Dive Brief:
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Pilgrim's Pride posted consolidated net sales of $2.79 billion, up 37.4% from the $2.49 million posted for the same quarter last year, the company said in a statement. Net income for the period was up to $232.7 million, versus $98.7 million from the third quarter of 2016.
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The Greeley, Colorado-based poultry company said its recent acquisition of Ireland-based Moy Park, which closed in September, is expected to open up potential opportunities in Europe, aligning with strategic priorities and expanding its geographical and brands footprint.
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"The results once again demonstrated the strength and diversity of our portfolio of bird sizes, and is what fundamentally differentiates us from the competition, giving us the potential to reduce volatility and generate higher margins over time," Pilgrim's Pride CEO Bill Lovette in a statement. "Despite greater availability of alternative protein, we saw strong demand for chicken during grilling season and we expect a continuation of chicken as a choice protein in domestic and international markets."
Dive Insight:
It's been a busy year for Pilgrim’s Pride, which is majority owned by the scandal-plagued Brazilian meatpacking company JBS. The company purchased Moy Park, the Irish poultry processor that had previously been a JBS subsidiary, this fall — an acquisition that enabled it to expand its reach globally, boost revenue and create a more diverse, stable supplier of chicken.
The company posted sales increases during the third quarter in the U.S., Mexico and Europe compared to the same period in 2016, showing that its earnings and global reach are both proceeding. CEO Lovette indicated in the earnings report that the company had improved the profitability of acquired assets in Mexico and believes that it has both "the method and the team to continue to grow the profitability of its European business."
Continuing to expand its geographic footprint is clearly part of the plan. Currently, Pilgrim's Pride has a workforce of about 52,000 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico, Mexico, the U.K, Ireland and continental Europe.
The company has been active on the M&A front and also in consolidating operations. Besides the Moy Park purchase, the company's 2016 acquisition of GNP Company, a Midwest-based premium branded chicken provider, helped Pilgrim's expand its antibiotic-free and organic lines of better-for-you-chicken products. And just last month, the company announced it was closing its Luverne, Minnesota, processing facility in order to shift production and equipment to more efficient nearby operations.
Online sales have been going well for the company's Just Bare organic brand. Lovette told analysts that it is now the top-selling brand on AmazonFresh and that Pilgrim's Pride is the biggest producer of organic chicken in the U.S.
As consumers increasingly demand more protein, companies, especially chicken processors such as Pilgrim's Pride, are poised to benefit. Per-capita chicken consumption in the U.S. has increased recently — Americans eat nearly twice as much chicken (89 pounds per year) than they do beef and pork (54 and 50 pounds, respectively.)
Following announcing of the earnings report after the market closed on Tuesday, the company's shares jumped $2.36, or 7.75%, to $32.82 a share.