The poultry producer’s net sales for the 13 weeks to 26 June 2016 hit $2.04 billion (bn), a drop of 1.2% on the same period in 2015. Its operating income plummeted 37.5% year-on-year, down from $378.4 million (m) in 2015 to $236.6m.
Net income for the quarter was $152.9m while Profit margins fell to 13.9% for the quarter, compared to 20.7% posted at the same time in 2015.
Bill Lovette, chief executive officer, said the results marked progress for the brand.
“During Q2, our results further improved sequentially compared to the last two quarters,” he said. “While our portfolio strategy of a well-balanced exposure to different bird sizes was an important factor, the diversity of our product and broad customer mix, as well as geographic exposure were also important contributors. We structured our portfolio to capture the strong commodity markets while lessening the impact of weaker markets to generate lower volatility and higher margins over the mid to long-term. We are generating the intended results and created a unique and meaningful advantage over competitors with less breadth in their portfolio.”
Lovette praised the company’s Mexican operations for its contribution.
“Our operations in Mexico were a strong contributor to the Q2 results driven by an improved supply/demand environment, better operating performance, and increased synergies with the newly acquired assets. We are continuing to close and have meaningfully narrowed the gap in performance between our legacy and the newly acquired Northern Mexico operations. To further diversify our Mexico operations and grow our value-added segment, we are initiating a strategy to leverage our premium Pilgrim's name while continuing to pursue opportunities through the popular Del Dia brand.”
Pilgrim’s Pride also unveiled a new range of products for its prepared foods division.
“To demonstrate our commitment to growing our Prepared Foods operations and to further leverage our leadership in the ABF market as well as our recent announcement to enter into organic Fresh Chicken, we will launch new ABF veg-fed artisanal chicken sausages,” said Lovette. “These products will be fully cooked, minimally processed using all natural and no artificial ingredients or nitrites. Similar to our ABF veg-fed and organic Fresh Chicken programs, this represents our effort to better resonate with new consumer trends for more natural products while adding further value to our portfolio.”