Pilgrim’s Pride Corp. reported its third-quarter 2020 financial results this week, revealing net income of $33.91 million, down sharply from $110.09 million during the same quarter in 2019. Net sales during the quarter were higher at $3.08 billion, up from $2.78 billion in the third quarter of 2019.
The company reported that demand in the U.S. is recovering. In fact, it said its retail and quick-service restaurant business is stronger than a year ago, even while volatility and challenging conditions in commodity segments remain.
“Once again, we are grateful to our team for their continued commitment, dedication and hard work in supporting our ability to keep our team members safe and healthy and allowing us the capability to maintain production and supply to our customers during this unprecedented crisis,” Pilgrim's chief executive officer Fabio Sandri stated. “Although conditions have been improving, the markets have remained volatile and challenging in [the third quarter] as a result of COVID-19. However, our diversified strategy has continued to mitigate the tough environment and produce the expected results in relative performance to industry competition and deliver more resilient performance, regardless of changes in specific market conditions.”
During the third quarter, Sandri said the U.S. and Mexico rebounded from a difficult first half, with Mexico recording one of the strongest third quarters in its history. Europe also continued to improve despite the increase in operating costs related to the COVID-19 pandemic.
“We remain agile and are continuing to adapt our operations to changes in market conditions,” he added.
Sandri relayed that commodity large-bird deboning was the most challenged during the quarter.
“Operationally, however, we continue to improve our relative performance versus the industry across all our business units, including commodity segments. We also continue to adapt quickly to changes in channel demand by adjusting the mix of our production capabilities, supported by our close partnerships with key customers, strong focus in execution by our team members, the geographical diversity of our footprint and our presence across all bird size categories.”
After a very difficult first half in 2020, Sandri said Mexican operations delivered great results -- one of the strongest third quarters in the company's history in Mexico -- despite the unfavorable mix impact and added operating costs relative to the same period last year.
“A normalization in economic activities, an improved supply/demand balance in the market, a stronger peso and a very good operational performance all contributed to the strength. We are continuing to invest in our Del Dia and premium Pilgrim’s brands (both prepared and fresh) as well as seeking more market share in the modern channel, which will bring more stable margins to our operations,” he said.
Pilgrim’s European chicken operations continued to improve, driven by exposure to retail as well as a recovery in foodservice demand, particularly from quick-service restaurants, despite the significant impact of COVID-19 on the operations.