentiate some of our portfolio. And as we talked about in in Prior calls, we are the leader in the no antibiotics ever, uh, category in also in the Big Bird category. So we even being exposed to the commodity. We can can achieve a premium in that category.

Okay, and you can comment on on, like, seasonality expectations for like monq, correct.

Yeah. On the, on the what we are seeing as I as I mentioned, I think the good news is that, um, as of the last 2 weeks we have seen supply and demand imbalance. And actually, as I mentioned prices started to, to go up, I think it's normal to have lower demand during Q4 for chicken. And then when we started and this normal seasonality prices start Rising December to, uh, prepare for the strong, um, promotional activity that we normally see on the chicken category especially on retail uh, during January. So when you look at uh the USDA expectations growth continued to be expected in between 2 and 3% on the chicken category. We've seen this increase in excess consistently year over year, uh, and that we saw some seasonal cuts that were lower than prior years.

But again, supply seems to be very balanced in October. And I think also, when you look at you, overall protein availability in the United States during Q4, uh, USDA is expecting a a shortcut in the beef production. So, overall, protein availability, will be very limited during Q4 chicken will be. I think the only category that we will be up but USD is expecting between 2 and 3%.

Thanks.

The next question comes from Peter Galvanoni with Bank of America. Please go ahead.

Maybe you can just explore on that topic a bit more um because I think there's a lot of Market participants who who probably don't understand myself included that the the rationality of what's Happening? Thanks very much.

Sure Peter. Yeah, it's it's a great question. I think. Um as I mentioned at the beginning, what is happening is the consumer when facing uh, the food away from home higher or the inflation and food away from home, he is moving to retail.

so,

We need to First, think about that transition. So, when, and when we look at the ticket of the food away from home, is typically, 3 times the ticket of the, the food at home. So, what's happening is that the lower food traffic?

In food service.

Is partially moving to retail. And when they go to retail,

They want to have or indulge in, they, uh, and they are buying the Beats. So, what we are seeing is, you mentioned elasticity, right? We're seeing this, uh, change in the demand on retail, where you see consumers moving away from high Food Service prices to retail, and they are consuming the high-price beef. So, we're seeing the demand for beef also increasing because of that change.

now, inside retail

We saw exactly what you said the record spreads and then people moving away from beef into chicken. So this is the scenario that we are seeing and that's why the prices of beef have been very well supported because they're being supported by the the trade down.

In a, in per se from Food Service to retail. And then, inside retail, we're seeing the trade down from the high prices of beef, especially the ground beef.

To the, uh, boneless chicken. Uh, as I mentioned with the highest spread, uh, we ever seen close to 2 dollars. So, it's a, a little movement between categories as well. Not only inside the retail that is supporting, uh, the beef category.

And we are also seeing some lower beef availability as well, which is supporting this prices.

Great. Thanks very much. I'll pass it on.

The next question comes from Andrew strazik with BM.

No Capital. Please go ahead.

Hey, good morning, thanks for taking the questions. Um, my first 1 there, there were 2 things that you mentioned impacting the quarter.

And I'm curious about whether you view those as just third quarter impacts or if you think those continued into the fourth quarter or even into 2026, those are um, the input cost headwind to prepared foods. And some of the uh the the the uh demand challenges on the export environment in in uh the EU UK segment. So if you could just kind of comment on on how to think about whether those should continue or that was kind of confined to the third quarter,

Yeah, uh, I think, you know, just going forward, right? And moving back to us. So once again to 2026

Uh USDA is looking for for chicken growth in between the 2 and 3% that we saw in 2025 all the drivers that made 2025 a strong year for chicken, continue to be in place for 2026. Uh, the industry is operating with a very high uh,

utilization rate, especially on the hatcheries. The breeding flock continue to be at the lowest levels compared to Prior years and the bullet placements, which is the indication for the size of the breeding flock. We're in line with the replacement needs. So we are not seeing an expansion of the breeding flock.

With the hatch utilization at the rates that we are seeing. We, we don't see a scenario where we have a significant increase in the supply of chicken for 2026. And when we look at the competing proteins, I think, uh, USDA is expecting an even higher reduction specially on the beef production which we will lead into I think as a record low growth in a net availability for in United States of below 1%.

Or chicken input costs is in a important issue as well. And what we have in the United States, of course, we will monitor, as I mentioned, the weather in the South America that could change the pricing for the global corn. And soy beans is the, the trade deals that uh are in discussion. But overall we saw the largest acreage ever planted in the United States and we are seeing very good yields coming out of the fields. So there is ample supply of corn and soy. So we we were not seeing any scenario where we we're going to see a squeeze or or, or a big

Increase in the input costs for us and Andrew relatives. You prepared foods question. I think it's important to, you know, the dynamic that we saw here in Q3 with uh, relatively High commodity market pricing for chicken, uh, in uh, July and August and then the Steep drop in September, you know, for us to flush that through the p&l within prepared foods, you know, it takes a month or 2, right? So, you know, we had much higher input costs in prepared foods, inventory, that flew through the p&l in Q3

That will then kind of recede more naturally as that inventory flushes through. And the new inventory is being built on input costs that are much lower, right? So it it's a bit of a timing situation within us prepared, foods relative to that, uh, input cost, uh, fluctuation and then on the export of UK. Uh, as I mentioned before remarks, what we saw was that because of a China anti-dumping, uh, against, uh, Europe, we saw a lot of commodity meet specially from Germany, getting into the UK. I think what we did and we will continue to do, is to differentiate our offerings with the higher welfare that we that we do have in UK. I think uh, a great example was the 10 year.

Uh, um, um, contract that we, we, we, we, we did with the key customer where we going to be able to differentiate their offerings, which help support their growth and isolate us from this competing more commodity meet that gets into in special into the UK. That always, uh, impact more on the sausage, uh, business because it is important commodity meat and that pressure a little bit to the prices on our richmon brand. But, uh, as I mentioned, we will also continue to do some promotional activities and we will lead through the innovation in that market to support uh the strong growth of that brand and the profitability of the overall portfolio.

Okay, that’s super helpful. And then...

You know, I I wanted to see if you could elaborate on your comments about the eu-uk, reaching a new phase of the profitability journey. And and and I don't think that's entirely surprising given the progress you've made on margins over the last couple of years and in the context of how you've talked about kind of normal margins in that segment. But you know how, how then especially in the context of of what was a little bit of a softer quarter than we expected in the segment. This quarter like

how do we think about the profit growth or how are you thinking about that transition and how we should translate that to to either margins or the profit growth?

Uh, for that segment, kind of over the next couple of years. Thank you.

Yeah, that's that's a great point. And and I think we, as we say turn the page, right? Uh, in you know, if I think we work Consolidated. Consolidating your network. Uh, manufacturing. We are consolidating our back office. We have a new office close to London, so I think we are in with great grounds to now be able to grow and I think grow could be through m&a and could grow could be through some organic expansions. I think we have the right structure. Today, we have the right team to support those. Of course we will continue to improve our current

Like I mentioned with this, uh, impact from the price of pigs, especially in Europe, impacted a little bit, our our our branded portfolio. But what we can do is to continue to innovate and partner with our key customers to continue to support their growth. Also, we seen the the chicken business in Europe growing faster than the other segments. And we have some organic Investments that uh we are putting in place to increase our production of chicken to close to 20% growth over the next 2 years.

Great, thank you very much.

The next question comes from 4, Ranch Sharma with Stevens. Please go ahead.

Um, good morning, and thanks for the question. Just wanted to, uh, maybe just, uh, focus on Europe here. Um, just gave a lot of great color here with that with that last, uh, uh, answer. But, um, maybe just talking more on m&a. Uh, you just told us your, you know, your, your, your lining up some some organic chicken, um, uh, production in Europe here, um, over over the next few years. Uh, does this does this take your foot off the pedal in terms of your hunt for an m&a opportunity? Because I think in the past you've said that maybe the next thing for you

You all would be some some, you know, white white space opportunity in Mainland Europe. And so wanted to a, get a sense is if those organic Investments, slow down any sort of m&a initiatives in Europe and B, um if you could maybe just give us an update on on what you're seeing in Europe. Is there anything attractive out there uh, at this time?

Yeah, sure thanks. Uh, and I think you you, right where we are growing in chicken on the organic, it is in UK and Ireland. It's where we are present. We have a great, uh, key customer relationship. We are seeing the demand for chicken growing, um, um, in in UK and Europe. So we have the opportunity, and as I always mentioned because of our differentiated products, we help our key customers to differentiate. And when they grow, we are allowed to grow. So this is not, um, speculative, uh, growth and that does not change anything on the m&a front, when you look at our portfolio in Europe is the most Diversified that we have uh, around the world. So we are in the chicken business. We have the pork business but we also have the sausage and the meals business along with Food Service, uh, a food service business in Europe. So we have a very Diversified portfolio and we're looking into opportunities in all those.

Categories, or segments, specifically, as you mentioned in chicken, we are present in UK and Ireland and we see opportunities in other countries in the European Union for us to expand our expertise in chicken and then within UK, uh, and other countries in Europe, we see some opportunities on the meal segments. We see opportunities on the sausage and branded product segments. So I think there's a lot of opportunities in in, in Europe as the market is more fragmented in Europe, as it is in other parts of the world.

So we're still committed to growing and expanding your portfolio and the organic uh initiatives are more focused on where we are.

Got it. Appreciate the color there.

And I guess on my follow-up, um, I was just interested in in something. You said in the prepared comments, I think you mentioned that you're, you're September Big Bird. Margins may have been, uh, comparable to to last year, which, um, you know, I I I found kind of impressive just because our our data shows somewhat of a different story. And so I was wondering if maybe you could help uh quantify some of these operational improvements or or maybe even tease out how uh October big.

Bird margins look, um, in terms of ppc's view.

Is some of the industry was trying to um, control weights. So we saw some marginal supply, especially during September. So the margins during September was, were much lower than the margins, uh, uh, compared to the rest of the quarter. But overall during Q3, the margins were similar to the same period last year, as I mentioned this, you know, after this sharp decline, the prices are stable right now and the latest, um, uh, change has been up. So I think that's the great news that, uh, shows that the supply and demand are in Balance during this Q4.

And with the prices that we are seeing in the, The Big Bird commodity, we're seeing some, some triggers, uh, of demand.

Great, thank you very much.

The next question.

Good morning. Uh, and Max, I think for taking the questions to hear from our side. The first 1 is uh, on Leverage, uh, might said that, uh, the company has already paid the cheap billion dollars and dividends this year, but of course, this is also related to last year and by going for the continued to see if this balance should be so strong. Right? So if you could, uh, give us a sense of how are you thinking? In terms of the capture structure, for the rest,

Of the year as in Q4. You had that extraordinary didn't let, uh, last year. So how are you thinking about uh, 2015? And the, the second 1, uh, Fabio you mentioned a bit of the, the growth in terms of the supply, um, is there any opportunities for the US to grow in terms of exports as well? To what are some of their product, uh, in the shops of all other countries as well, and gain some Cher on the trade?

Yeah, I'll I'll say I'll answer the first 1 relative to kind of Q4 and leverage. I mean, I I think for us um we don't really see any major change in Q4, you know, as you mentioned we had and I had mentioned earlier in my prepared remarks about the 2 billion dollars in dividends that we had paid out throughout this year. Um, I think that of course was a significant, you know, call it impact to our leverage ratios at that point. But uh nothing really overly significant. I, you know, I did guide to approximately 700 million in total capex, spend this year. You know, we're in the 4440 range right now a year to date. So we will have incremental capex relative to our quarterly run rate which will be a use of cash. But but generally speaking, we don't see a major change in leverage ratios. Uh, as I look through the to the end of the year and probably, if you want to comment on the other,

Yeah, I think on Experts is a great point. I mean I think uh us is very competitive in chicken production. We have the feed inputs here. Domestically we have uh, very, very competitive operations. I think our experts are actually down this this year when compared to the prior year. And I think, because the focus of the chicken production in us has always been the domestic markets. I think, even on the leg quarters that we use to export, um, more and more. We are deboning that, um, that part of the bird and we, you know, created the the the

The the dark, the boning operations here in us, and we're keeping that meet in the United States. So it is because of change of demographic. It is because of change, in, in consumer, uh, preferences and we are seeing that category growing really fast. And as a matter of fact, dark meat deboning meat is actually at par with the price of breast, uh, meet which, which

tells us a lot about the domestic Market changing, right? And because of that, we've been reducing the experts of like quarters, which used to be the, let's say, the flagship of the American exports. I think as we grow our production here in us, as we are very competitive, we can we can uh capture some space on the exports. China has been 1 of the markets that have been close to us because of even influence.

The bends that, uh, were created last year, and they will never open despite, uh, some trade agreements that say that after 90 days without any case, the market should reopen. China never reopened.

To America meat. And I think the trade agreements, um, if they really happen, uh, on the grain side could could have some benefits uh, for us also on the meat exports.

Thank you, Father. Thank you, Matt.

And the next question.

Jones with Heather Jones, research, please go ahead.

Good morning, thanks for the questions.

Um,

I wanted to ask about Q4. Um, so like you said, Fabio, the markets have stabilized, and I'm just.

a, and

You know that the the price decline has triggered new demand but I was just curious as we head into the holiday um season and like you said, we didn't get the normal seasonal, cut back this year, and you've got snap dollar reductions coming um, in the next week. Or so just wondering how you're thinking about the pricing outlook for, um, for the November period. Um, do you think there's any material downside risks, to pricing for that period, given those 2 items?

Yeah. Thank you heather. Yeah I think as we always say Q4 is is a place where we see a lot of promotional activity in other meets hams and turkeys. And so it's never a time where we see very strong demand for chicken. But what we are seeing during the the last weeks, it's very strong Demand on the retail side. And I think the lower price of the commodity always support the retail because we can augment the production of the retail plants with

Uh, very competitive breast meat prices that we can help our key customers do promotional activity.

So I think that is what can help on this on the demand.

Of chicken even in a period where we see typically, uh the uh, promotional activity on other other meats. I think the snap is something that we are uh, following very close. Uh, I think it is an important, uh, source for on, on the retail and for uh, families.

To to augment their their, their, their budgets. I think the important point is that, uh, the snap, even if there is some disruption will be paid in a, in a future and it will be retroactive. So I think it is just a temporary or

A small delay, delay delay, uh hopefully. Um so that demand will come back again.

Uh, after the snap is paid. So yes, we are looking into that. But I think what we are doing in the chicken industry, is doing together with the key customers is to do more promotional activity with the very competitive meets that uh, we have right now because of the, the low price of the commodity meat.

Okay, thank you for that. And my follow-up is, you know, as we're transitioning from what has been an extremely robust time for the chicken industry as far as margins to, let's call it a more normalized time?

Just wondering if you could update us on how your portfolio has changed versus say.

3 or 4 years ago. Um, because it used to be your your big bird. Segment was pretty exposed to commodity markets, but even within trade pact and um, to a lesser extent, small bird there was still the preponderance in that business was exposed to market-based pricing in some extent. Maybe, maybe there were matrices and ranges, but there was still some exposure to how the market was moving. Was wondering has that changed in any material way, like as your retail, pricing become more fixed or, I mean, how should we be thinking about that as we're heading into 26?

Yeah, I think, um, we've always been.

uh, upgrading your portfolio, in a sense, I think, over the last 3 4 years, we have achieved, let's say, uh, the, the largest

Uh antibiotic free player in the United States and we are the also the largest organic operator in the United States. Uh, and we are also the largest know only vegetable feed in the United States. And I think we're trying to differentiate our portfolio, not only from market pricing, but with um some differentiated products that can capture upsides even when exposed to commodity,

So we've done that uh change. We also investing this year, as we mentioned on the prepared remarks to convert 1, Big Bird plant to a case ready. Operation again our customers

Than category average. As a matter of fact, when you look into the retail, our numbers are 3 times larger in terms of growth, when compared to the market, which means that our differentiated offerings are supporting our key customers to grow and win in the marketplace. And because of that, we will need to convert a more commodity, big bar plant to a case. Ready? Plant?

Our our our portfolio of pricing. As uh, you mentioned has changed. And I think we have less exposure to the pure commodity right now on the, some of the key customers we have negotiated prices. It is a market price, but is a negotiated price. So we don't follow UB. We don't follow, uh, the the commodity markets. What we follow is to keep our key customers competitive. Given what's happening in the marketplace, but that, that price don't change every month or every quarter. It's something that we will change when change is needed. And it could be if the grain prices are falling, uh, um, more than we expected, we can give the, uh, reduction in prices or if the, our

Cost is going up. Let's say because of Labor uh that it has not been an issue this year, but it was in Prior years.

So we can increase our price and giving what we are seeing uh both in the marketplace and in our operations.

So, I think we are less.

Impacted by the commodity prices as you mentioned. But, of course, we follow, uh, some of our contracts, follow the market price,

Okay, super helpful. Thank you.

The next question comes from Priya Ori Gupta with Barclays. Please go ahead.

Hi, good morning. Thank you so much for taking the call. I just wanted to follow up on that last point you were making. As we think about some of the contract pricing that you have in place, can you just maybe walk us through what that P&L impact is if you are collectively, quote unquote, investing in lower prices or increasing promotions with your partners, as opposed to adjusting that contract pricing? And then I have a follow-up for Matt.

Yeah, I I think the, when we talk about promotional activity is something that we have, let's say a investment and a return. So when you do a promotional activity and uh, an example is some bogus or buy 1, get 1 uh that we do with 1 of our key customers, what we see is an increase in the demand, so increasing volume so that helps the operation of our plans. So we do typically do is to bring commodity meets or Big Bird meat into a case rate ready facility. Can you put that meat in a tray to support the promotion of activity? So that helps reduce our operating cost at the plant?

And it helps the retailer with more demand, more food traffic. So it's more. It's, it's an investment when we have a commodity pricing and let's say with, uh, food distributor or with a national distributor like Cisco US Foods Garden Food Services. It's more a day-to-day pricing or weekly pricing and it follows more. The commodity, uh, Market. There will be, of course, as any supply and demand curve, right? More demand, if the price go down but it's not something specific to us. It's some market pricing. So there's the difference. When there is a promotional activity is something that uh, we deliberate uh, do that activity to help.

Both our key customers and us with more uh uh more Supply.

And more Demand, right? When when is the market pricing? It is to everyone.

Got it, that that's super helpful. Um, and then, Matt, it looks like you guys were back in the market. Doing some open market Bond BuyBacks. Can you just walk us through sort of the approach there? Um, given how low your, your Leverage is and sort of what's driving that continued activity? Thanks.

Yeah, no. Pre we, um

As we?

Great. Thank you.

This concludes our question and answer session. I would like to turn the conference over to Bobby. O sandri for any closing, remarks.

Thank you, everyone for attending today's call in the third quarter of 2025, we experienced strong demand for our products, despite some Market volatility more important, our team members, maintain a leadership mindset and accelerated, their efforts to identify, and capture operational opportunities.

Giving their remarkable discipline and extraordinary determination. We achieved strong results for the quarter as such. I would like to extend my deepest appreciation for their efforts.

Moving forward.

We must continue our work with an unwavering focus on team member safety and well-being, support our key customers growth, and close our operational gaps. As a result, we can achieve our vision to be the best and most respected company in our industry, creating a better future for our team members and their families. I look forward to accelerating our efforts and our growth during the remainder of 2025 and Beyond. Thank you. All.

The conference has now concluded, thank you for attending today's presentation. You may now disconnect