Pilgrim’s Pride Corporation (NASDAQ: PPC) reported a sharp decline in third-quarter 2026 earnings as weaker commodity pricing and higher grain costs pressured its U.S. and Mexico operations, while lower-priced European pork supply weighed on results in Europe.
For the quarter ended September 27, net revenue fell 2.2% to $4.65 billion from $4.76 billion a year earlier. Gross profit dropped to $333.7 million from $659.4 million, and operating income declined to $191.5 million from $492.6 million.
Net income was $116.3 million, compared with $343.1 million in the prior-year quarter, while diluted earnings per share fell to $0.49 from $1.44. Adjusted EPS, a non-GAAP measure, was also $0.49, down from $1.52.
Adjusted EBITDA decreased to $316.3 million from $633.1 million, reducing the adjusted EBITDA margin to 6.8% from 13.3%. Selling, general and administrative expenses fell to $142.2 million from $165.0 million, primarily because of lower legal settlement expense and incentive compensation costs, but the reduction was not enough to offset weaker gross profit.
Pricing and feed costs pressure regional results
The U.S. remained Pilgrim’s Pride’s largest business, generating $2.68 billion of quarterly revenue. Adjusted operating income fell to $105.8 million from $403.7 million, and the adjusted operating margin contracted to 3.9% from 14.2%. The company attributed the decline to lower year-over-year commodity market pricing and higher grain costs. Growth in Prepared Foods volumes, improved live performance and better plant yields in the Fresh business provided partial offsets.
European revenue was $1.37 billion, with adjusted operating income of $63.4 million and an adjusted operating margin of 4.6%. A year earlier, the region produced adjusted operating income of $71.3 million on a 5.1% margin. Pilgrim’s Pride said the profit decline primarily reflected lower-priced European pork supply.
Mexico generated revenue of $599.1 million, up from $530.2 million, but adjusted operating income declined to $22.3 million from $39.0 million. Its adjusted operating margin narrowed to 3.7% from 7.4%, mainly because of lower market pricing and higher grain costs.
For the first nine months of 2026, companywide net sales were $13.81 billion, compared with $13.98 billion in the prior-year period. Adjusted EBITDA declined to $984.4 million from $1.85 billion. Nine-month adjusted EPS was $1.65, versus $4.54 a year earlier.
Industry supply rises as key product prices remain weak
The presentation showed modest year-over-year expansion in several U.S. chicken supply indicators. Intended pullet placements rose 1.1% in the third quarter, the broiler layer flock increased 1.4%, and eggs set grew 1.0%. Broiler placements were 0.7% above year-earlier levels, although eggs per 100 layers declined 0.4% and hatchability was 0.2 percentage point lower.
At the same time, industry cold-storage supplies ended the quarter 5.0% below the prior year and 4.7% below the five-year average. Inventories declined across breast meat, wings, dark meat, paws and feet.
Despite lower inventories, the jumbo chicken cutout remained below both year-earlier levels and the five-year average during the quarter. Boneless and skinless breast meat, tenders and wings also trailed those benchmarks, while leg-quarter pricing was above both. Whole-bird pricing was below the five-year average.
Investment continues amid commodity uncertainty
Pilgrim’s Pride recorded $217 million of capital spending in the third quarter, following $235 million in the first quarter and $230 million in the second. The company said continued investment in strategic projects is intended to support key customers’ growth, diversify its portfolio and improve operations.
On feed inputs, the presentation indicated that U.S. and global corn stocks entered the 2026/27 period at multi-year highs. Stocks are expected to decline because of lower U.S. acreage and yields and weak European Union production, partly offset by normalized Argentine yields. The company also noted that the projected U.S. corn stocks-to-use ratio remained above 10%. Global soybean stocks were forecast to remain broadly flat year over year as continued Brazilian acreage expansion supports production and global crushing demand remains strong.
Pilgrim’s Pride cautioned that actual results could be affected by poultry-market conditions, future product and feed-ingredient pricing, animal-disease outbreaks, product contamination or recalls, customer losses, competitive pricing pressure, foreign-exchange movements, trade disruptions and legal proceedings. The company also identified leverage, regulatory changes, cybersecurity incidents and disruptions to international markets and distribution channels as potential risks.
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