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In a press release dated July 28th Pilgrim’s Pride (PPC) announced results for the 2nd Quarter of FY 2021 ending June 27th.
The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)
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Fabio Sandri CEO |
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Second Quarter Ending
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June 27th 2021
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June 28th 2020
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Difference (%)
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Sales:
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$3,637,698
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$2,824,023
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+28.8
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Gross profit:
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$380,241
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$119,859
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+217.2
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Operating income:
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$(123,131)1
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$27,289
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-551.2
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Pre-tax Income
Net Income
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$(176,315)
$(166,687)
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$(9,356)
$(6,036)
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-1,784.0
-2661.5
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Diluted earnings per share:
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$(0.68)
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$(0.02)
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-3,300.0
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Gross Margin (%)
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10.5
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4.2
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+150.0
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Operating Margin (%)
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(3.4)
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1.0
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-440.0
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Profit Margin (%)
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(4.6)
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(0.2)
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-2,200.0
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Long-term Debt:
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$2,370,115
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$2,404,307
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-1.4
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12 Months Trailing:
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Return on Assets (%)
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3.0
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Return on Equity (%)
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(1.3)
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Operating Margin (%)
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2.7
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Profit Margin (%)
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(0.3)
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Total Assets
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$7,748,845
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$7,474,497
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+3.6
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Market Capitalization
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$5,427,000
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Note 1. Increase of $410 million in SGA compared to Q2 2020 presumed to reflect DOJ and legal settlements
52-Week Range in Share Price: $14.06 to $26.28 50-day Moving average $$21.90
Market Close Tuesday 27th pre-release $22.30. Open Wednesday 28th post-release $21.73
Forward P/E 12.6 Beta 1.1
In commenting on the Q2 results, Fabio Sandri, Chief Executive Officer of Pilgrim’s Pride stated, “Our second quarter results reflect a shift to more normal patterns in the U.S. as we saw a slight increase in retail store trips and more foodservice locations reopened. Our U.S. business turned in a solid operational performance despite higher and more volatile input costs and product-mix issues resulting from continued, albeit improving, labor challenges. Our big bird business performed very well on commodity pricing that has remained consistently near or above historical ranges. Our foodservice business was stronger than anticipated as restrictions continued to ease, boosting demand back above 2019 levels. With consumers’ continued emphasis on the retail channel, we further expanded our retail branded presence. We grew our branded consumer packaged foods business in the second quarter by 215% by investing in our Just Bare® and Pilgrim’s® brands at retail and in e-commerce.
In reference to non-U.S. activities Sandri noted “Our Mexico business had another strong quarter, driven by a balanced supply to demand equation and continuous improvements in operational performance, while effectively managing higher grain pricing and supplying our customers with Fresh and Prepared Foods under the Pilgrim’s®, Del Dia® and Alamesa® brands.
With regard to the E.U. and U.K. Sandri commented “In Q2, although challenged by increasing grain costs, Moy Park improved EBIT by 7% vs. the first quarter 2021. Moy Park continue to deliver operational efficiencies, better agricultural performance and improved yields to help offset grain cost and labor challenges. Pilgrim’s UK has been affected by low hog prices and rising grain costs. Despite similar labor challenges, the Pilgrim’s UK operations have also improved its margins from the same period last year.”