US chicken group Pilgrim’s Pride has reported a 37.5% fall in operating income for the second quarter of 2016 – down to US$237m from US$378m in the same period a year ago.

Net sales dipped by 1.2% to US$2.03bn in the first half of the year from US$2.05bn previously. Net income for the quarter was US$152.9m.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

However, CEO Bill Lovette said the company had generated “the intended results and created a unique and meaningful advantage over competitors with less breadth in their portfolio”.

“During Q2, our results further improved sequentially compared to the last two quarters, Lovette said. “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.”

“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,” Lovette said. “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.”

Lovette said Pilgrim’s, which is majority-owned by Brazil’s JBS, intended to launch a range of ABF veg-fed artisanal chicken sausages “to demonstrate our commitment to growing our Prepared Foods operations and to further leverage our leadership in the ABF”. The move follows the company’s recent decision to enter into organic Fresh Chicken.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The new product will be fully cooked and minimally processed using all natural and no artificial ingredients or nitrites, Lovette said. “Similar to our ABF veg-fed and organic Fresh Chicken programme, this represents our effort to better resonate with new consumer trends for more natural products while adding further value to our portfolio.”

Lovette said the new line, together with previously-announced investments at its processing facility in Moorefield, West Virginia,  “signify our commitment to Prepared Foods as an important source of future earnings growth while lessening the impact of volatile commodity markets in the long run”.

Last month, Pilgrim’s received approval for a US$24m expansion project that will expand production for retail channels at its poultry processing complex in Mayfield, Kentucky.

Earlier this year, the company detailed a US$190m strategic capital investment plan. Pilgrim’s said the cash would be used to “enhance growth” with key retailers as well as increasing production of its Pilgrim’s Pierce Chicken brand.