# Pilgrims Pride Corp: Form 10-Q for the period ended Jun 29, 2025

- Company: [Pilgrims Pride Corp](/companies/ppc.md) (CIK 802481)
- Form: 10-Q
- Filed: 2025-07-31
- Accepted by EDGAR: Jul 30, 2025, 18:31 ET
- Period: 2025-06-29
- Accession: 0000802481-25-000110
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/802481/000080248125000110/ppc-20250629.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/802481/000080248125000110/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-29.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-03-31 to 2025-06-29 | $4.76bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2024-12-30 to 2025-06-29 | $9.22bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-03-31 to 2025-06-29 | $4.04bn | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2024-12-30 to 2025-06-29 | $7.95bn | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-03-31 to 2025-06-29 | $715.3m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2024-12-30 to 2025-06-29 | $1.27bn | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-03-31 to 2025-06-29 | $199.5m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2024-12-30 to 2025-06-29 | $333.2m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-03-31 to 2025-06-29 | $512.3m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-12-30 to 2025-06-29 | $916.8m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-03-31 to 2025-06-29 | $42.5m | us-gaap:InterestExpense |
| Interest expense | 6 months, 2024-12-30 to 2025-06-29 | $84.2m | us-gaap:InterestExpense |
| Income tax | 3 months, 2025-03-31 to 2025-06-29 | $119.6m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2024-12-30 to 2025-06-29 | $213.7m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-03-31 to 2025-06-29 | $355.5m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-12-30 to 2025-06-29 | $651.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-03-31 to 2025-06-29 | $1.49 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-12-30 to 2025-06-29 | $2.73 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-03-31 to 2025-06-29 | $1.50 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-12-30 to 2025-06-29 | $2.75 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-03-31 to 2025-06-29 | 238,427,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2024-12-30 to 2025-06-29 | 238,354,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2024-12-30 to 2025-06-29 | $622.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2024-12-30 to 2025-06-29 | $254.9m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 6 months, 2024-12-30 to 2025-06-29 | $1.50bn | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2025-06-29 | $849.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-29 | $4.26bn | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-29 | $10.12bn | us-gaap:Assets |
| Current liabilities | at 2025-06-29 | $2.62bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-29 | $6.37bn | us-gaap:Liabilities |
| Current portion of debt | at 2025-06-29 | $865.0k | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-06-29 | $3.74bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 45,426 characters.

### Executive Summary

### Overview

Pilgrim’s Pride Corporation (referred to herein as “Pilgrim’s,” “PPC,” “the Company,” “we,” “us,” “our,” or similar terms) is one of the largest chicken producers in the world, with operations in the United States (“U.S.”), the United Kingdom (“U.K.”), Mexico, France, Puerto Rico, the Netherlands and the Republic of Ireland. We reported net income attributable to Pilgrim’s of $651.6 million, or $2.73 per diluted common share, and income before tax totaling $866.0 million, for the six months ended June 29, 2025. These operating results included net sales of $9.2 billion, gross profit of $1.3 billion and $622.1 million of cash provided by operating activities. We generated a consolidated operating margin of 9.9%. For the six months ended June 29, 2025, we generated EBITDA and Adjusted EBITDA of $1.1 billion and $1.2 billion, respectively. A reconciliation of net income to EBITDA and Adjusted EBITDA is included below.

### Global Economic Conditions

Our business is subject to global inflationary trends. U.S. inflation rose slightly during the second quarter of 2025 driven by policy changes, supply chain dynamics, and consumer spending behavior. The U.K. saw an increase in inflation during the second quarter of 2025 due to higher energy costs and increase in wages, while the E.U. region saw a continued decrease in the inflation rate. The Russia-Ukraine war's impact on the global feed ingredient and energy markets continues to be less pronounced than during the initial onset of the war, but there remain many risks and uncertainties that may impact global markets. In Mexico, inflation continued to increase during the second quarter of 2025 partially driven by increased food prices. The peso strengthened against the U.S. dollar during the second quarter of 2025, although future trends will be impacted by economic uncertainties in Mexico and with their primary trading partners, such as the U.S.

We are monitoring changes in tariffs and trade policies both in the U.S. and throughout other countries where we operate and do business. Changes to these policies may impact our export sales and international operations. Our U.S. business is primarily characterized with inputs being made in country and our products being sold in country, demonstrated by our export sales from the U.S. accounting for less than 3% of our total net sales. The impact of trade policy changes is uncertain and evolving; however, we do not anticipate material impacts to our results of operations. We will continue to monitor potential impacts and take mitigation actions as necessary.

We generally respond to these challenges in global economic conditions through discussions with customers to mitigate the impact of extraordinary costs we experience. We also continue to focus on operational initiatives that aim to deliver labor efficiencies, better agricultural performance and improved yields.

### Raw Materials and Pricing

Our U.S. and Mexico segments use corn and soybean meal as the main ingredients for feed production, while our Europe segment uses wheat, soybean meal and barley as the main ingredients for feed production. The following table reflects the highest and lowest prices reached on nearby futures for one bushel of corn, one ton of soybean meal, and one metric ton of wheat during the current and previous years:

| 2025 | Corn(a) Highest Price (In whole dollars) | Lowest Price | Soybean Meal(a) Highest Price | Lowest Price | Wheat(a) Highest Price (In whole pounds sterling) | Lowest Price |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Second Quarter | 4.90 | 4.10 | 299.6 | 270.9 | 173.6 | 138.2 |
| First Quarter | 5.02 | 4.36 | 315.8 | 285.9 | 185.6 | 165.0 |
| 2024 |  |  |  |  |  |  |
| Fourth Quarter | 4.54 | 4.01 | 350.0 | 279.5 | 190.5 | 174.0 |
| Third Quarter | 4.18 | 3.62 | 387.0 | 303.4 | 196.9 | 168.7 |
| Second Quarter | 4.65 | 3.97 | 386.5 | 328.3 | 202.8 | 165.1 |
| First Quarter | 4.67 | 4.00 | 381.2 | 327.8 | 184.5 | 153.7 |

(a) We obtain corn and soybean meal prices from the Chicago Board of Trade, and we obtain wheat prices from the London International Financial Futures and Options Exchange.

U.S. commodity market prices for chicken products continued to trend above the historical five-year average and above the prior year average through the second quarter of 2025. The higher than average prices was primarily driven by elevated boneless breast pricing that exceeded normal seasonal movements throughout the quarter. Prices rose sharply in April, stabilized and peaked in May, then experienced a significant decline in June. Per the June 2025 U.S. Department of Agriculture (or “USDA”) report on poultry slaughter, estimated industry ready-to-cook production during the second quarter of 2025 decreased by 0.2% compared to prior year levels, primarily due to one additional business day in May 2024 and heavier average liveweights.

During the second quarter of 2025, the U.S. chicken market experienced firm volume demand, supported by growth in the retail and foodservice channels early in the quarter. Retail demand remained resilient throughout the quarter, while foodservice demand exhibited growth despite mild demand pressure near the end of the quarter. Export volume shipments declined about 1.8% from prior year levels, but pricing remained stable on resilient demand. Considering the strength in domestic demand and steady exports, cold storage inventories remained low during the second quarter. Chicken cold storage inventories ended May 1.0% above prior year levels, though remained below the historical five-year average, primarily due to increases in breast meat and wing stocks.

Combined domestic volume demand growth in retail and foodservice was sufficient to absorb broiler production and maintain low levels of cold storage supply through April and May, supporting strong seasonal improvements in U.S. chicken market pricing. In June, however, supply began to outpace demand, leading to a notable reduction in breast meat market prices by the end of the quarter. Despite this shift, jumbo cutout pricing ended the quarter above the historical five-year average with jumbo cutout pricing leveling off in July.

In the second quarter of 2025, the U.K. chicken market grew by 2.1% year-over-year, primarily driven by a 3.7% increase in average bird weight. Imports from the E.U. were constrained due to avian influenza outbreaks, but increased volumes from Brazil and Ukraine helped offset the shortfall. Despite stable grain prices compared to the second quarter of 2024, chicken prices rose, driven by production capacity constraints and the implementation of a mandated reduction in stocking density to 30kg/m². The market remains tight, with limited domestic flexibility and continued reliance on diversified import sources to maintain supply stability.

Commodity prices for chicken in Mexico decreased during the second quarter of 2025, though were above the average prior year prices. Market corn prices in Mexico were higher than the same quarter in the prior year though remained lower than the historical five-year average price levels. Soybean meal prices in Mexico continued to decrease throughout the second quarter of 2025.

U.K. market prices for pork products grew during the second quarter of 2025 from market pressure, especially the additional national insurance tax and wage increase; while the market for live pigs reduced circa 2.3% with an increasing price differential between U.K. and E.U. pork prices. E.U. pork prices recovered during the second quarter of 2025, primarily because of the reinstatement of Germany's foot and mouth disease-free status, which put more product into the market.

U.K. pig production remained above prior-year levels by approximately 1.6% in the second quarter of 2025, according to the U.K. Agriculture and Horticulture Development Board. This increase was mainly driven by a higher pig kill rate, with average weights in line with prior year levels.

Global market prices for the remainder of the year will depend on (1) the evolution of foodservice, retail and export meat demand, (2) factors such as feed production input costs, further spread of avian influenza, or other bird diseases, both domestically and abroad, (3) uncertainty surrounding the general economy, (4) shifts in trade policy that could influence consumer spending dynamics in price-sensitive market segments, and (5) overall protein supply.

### Special Cash Dividend

On March 13, 2025, the Company declared a special dividend of $6.30 per share, to stockholders of record as of April 3, 2025. On April 17, 2025, the Company paid that special dividend from retained earnings of approximately $1.5 billion. The Company used cash on hand to fund the special cash dividend.

### Reportable Segments

We operate in three reportable segments: U.S., Europe, and Mexico. We measure segment profit as operating income. Certain corporate expenses are allocated to the Mexico and Europe reportable segments based upon various apportionment methods for specific expenditures incurred related thereto with the remaining amounts allocated to the U.S. For additional information, see “Note 18. Reportable Segments” of our Condensed Consolidated Financial Statements included in this quarterly report.

### Results of Operations

### Three Months Ended June 29, 2025 Compared to the Three Months Ended June 30, 2024

*Net sales.* Net sales generated in the three months ended June 29, 2025 increased $198.1 million, or 4.3%, from net sales generated in the three months ended June 30, 2024. The following table provides net sales information:

*(In thousands, except percent data)*

| Sources of net sales Amount | Three Months Ended June 29, 2025 Percent | Change from Three Months Ended June 30, 2024 Sales Volume Sales Prices | Foreign Currency Translation Impact | Impact on Change from Three Months Ended June 30, 2024 (In percent) |  |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. | $2,820,385 | $156,420 | 5.9% | 1.2% | 4.7% | —% |
| Europe | 1,371,270 | 69,729 | 5.4% | (2.3)% | 2.0% | 5.7% |
| Mexico | 565,710 | (28,098) | (4.7)% | 0.4% | 7.2% | (12.3)% |
| Total net sales | $4,757,365 | $198,051 | 4.3% |  |  |  |

*U.S. Reportable Segment.* U.S. net sales generated in the three months ended June 29, 2025 increased $156.4 million, or 5.9%, from U.S. net sales generated in the three months ended June 30, 2024 primarily due to an increase in net sales per pound of $125.5 million, or 4.7 percentage points, and an increase in sales volume of $30.9 million, or 1.2 percentage points. The increase in net sales per pound was driven primarily by favorable market pricing conditions and shift in product mix. The second quarter average commodity chicken market prices for higher value cuts were above prior year levels.

*Europe Reportable Segment.* Europe net sales generated in the three months ended June 29, 2025 increased $69.7 million, or 5.4%, from Europe net sales generated in the three months ended June 30, 2024 primarily due to the favorable impact of foreign currency translation and an increase in net sales per pound of $73.7 million, or 5.7 percentage points, and $25.9 million, or 2.0 percentage points, respectively. The increase in net sales was partially offset by a decrease in sales volume of $29.9 million, or 2.3 percentage points. The increase in net sales per pound was primarily due to the pass through of higher input costs, such as feed, labor, and utilities.

*Mexico Reportable Segment.* Mexico net sales generated in the three months ended June 29, 2025 decreased $28.1 million, or 4.7%, from Mexico net sales generated in the three months ended June 30, 2024 due to the unfavorable impact of foreign currency translation of $73.5 million, or 12.3 percentage points. This decrease was partially offset by an increase in net sales per pound and sales volume of $42.9 million, or 7.2 percentage points, and $2.5 million, or 0.4 percentage points, respectively. The increase in net sales per pound was driven by an increase in commodity chicken prices based on market requirements. The increase in sales volume was driven by shifts in product mix.

*Gross profit and cost of sales.* Gross profit increased by $23.7 million, or 3.4%, from $691.6 million generated in the three months ended June 30, 2024 to $715.3 million generated in the three months ended June 29, 2025. The following tables provide information regarding gross profit and cost of sales information:

*(In thousands, except percent data)*

| Components of gross profit Amount | Three Months Ended June 29, 2025 Three Months Ended Percent | Change from Three Months Ended June 30, 2024 June 29, 2025 | June 30, 2024 | Percent of Net Sales |  |
| --- | ---: | ---: | ---: | ---: | ---: |
| Net sales | $4,757,365 | $198,051 | 4.3% | 100.0% | 100.0% |
| Cost of sales | 4,042,070 | 174,382 | 4.5% | 85.0% | 84.8% |
| Gross profit | $715,295 | $23,669 | 3.4% | 15.0% | 15.2% |

36

*(In thousands, except percent data)*

| Sources of gross profit Amount | Three Months Ended June 29, 2025 Percent | Change from Three Months Ended June 30, 2024 |  |
| --- | ---: | ---: | ---: |
| U.S. | $489,242 | $36,903 | 8.2% |
| Europe | 124,133 | 10,263 | 9.0% |
| Mexico | 101,920 | (23,497) | (18.7)% |
| Total gross profit | $715,295 | $23,669 | 3.4% |

*(In thousands, except percent data)*

| Sources of cost of sales Amount | Three Months Ended June 29, 2025 Percent | Change from Three Months Ended June 30, 2024 |  |
| --- | ---: | ---: | ---: |
| U.S. | $2,331,143 | $119,517 | 5.4% |
| Europe | 1,247,137 | 59,466 | 5.0% |
| Mexico | 463,790 | (4,601) | (1.0)% |
| Total cost of sales | $4,042,070 | $174,382 | 4.5% |

*U.S. Reportable Segment.* Cost of sales incurred by our U.S. operations during the three months ended June 29, 2025 increased $119.5 million, or 5.4%, from cost of sales incurred by our U.S. segment during the three months ended June 30, 2024. The increase in cost of sales was primarily driven by an increase in cost per pound sold of $93.8 million, or 4.2 percentage points and an increase in sales volume of $25.7 million, or 1.2 percentage points. The increase from prior year in cost per pound sold is primarily due to increased fleet, grower pay, labor, packaging, utilities, and other operating costs. These increases were partially offset by a decrease in live operations costs driven by declining feed ingredients costs, specifically soybean meal. Corn market prices increased approximately 9% from prior year levels and soybean meal market prices decreased approximately 16% from prior year levels.

*Europe Reportable Segment.* Cost of sales incurred by our Europe operations during the three months ended June 29, 2025 increased $59.5 million, or 5.0%, from cost of sales incurred by our Europe segment during the three months ended June 30, 2024. The increase in cost of sales was primarily driven by the unfavorable impact of foreign currency translation and an increase in cost per pound sold of $67.5 million, or 5.7 percentage points, and $19.3 million, or 1.6 percentage points, respectively. Partially offsetting these increases was a decrease in sales volume of $27.3 million, or 2.3 percentage points. The increase in cost per pound sold was driven by increases in labor costs, both from higher national insurance costs and higher temporary labor, repairs and maintenance, and utilities costs.

*Mexico Reportable Segment.* Cost of sales incurred by our Mexico operations during the three months ended June 29, 2025 decreased $4.6 million, or 1.0%, from cost of sales incurred by our Mexico segment during the three months ended June 30, 2024. This decrease was driven by the favorable impact of foreign currency translation of $60.3 million, or 12.9 percentage points. Partially offsetting this decrease were increases in cost per pound sold and sales volume of $53.7 million, or 11.5 percentage points, and $2.0 million, or 0.4 percentage points, respectively. The increase in cost was primarily driven by an increase in the cost of commodity ingredients, as well as increased costs from broiler health challenges in our live operations.

*Operating income and SG&A expense.* Operating income increased by $71.5 million, or 16.2%, from income of $440.8 million generated in the three months ended June 30, 2024 to income of $512.3 million generated in the three months ended June 29, 2025. The following tables provide information regarding operating income and selling, general and administrative (“SG&A”) expense:

*(In thousands, except percent data)*

| Components of operating income Three Months Ended Amount | Three Months Ended June 29, 2025 Percent | Change from Three Months Ended June 30, 2024 June 29, 2025 | June 30, 2024 | Percent of Net Sales |  |
| --- | ---: | ---: | ---: | ---: | ---: |
| Gross profit | $715,295 | $23,669 | 3.4% | 15.0% | 15.2% |
| SG&A expense | 199,457 | (14,704) | (6.9)% | 4.2% | 4.7% |
| Restructuring activities | 3,499 | (33,176) | (90.5)% | —% | 0.8% |
| Operating income | $512,339 | $71,549 | 16.2% | 10.8% | 9.7% |

37

*(In thousands, except percent data)*

| Sources of operating income Amount | Three Months Ended June 29, 2025 Percent | Change from Three Months Ended June 30, 2024 |
| --- | ---: | ---: |
| U.S. | $354,987 | $46,999 15.3% |
| Europe | 70,419 | 46,426 193.5% |
| Mexico | 86,933 | (21,876) (20.1)% |
| Total operating income | $512,339 | $71,549 16.2% |
| **Sources of SG&A expense** | **Three Months Ended June 29, 2025** | **Change from Three Months Ended June 30, 2024** |
| **Amount** | **Percent** |  |
|  | **(In thousands, except percent data)** |  |
| U.S. | $134,255 | $(10,096) (7.0)% |
| Europe | 50,215 | (2,987) (5.6)% |
| Mexico | 14,987 | (1,621) (9.8)% |
| Total SG&A expense | $199,457 | $(14,704) (6.9)% |

*(In thousands, except percent data)*

| Sources of restructuring activities Amount | Three Months Ended June 29, 2025 Percent | Change from Three Months Ended June 30, 2024 |  |
| --- | ---: | ---: | ---: |
| Europe | 3,499 | (33,176) | (90.5)% |

*U.S. Reportable Segment.* SG&A expense incurred by our U.S. reportable segment during the three months ended June 29, 2025 decreased $10.1 million, or 7.0%, from SG&A expense incurred by our U.S. reportable segment during the three months ended June 30, 2024. The decrease in SG&A expense resulted primarily from a net decrease in legal settlement expense.

*Europe Reportable Segment.* SG&A expense incurred by our Europe reportable segment during the three months ended June 29, 2025 decreased $3.0 million, or 5.6%, from SG&A expense incurred by our Europe segment during the three months ended June 30, 2024. The decrease in SG&A expense was primarily due to a decrease in payroll costs, partially offset by an unfavorable impact of foreign currency translation.

*Mexico Reportable Segment.* SG&A expense incurred by our Mexico reportable segment during the three months ended June 29, 2025 decreased $1.6 million, or 9.8%, from SG&A expense incurred by our Mexico segment during the three months ended June 30, 2024 primarily due to the favorable impact of foreign currency translation. This decrease was partially offset by an increase in payroll and incentive compensation costs.

*Restructuring activities.* Restructuring activities costs of $3.5 million were recognized in the three months ended June 29, 2025. These charges were incurred by our Europe reportable segment primarily as a result of severance related to back office consolidation.

*Net interest expense.* Net interest expense increased to $31.5 million recognized in the three months ended June 29, 2025 from $15.3 million recognized in the three months ended June 30, 2024. The increase in net interest expense resulted primarily from a prior year gain recognized on early extinguishment of debt and a decrease in interest income earned on excess cash due to lower cash balances in the current year. Partially offsetting these increases in net interest expense was a decrease in interest expense on outstanding borrowings due to the repurchases of outstanding debt.

*Income taxes.* Income tax expense increased to $119.6 million, a 25.1% effective tax rate, for the three months ended June 29, 2025 compared to an income tax expense of $100.7 million, a 23.6% effective tax rate, for the three months ended June 30, 2024. The increase in income tax expense in 2025 resulted primarily from the increase of profit before income taxes.

### Six Months Ended June 29, 2025 Compared to the Six Months Ended June 30, 2024

*Net sales.* Net sales generated in the six months ended June 29, 2025 increased $299.1 million, or 3.4%, from net sales generated in the six months ended June 30, 2024. The following table provides net sales information:

*(In thousands, except percent data)*

| Sources of net sales Amount | Six Months Ended June 29, 2025 Percent | Change from Six Months Ended June 30, 2024 Sales Volume Sales Prices | Foreign Currency Translation Impact | Impact on Change from Six Months Ended June 30, 2024 (In percent) |  |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. | $5,563,574 | $320,277 | 6.1% | 1.5% | 4.6% | —% |
| Europe | 2,602,799 | 33,355 | 1.3% | (2.2)% | 1.1% | 2.4% |
| Mexico | 1,054,001 | (54,506) | (4.9)% | 0.4% | 10.5% | (15.8)% |
| Total net sales | $9,220,374 | $299,126 | 3.4% |  |  |  |

*U.S. Reportable Segment.* U.S. net sales generated in the six months ended June 29, 2025 increased $320.3 million, or 6.1%, from U.S. net sales generated in the six months ended June 30, 2024 primarily due to an increase in net sales per pound and an increase in sales volume of $241.0 million, or 4.6 percentage points, and $79.3 million, or 1.5 percentage points, respectively. The increase in net sales per pound was driven primarily by favorable market pricing conditions and shift in consumer demand to higher value products.

*Europe Reportable Segment.* Europe net sales generated in the six months ended June 29, 2025 increased $33.4 million, or 1.3%, from Europe net sales generated in the six months ended June 30, 2024 primarily due to the favorable impact of foreign currency translation and an increase in net sales per pound of $61.5 million, or 2.4 percentage points, and $28.1 million, or 1.1 percentage points, respectively. The increase in net sales was partially offset by a decrease in sales volume of $56.2 million, or 2.2 percentage points. The increase in net sales per pound was primarily due to the pass through of higher input costs, such as feed, labor, and utilities.

*Mexico Reportable Segment.* Mexico net sales generated in the six months ended June 29, 2025 decreased $54.5 million, or 4.9%, from Mexico net sales generated in the six months ended June 30, 2024 primarily due to the unfavorable impact of foreign currency translation of $175.4 million, or 15.8 percentage points. The decrease in net sales was partially offset by increases in net sales per pound and sales volume of $116.4 million, or 10.5 percentage points, and $4.5 million, or 0.4 percentage points, respectively. The decrease due to the unfavorable impact of foreign currency translation was driven by a year-over-year depreciation of 17% in the Mexican peso against the U.S. dollar due to inflation in the Mexican economy, along with uncertainties impacting the exchange rate. The increase in price per pound sold was driven by an increase in commodity chicken pricing due to increased local consumer demand and lower supply due to bird disease.

*Gross profit and cost of sales.* Gross profit increased by $194.6 million from $1.1 billion generated in the six months ended June 30, 2024 to $1.3 billion generated in the six months ended June 29, 2025. The following tables provide information regarding gross profit and cost of sales information:

*(In thousands, except percent data)*

| Components of gross profit Amount | Six Months Ended June 29, 2025 Six Months Ended Percent | Change from Six Months Ended June 30, 2024 June 29, 2025 | June 30, 2024 | Percent of Net Sales |  |
| --- | ---: | ---: | ---: | ---: | ---: |
| Net sales | $9,220,374 | $299,126 | 3.4% | 100.0% | 100.0% |
| Cost of sales | 7,950,206 | 104,493 | 1.3% | 86.2% | 87.9% |
| Gross profit | $1,270,168 | $194,633 | 18.1% | 13.8% | 12.1% |

39

*(In thousands, except percent data)*

| Sources of gross profit Amount | Six Months Ended June 29, 2025 Percent | Change from Six Months Ended June 30, 2024 |  |
| --- | ---: | ---: | ---: |
| U.S. | $876,864 | $187,233 | 27.1% |
| Europe | 240,437 | 34,402 | 16.7% |
| Mexico | 152,867 | (27,002) | (15.0)% |
| Total gross profit | $1,270,168 | $194,633 | 18.1% |

*(In thousands, except percent data)*

| Sources of cost of sales Amount | Six Months Ended June 29, 2025 Percent | Change from Six Months Ended June 30, 2024 |  |
| --- | ---: | ---: | ---: |
| U.S. | $4,686,710 | $133,044 | 2.9% |
| Europe | 2,362,362 | (1,047) | —% |
| Mexico | 901,134 | (27,504) | (3.0)% |
| Total cost of sales | $7,950,206 | $104,493 | 1.3% |

*U.S. Reportable Segment.* Cost of sales incurred by our U.S. operations during the six months ended June 29, 2025 increased $133.0 million, or 2.9%, from cost of sales incurred by our U.S. segment during the six months ended June 30, 2024. The increase in cost of sales was primarily driven by an increase in sales volume and an increase in cost per pound sold of $68.9 million, or 1.5 percentage points, and $64.1 million, or 1.4 percentage points, respectively. The increase in sales volume was driven by consumer demand. The increase from prior year in cost per pound sold is primarily due to increased labor, fleet, grower pay, packaging, utilities, and other operating costs. These increases were partially offset by a decrease in live operations costs driven by declining feed ingredients costs, specifically soybean meal. Corn market prices increased approximately 5% from prior year levels and soybean meal market prices decreased approximately 17% from prior year levels.

*Europe Reportable Segment.* Cost of sales incurred by our Europe operations during the six months ended June 29, 2025 decreased $1.0 million, from cost of sales incurred by our Europe segment during the six months ended June 30, 2024. The decrease in cost of sales was primarily driven by decreases in sales volume and cost per pound sold of $51.7 million, or 2.2 percentage points, and $5.8 million, or 0.2 percentage points, respectively. Partially offsetting these decreases was the unfavorable impact of foreign currency translation of $56.5 million, or 2.4 percentage points.

*Mexico Reportable Segment.* Cost of sales incurred by our Mexico operations during the six months ended June 29, 2025 decreased $27.5 million, or 3.0%, from cost of sales incurred by our Mexico segment during the six months ended June 30, 2024. The decrease in cost of sales was driven by the favorable impact of foreign currency translation of $150.0 million, or 16.2 percentage points. As noted above, there was a year-over-year depreciation of 17% in the Mexican peso against the U.S. dollar. This decrease was partially offset by an increase in cost per pound sold and sales volume of $118.7 million, or 12.8 percentage points, and $3.8 million, or 0.4 percentage points, respectively. The increase in cost per pound sold was driven by an increase in year-over-year market prices of commodity ingredients, such as corn which increased over 20%, while the average market price of soybean meal during the first half of 2025 was about 4% below prior year levels.

*Operating income and SG&A expense.* Operating income increased by $225.8 million, or 32.7%, from income of $691.1 million generated in the six months ended June 30, 2024 to income of $916.8 million generated in the six months ended June 29, 2025. The following tables provide information regarding operating income and selling, general and administrative (“SG&A”) expense:

*(In thousands, except percent data)*

| Components of operating income Six Months Ended Amount | Six Months Ended June 29, 2025 Percent | Change from Six Months Ended June 30, 2024 June 29, 2025 | June 30, 2024 | Percent of Net Sales |  |
| --- | ---: | ---: | ---: | ---: | ---: |
| Gross profit | $1,270,168 | $194,633 | 18.1% | 13.8% | 12.1% |
| SG&A expense | 333,236 | (1) | —% | 3.6% | 3.7% |
| Restructuring activities | 20,111 | (31,123) | (60.7)% | 0.2% | 0.6% |
| Operating income | $916,821 | $225,757 | 32.7% | 9.9% | 7.7% |

40

*(In thousands, except percent data)*

| Sources of operating income Amount | Six Months Ended June 29, 2025 Percent | Change from Six Months Ended June 30, 2024 |
| --- | ---: | ---: |
| U.S. | $673,793 | $186,388 38.2% |
| Europe | 119,490 | 64,381 116.8% |
| Mexico | 123,538 | (25,012) (16.8)% |
| Total operating income | $916,821 | $225,757 32.7% |
| **Sources of SG&A expense** | **Six Months Ended June 29, 2025** | **Change from Six Months Ended June 30, 2024** |
| **Amount** | **Percent** |  |
|  | **(In thousands, except percent data)** |  |
| U.S. | $203,071 | $845 0.4% |
| Europe | 100,836 | 1,144 1.1% |
| Mexico | 29,329 | (1,990) (6.4)% |
| Total SG&A expense | $333,236 | $(1) —% |

*(In thousands, except percent data)*

| Sources of restructuring activities charges Amount | Six Months Ended June 29, 2025 Percent | Change from Six Months Ended June 30, 2024 |  |
| --- | ---: | ---: | ---: |
| Europe | $20,111 | $(31,123) | (60.7)% |

*U.S. Reportable Segment.* SG&A expense incurred by our U.S. reportable segment during the six months ended June 29, 2025 increased $0.8 million, or 0.4%, from SG&A expense incurred by our U.S. reportable segment during the six months ended June 30, 2024. The increase in SG&A expense resulted primarily from an increase in incentive compensation and marketing costs, partially offset by a decrease in legal settlement expense.

*Europe Reportable Segment.* SG&A expense incurred by our Europe reportable segment during the six months ended June 29, 2025 increased $1.1 million, or 1.1%, from SG&A expense incurred by our Europe segment during the six months ended June 30, 2024. The increase in SG&A expense was primarily due to the unfavorable impact of foreign currency translation, partially offset by a decrease in payroll costs, professional fees, and insurance.

*Mexico Reportable Segment.* SG&A expense incurred by our Mexico reportable segment during the six months ended June 29, 2025 decreased $2.0 million, or 6.4%, from SG&A expense incurred by our Mexico segment during the six months ended June 30, 2024. The primary driver of the decrease in SG&A expense was the favorable impact of foreign currency translation due to the year-over-year depreciation of the Mexican peso against the U.S. dollar. This decrease was partially offset by an increase in payroll and incentive compensation costs.

*Restructuring activities.* Restructuring activities costs of $20.1 million were recognized in the six months ended June 29, 2025. These charges were incurred by our Europe reportable segment primarily as a result of primarily severance related to back office consolidation and warehouse closure costs.

*Net interest expense.* Net interest expense increased to $48.2 million recognized in the six months ended June 29, 2025 from $46.2 million recognized in the six months ended June 30, 2024. The increase in net interest expense resulted primarily from a prior year gain recognized on early extinguishment of debt, partially offset by an increase in interest income earned on excess cash due to higher average cash balances in the six months ended June 29, 2025 compared to the six months ended June 30, 2024, and a decrease on interest expense on outstanding borrowings due to the repurchases of outstanding debt.

*Income taxes.* Income tax expense increased to $213.7 million, a 24.7% effective tax rate, for the six months ended June 29, 2025 compared to an income tax expense of $152.7 million, a 23.3% effective tax rate, for the six months ended June 30, 2024. The increase in income tax expense resulted primarily from the increase in profit before income taxes.

### Liquidity and Capital Resources

The following table presents our available sources of liquidity as of June 29, 2025:

*(In millions)*

| Sources of Liquidity | Facility Amount | Amount Outstanding | Amount Available |
| --- | ---: | ---: | ---: |
| Cash and cash equivalents | $— | $— | $849.0 |
| Borrowing arrangements: |  |  |  |
| U.S. Credit Facility(a) | 850.0 | — | 825.8 |
| Mexico Credit Facility(b) | 58.9 | — | 58.9 |
| Europe Credit Facility(c) | 205.9 | — | 205.9 |

(a) Availability under the U.S. Credit Facility is also reduced by our outstanding standby letters of credit. Standby letters of credit outstanding at June 29, 2025 totaled $24.2 million.

(b) The U.S. dollar-equivalent of the facility amount under the Mexico Credit Facility is $58.9 million (Mex$1.1 billion).

(c) The U.S. dollar-equivalent of the facility amount under the Europe Credit Facility is $205.9 million (£150 million).

On March 13, 2025, the Company declared a special dividend of $6.30 per share, to stockholders of record as of April 3, 2025. On April 17, 2025, the Company paid that special dividend from retained earnings of approximately $1.5 billion. The Company used cash on hand to fund the special cash dividend.

On July 30, 2025, the Company declared a special dividend of $2.10 per share, to stockholders of record as of August 20, 2025. The Company will fund the special cash dividend using cash on hand. The special cash dividend is payable on September 3, 2025 for an approximate amount of $500.0 million.

We expect cash flows from operations, combined with availability under our credit facilities, to provide sufficient liquidity to fund current obligations, projected working capital requirements, maturities of long-term debt and capital spending for at least the next twelve months. This includes the construction of a new prepared foods facility in Walker County, Georgia which we expect to be completed in the first half of 2027.

### Historical Flow of Funds

*(In millions)*

| Cash Flows from Operating Activities | Six Months Ended June 29, 2025 | June 30, 2024 |
| --- | ---: | ---: |
| Net income | $652.4 | $501.5 |
| Net noncash expenses | 220.7 | 235.9 |
| Changes in operating assets and liabilities: |  |  |
| Trade accounts and other receivables | (75.0) | 62.4 |
| Inventories | (105.7) | 146.2 |
| Prepaid expenses and other current assets | (17.4) | (43.5) |
| Accounts payable, accrued expenses and other current liabilities | (34.6) | 14.3 |
| Income taxes | 8.0 | 88.6 |
| Long-term pension and other postretirement obligations | (1.5) | 3.7 |
| Other operating assets and liabilities | (24.8) | (19.4) |
| Cash provided by operating activities | $622.1 | $989.7 |

### Net Noncash Expenses

Items necessary to reconcile from net income to cash flow provided by operating activities included net noncash expenses of $220.7 million for the six months ended June 29, 2025. Net noncash expense items included depreciation and amortization of $218.0 million, deferred income tax benefit of $19.5 million, stock-based compensation costs of $14.2 million, loan cost amortization of $2.5 million, losses on property disposals of $2.0 million, loss on early extinguishment of debt of $1.4 million, accretion of discounts related to Senior Notes of $1.2 million, and asset impairment of $0.8 million. Other net noncash items were immaterial.

Items necessary to reconcile from net income to cash flow provided by operating activities included net noncash expenses of $235.9 million for the six months ended June 30, 2024. Net noncash expense items included depreciation and amortization of $211.3 million, asset impairment of $13.4 million, gain on early extinguishment of debt recognized as component of interest expense of $11.2 million, deferred income tax expense of $9.0 million, stock-based compensation costs of $6.8 million, losses on property disposals of $2.7 million, loan cost amortization of $2.6 million, and accretion of discounts related to Senior Notes of $1.3 million. Other net noncash items were immaterial.

### Changes in Operating Assets and Liabilities

The change in trade accounts and other receivables represented a $75.0 million use of cash related to operating activities for the six months ended June 29, 2025. This change resulted from an increase in trade accounts receivable due to a decrease in discounted accounts receivables and an increase in sales from more favorable market pricing. The change in trade accounts and other receivables represented a $62.4 million source of cash related to operating activities for the six months ended June 30, 2024. This change primarily resulted from a decrease in trade accounts receivable due to timing of payments received.

The change in inventories represented a $105.7 million use of cash related to operating activities for the six months ended June 29, 2025. This change resulted primarily from increased input costs and an increase in inventories after higher seasonal sales in the U.K. and in anticipation of higher demand over the summer season. The change in inventories represented a $146.2 million source of cash related to operating activities for the six months ended June 30, 2024. This change resulted primarily from decreased raw material costs, work-in-process inventories due to lower feed ingredient costs, and lower finished goods inventories.

The change in prepaid expenses and other current assets represented a $17.4 million use of cash related to operating activities for the six months ended June 29, 2025. This change resulted primarily from an increase in prepaid indirect taxes in our Mexico and Europe reportable segments and prepaid insurance. The change in prepaid expenses and other current assets represented a $43.5 million use of cash related to operating activities for the six months ended June 30, 2024. This change resulted primarily from an increase in prepaid indirect taxes in our Mexico and Europe reportable segments.

The change in accounts payable, accrued expenses and other current liabilities represented a $34.6 million use of cash related to operating activities for the six months ended June 29, 2025. This change resulted primarily from the payment of incentive compensation accrued for in 2024 and payments of litigation settlements, partially offset by an increase in the days payables outstanding, and increases in accrued payroll and insurance expenses. The change in accounts payable, accrued expenses and other current liabilities represented a $14.3 million source of cash related to operating activities for the six months ended June 30, 2024. This change resulted primarily from timing of payments to our suppliers, a reduction in grain input costs, and timing of legal settlement payments.

The change in income taxes, which includes income taxes receivable, income taxes payable, deferred tax assets, deferred tax liabilities, reserves for uncertain tax positions, and the tax components within accumulated other comprehensive loss, represented a $8.0 million and $88.6 million source of cash for the six months ended June 29, 2025 and June 30, 2024, respectively.

*(In millions)*

| Cash Flows from Investing Activities | Six Months Ended June 29, 2025 | June 30, 2024 |
| --- | ---: | ---: |
| Acquisitions of property, plant and equipment | $(259.3) | $(213.2) |
| Proceeds from property disposals | 2.9 | 4.5 |
| Cash used in investing activities | $(256.4) | $(208.7) |

Capital expenditures were incurred primarily for growth projects, to improve operational efficiencies, system enhancement projects, and reduce costs for the six months ended June 29, 2025.

Capital expenditures were incurred for growth projects, such as the South Georgia protein conversion plant, and to improve operational efficiencies, system enhancement projects, and reduce costs for the six months ended June 30, 2024.

*(In millions)*

| Cash Flows from Financing Activities | Six Months Ended June 29, 2025 | June 30, 2024 |
| --- | ---: | ---: |
| Payments for dividend | $(1,495.5) | $— |
| Payments on revolving line of credit, long-term borrowings and finance lease obligations | (90.7) | (150.9) |
| Payments on early extinguishment of debt | (2.1) | (0.2) |
| Proceeds from contribution of capital under Tax Sharing Agreement with JBS USA Holdings | — | 1.4 |
| Cash provided by (used in) financing activities | $(1,588.3) | $(149.7) |

Payments for dividend during the six months ended June 29, 2025 are related to the special cash dividend that was declared during March 2025 and paid in April 2025. Payments on revolving line of credit, long-term borrowings and finance lease obligations and payments on early extinguishment of debt during the six months ended June 29, 2025, are primarily related to open market repurchases of outstanding senior notes.

Payments on revolving line of credit, long-term borrowings and finance lease obligations during the six months ended June 30, 2024, are primarily related to open market repurchases of outstanding senior notes. The proceeds from contribution of capital under the Tax Sharing Agreement with JBS USA Holdings were a payment of net tax incurred during the tax year 2023. Payments on early extinguishment of debt are transaction fees related to the bond repurchases.

### Long-Term Debt and Other Borrowing Arrangements

Our long-term debt and other borrowing arrangements consist of senior notes, revolving credit facilities and other term loan agreements. For a description, refer to “Note 12. Debt.”

### Reconciliation of Net Income to EBITDA and Adjusted EBITDA

“EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is calculated by adding to EBITDA certain items of expense and deducting from EBITDA certain items of income that we believe are not indicative of our ongoing operating performance consisting of: (1) foreign currency transaction losses, (2) restructuring activities losses, (3) costs related to litigation settlements, and (4) net income attributable to noncontrolling interests. EBITDA is presented because it is used by us and we believe it is frequently used by securities analysts, investors and other interested parties, in addition to and not in lieu of results prepared in conformity with U.S. GAAP, to compare the performance of companies. We believe investors would be interested in our Adjusted EBITDA because this is how our management analyzes EBITDA applicable to continuing operations. We also believe that Adjusted EBITDA, in combination with our financial results calculated in accordance with U.S. GAAP, provides investors with additional perspective regarding the impact of certain significant items on EBITDA and facilitates a more direct comparison of our performance with our competitors. EBITDA and Adjusted EBITDA are not measurements of financial performance under U.S. GAAP. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under U.S. GAAP. Some of the limitations of these measures are:

- They do not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;
- They do not reflect changes in, or cash requirements for, our working capital needs;
- They do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;
- Although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;
- They are not adjusted for all noncash income or expense items that are reflected in our statements of cash flows;
- EBITDA does not reflect the impact of earnings or charges attributable to noncontrolling interests;
- They do not reflect the impact of earnings or charges resulting from matters we consider to not be indicative of our ongoing operations; and
- They do not reflect limitations on or costs related to transferring earnings from our subsidiaries to us.

In addition, other companies in our industry may calculate these measures differently than we do, limiting their usefulness as a comparative measure. Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with U.S. GAAP. You should compensate for these limitations by relying primarily on our U.S. GAAP results and using EBITDA and Adjusted EBITDA only on a supplemental basis.

*(In thousands)*

|  | Six Months Ended June 29, 2025 |
| --- | ---: |
| Net income | $652,352 |
| Add: |  |
| Interest expense, net | 48,236 |
| Income tax expense | 213,672 |
| Depreciation and amortization | 218,022 |
| EBITDA | 1,132,282 |
| Add: |  |
| Foreign currency transaction losses | 2,839 |
| Litigation settlements | 65,714 |
| Restructuring activities losses | 20,111 |
| Minus: |  |
| Net income attributable to noncontrolling interest | 799 |
| Adjusted EBITDA | $1,220,147 |

45

## Market risk

As filed, 11,324 characters.

### Market Risk-Sensitive Instruments and Positions

The risk inherent in our market risk-sensitive instruments and positions is primarily the potential loss arising from adverse changes in commodity prices, foreign currency exchange rates, interest rates and the credit quality of available-for-sale securities as discussed below. The sensitivity analyses presented do not consider the effects that such adverse changes may have on overall economic activity, nor do they consider additional actions our management may take to mitigate our exposure to such changes. Actual results may differ from those described below.

### Commodity Prices

We purchase certain commodities, primarily corn, soybean meal, soybean oil, and wheat, for use as ingredients in the feed we either sell commercially or consume in our live operations. As a result, our earnings are affected by changes in the price and availability of such feed ingredients. We attempt to minimize our exposure to the changing price and availability of such feed ingredients by using various techniques, including, but not limited to, (1) executing purchase agreements with suppliers for future physical delivery of feed ingredients at established prices and (2) purchasing or selling derivative financial instruments such as futures and options.

For this sensitivity analysis, market risk is estimated as a hypothetical 10% increase in the weighted-average cost of our primary feed ingredients as of the periods presented. The impact of this fluctuation, if realized, could be mitigated by related commodity hedging activity. However, fluctuations greater than 10% could occur.

*(In thousands)*

|  | Three Months Ended June 29, 2025 Amount | Impact of 10% Increase in Feed Ingredient Prices |
| --- | ---: | ---: |
| Feed ingredient purchases(a) | $819,287 | $81,929 |
| Feed ingredient inventory(b) | 162,967 | 16,297 |

(a) Based on our feed consumption, a 10% increase in the price of our feed ingredient purchases would have increased cost of sales for the three months ended June 29, 2025.

(b) A 10% increase in ending feed ingredient prices would have increased inventories as of June 29, 2025.

*(In thousands)*

|  | June 29, 2025 Amount | Impact of 10% Increase in Commodity Prices |
| --- | ---: | ---: |
| Net commodity derivative liabilities(a) | $(389) | $(39) |

(a) We purchase commodity derivative financial instruments, specifically exchange-traded futures and options, in an attempt to mitigate price risk related to our anticipated consumption of commodity inputs for the next 12 months. A 10% increase in corn, soybean meal, soybean oil and wheat prices would have resulted in a change in the fair value of our net commodity derivative position, including margin cash, as of June 29, 2025.

### Interest Rates

*Fixed-rate debt.* Market risk for fixed-rate debt is estimated as the potential decrease in fair value resulting from a hypothetical increase in interest rates of 10%. Using a discounted cash flow analysis, a hypothetical 10% increase in interest rates would have decreased the fair value of our fixed-rate debt by $92.2 million as of June 29, 2025.

### Foreign Currency

#### Mexico Foreign Investments

We are exposed to foreign exchange-related variability of investments and earnings from our Mexican subsidiaries. Foreign currency market risk is the possibility that our financial results or financial position could be better or worse than planned because of changes in foreign currency exchange rates. For this sensitivity analysis, market risk is estimated as a hypothetical 10% change in exchange rates used to convert Mexican peso to U.S. dollars, and the effect of this change on our Mexican foreign investments.

*Net Assets.* As of June 29, 2025, our Mexican subsidiaries that are denominated in Mexican peso had net assets of $811.0 million. A 10% weakening in Mexican peso against the U.S. dollar exchange rate would cause a decrease in the net assets of our Mexican subsidiaries by $73.7 million. A 10% strengthening in the Mexican peso against the U.S dollar exchange rate would cause an increase in the net assets of our Mexican subsidiaries of $90.1 million.

We are also exposed to the effect of potential currency exchange rate fluctuations to the extent that amounts are repatriated from Mexico to the U.S. The Mexican peso exchange rate can directly and indirectly impact our financial condition and results of operations.

#### Europe Foreign Investments

We are exposed to foreign exchange-related variability of investments and earnings from our Europe subsidiaries. Foreign currency market risk is the possibility that our financial results or financial position could be better or worse than planned because of changes in foreign currency exchange rates. For this sensitivity analysis, market risk is estimated as a hypothetical 10% change in exchange rates used to convert British pound and euro to U.S. dollars, and the effect of this change on our Europe foreign investments.

*Net Assets.* As of June 29, 2025, our Europe subsidiaries that are denominated in British pounds had net assets of $944.1 million. A 10% weakening in British pound against the U.S. dollar exchange rate would cause a decrease in the net assets of our Europe subsidiaries by $85.8 million. A 10% strengthening in the British pound against the U.S dollar exchange rate would cause an increase in the net assets of our Europe subsidiaries of $104.9 million.

*Cash flow hedging transactions.* We periodically enter into foreign currency forward contracts, which are designated and qualify as cash flow hedges, to hedge foreign currency risk on a portion of sales generated and purchases made by our Europe reportable segment. A 10% weakening or strengthening of the U.S. dollar against the British pound and U.S. dollar against the euro would result in immaterial changes in the fair values of these derivative instruments. No assurance can be given as to how future movements in currency rates could affect our future financial condition or results of operations.

### Quality of Investments

Certain retirement plans that we sponsor invest in a variety of financial instruments. We have analyzed our portfolios of investments, and to the best of our knowledge, none of our investments, including money market funds units, commercial paper and municipal securities, have been downgraded, and neither we nor any fund in which we participate hold significant amounts of structured investment vehicles, auction rate securities, collateralized debt obligations, credit derivatives, hedge funds investments, fund of funds investments or perpetual preferred securities. Certain postretirement funds in which we participate hold significant amounts of mortgage-backed securities. However, none of the mortgages collateralizing these securities are considered subprime.

### Impact of Inflation

The U.S., Mexico, and most of Europe continue to experience inflation at above-historical levels, though to a lesser degree than in the prior year. None of the locations in which we operate are experiencing hyperinflation. We have responded to these inflationary challenges by continuing negotiations with customers to recoup the extraordinary costs we have experienced. We also continue to focus on operational initiatives that aim to deliver labor efficiencies, better agricultural performance and improved yields.

### Forward Looking Statements

Certain written and oral statements made by our Company and subsidiaries of our Company may constitute “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. This includes statements made herein, in our other filings with the SEC, in press releases, and in certain other oral and written presentations. Statements of our intentions, beliefs, expectations or predictions for the future, denoted by the words “anticipate,” “believe,” “estimate,” “expect,” “project,” “plan,” “imply,” “intend,” “should,” “foresee” and similar expressions, are forward-looking statements that reflect our current views about future events and are subject to risks, uncertainties and assumptions. Such risks, uncertainties and assumptions include the following:

- Matters affecting the chicken and pork industries generally, including fluctuations in the commodity prices of feed ingredients, pigs and chicken;
- Our ability to maintain contracts that are critical to our operations;
- Our ability to retain management and other key individuals;
- Outbreaks of avian influenza or other diseases, either in our own flock or elsewhere, affecting our ability to conduct our operations and/or demand for our poultry products;
- Contamination of our products, which has previously and can in the future lead to product liability claims (for which insurance coverage is expensive, limited and potentially inadequate) and product recalls;
- Media campaigns related to food production, regulatory and customer focus on sustainability, and recent increased focus and attention by the U.S. government on market dynamics;
- Changes in laws or regulations affecting our operations or the application or enforcement thereof, including those relating to climate change, immigration and anti-corruption;
- Competitive factors, inflation and pricing pressures, customer consolidation or the loss of one or more of our largest customers;
- Inability to consummate, or effectively integrate, any acquisition or to realize the associated anticipated cost savings and operating synergies;
- Currency exchange rate fluctuations, developments relating to tariffs and other international trade actions, trade barriers, exchange controls, expropriation and other risks associated with foreign segments;
- Restrictions imposed by, and as a result of, Pilgrim’s leverage;
- Disruptions in international markets and distribution channels for various reasons, including, but not limited to, the ongoing Russia-Ukraine war or wars in the Middle East;
- The impact of cyber-attacks, natural disasters, power losses, unauthorized access, telecommunication failures, and other problems on our information systems;
- Our ability to maintain favorable labor relations with our employees and our compliance with labor laws;
- Extreme weather or natural disasters;
- The impact of uncertainties in litigation; and
- Other risks described herein and under “Part I—Item 1A—Risk Factors” in our 2024 Annual Report.

Actual results could differ materially from those projected in these forward-looking statements as a result of these factors, among others, many of which are beyond our control.

The Company’s forward-looking statements speak only as of the date of this report or as of the date they are made. In making these statements, we are not undertaking, and specifically decline to undertake, any obligation to address or update each or any factor in future filings or communications regarding our business or results, and we are not undertaking to address how any of these factors may have caused changes to information contained in previous filings or communications. Although we have attempted to list comprehensively these important cautionary risk factors, we must caution investors and others that other factors may in the future prove to be important and affect our business or results of operations.

## Controls and procedures

As filed, 2,782 characters.

### Disclosure Controls and Procedures

Under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), “disclosure controls and procedures” means controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

As of June 29, 2025, the Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation and subject to the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of June 29, 2025, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information we are required to disclose in our reports filed with the SEC is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

### Changes in Internal Control over Financial Reporting

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, identified no change in the Company’s internal control over financial reporting that occurred during the three months ended June 29, 2025 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

During 2024, the Company completed the first phase of a multi-year implementation of an enterprise resource planning (“ERP”) system. The implementation did not materially affect our internal control over financial reporting during the three months ended June 29, 2025. The second phase of the implementation was completed on April 21, 2025 and we do not expect any material effects to our internal control over financial reporting throughout the remainder of the implementation period.

## Risk factors

As filed, 522 characters.

For a discussion of our potential risks and uncertainties, please see “Part I—Item 1A—Risk Factors” and “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report and “Part I—Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein, in each case as updated by the Company’s periodic filings with the SEC. There have been no material changes to the risk factors previously disclosed in our 2024 Annual Report.

Filed Jul 31, 2025.
Source: SEC EDGAR, the filing index for accession 0000802481-25-000110. Last ingested by Listed: Oct 29, 2026, 06:16 ET. No prices; not investment advice.