Pilgrims Pride Corp: Form 10-Q for the period ended Mar 29, 2026

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 $101.4 million, or $0.43 per diluted common share, and income before tax totaling $131.8 million, for the three months ended March 29, 2026. These operating results included net sales of $4.5 billion, gross profit of $345.5 million and $140.8 million of cash provided by operating activities. We generated a consolidated operating margin of 3.6%. For the three months ended March 29, 2026, we generated EBITDA and Adjusted EBITDA of $281.3 million and $308.1 million, 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 decreased from the fourth quarter of 2025 through January and held steady in February, then sharply rose in March driven by increased energy prices from geopolitical disruptions. The increased energy prices drove a slight increase at the end of the first quarter of 2026 in U.S. food inflation. U.K. inflation eased slightly from the fourth quarter of 2025, then remained relatively stable throughout the first quarter of 2026. The E.U. region also saw a slight decrease in the inflation rate in January 2026, followed by a mild increase in February and sharper increase in March 2026, driven by increased energy prices. In Mexico, inflation rose during the first quarter of 2026 primarily driven by increased food and services prices, with additional increases from higher energy prices and the impact of tariffs. The peso strengthened against the U.S. dollar in January and February of 2026, followed by a sharp weakening in March 2026. Future trends will be impacted by economic uncertainties in Mexico and with their primary trading partners, such as the U.S. 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.

The ongoing armed conflict involving Iran and the Gulf has led, and may continue to lead, to, among other things, increased volatility and higher prices for commodities, such as energy products and freight on input material costs, increased inflation in various countries, disruptions to global trade and supply chains, including key energy transit routes. Actual or threatened disruptions to maritime shipping lanes and other escalating security tensions have increased various costs. While the supply constraints related to the conflict did not have a material impact on our costs during the current reporting period, prolonged or expanded hostilities could have a more pronounced effect in future periods. Additionally, 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.

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 5% 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 ongoing 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:

(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 during the three months ended March 29, 2026, trended below prior year levels and the historical five-year average. Boneless breast prices rebounded from levels at the beginning of 2026 and trended upward overall, with pricing relatively stable in February before strengthening further in March, albeit below prior year. Supply remained elevated during the first quarter of 2026, reflecting higher egg sets and chick placements late in the prior year that translated into increased headcounts in the first quarter. Average liveweights were also higher in the first quarter of 2026, further contributing to higher production levels. Per the March 2026 U.S. Department of Agriculture (“USDA”) report on poultry slaughter, estimated industry ready-to-cook production during the first quarter of 2026 increased by 3.4% compared to prior year levels.

During the first quarter of 2026, the U.S. chicken market demand fluctuated. Chicken remained a strong value option relative to other proteins amid ongoing pressure on consumer finances. Consumption expenditures outpaced real disposable income and inflation accelerated, driven in part by higher energy and food costs. Volumes grew across both retail and foodservice channels. However, retail growth slowed to 1.3% in the first quarter of 2026, down from 2.8% in the first quarter of 2025, with demand higher in January and weaker in February and March following winter storm-related consumer stock-up activity. In foodservice, chicken offerings continued to expand as operators leaned into value positioning and responded to elevated beef prices, including non-chicken-focused quick service restaurants expanding chicken offerings. However, the sector remained constrained by soft traffic levels, limiting overall upside despite increased menu presence.

Export volume shipments declined about 1.1% from prior year levels as global geopolitical conflicts disrupted trade flows. Export pricing was also slightly lower than prior year levels. U.S. chicken cold storage inventories ended the first quarter of 2026 down 3.4% below the historical five-year average. Breast meat inventories were about 7.5% below prior year levels, while wing and dark meat inventories remained low. The low dark meat cold storage levels reflect increased demand and favorable pricing.

While demand remained strong, supply exceeded previous estimates during the first quarter of 2026 as the industry continued to deliver broad-based productivity gains, including improved hatchability, livability, headcounts, and liveweights, alongside record high egg sets and placements. In response to anticipated strong demand and elevated beef prices, production increased, which limited price gains during the quarter.

The reduction in first quarter of 2026 U.K. poultry volumes reflect normalization in average liveweights from the exceptionally high levels seen in late 2025 and January 2026, rather than any contraction in supply. U.K. poultry headkill during the first quarter was broadly in line with prior-year levels. Egg placements increased year-over-year through the first quarter, supporting continued strength in the domestic egg market. U.K. chicken prices remained stable versus the fourth quarter of 2025, but were modestly lower than the first quarter of 2025.

Commodity prices for chicken in Mexico increased slightly during the first quarter of 2026, though were below prior year average prices. Production was increased in the first quarter to offset expected mortality levels. Overall bird health was better than expected, due to private investments in biosecurity and animal health protocols throughout 2025, resulting in oversupply leading to reduced prices in the first quarter of 2026. Global corn and soybean meal prices were lower in the first quarter of 2026 compared to prior year levels, which helped support higher production levels for poultry in Mexico.

U.K. pork prices declined during the first quarter of 2026, reflecting continued supply pressure, while U.K. pig meat production increased by approximately 5.3% year-over-year, supported by higher slaughter numbers and sustained carcass weights, according to the U.K. Agriculture and Horticulture Development Board. In contrast, E.U. pork prices remained under pressure during the quarter despite longer-term supply contraction, with any price stabilization emerging only toward the end of the period.

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 meat protein supply.

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 16. Reportable Segments” of our Condensed Consolidated Financial Statements included in this quarterly report.

Results of Operations

Three Months Ended March 29, 2026 Compared to the Three Months Ended March 30, 2025

Net sales. Net sales generated in the three months ended March 29, 2026 increased $69.6 million, or 1.6%, from net sales generated in the three months ended March 30, 2025. The following table provides net sales information:

(In thousands, except percent data)

Factors impacting net sales year-over-year changes by reportable segment are as follows:

• U.S. net sales decreased $107.8 million, or 3.9%, driven by the following factors:
• Decrease in sales price per pound of $128.6 million, or 4.7%
• This decrease was driven primarily by unfavorable market pricing conditions with current year market pricing below historical averages
• Partially offset by an increase in sales volume of $20.8 million, or 0.8%
• Europe net sales increased $120.2 million, or 9.8%, driven by the following factors:
• Favorable impact of foreign currency translation of $88.6 million, or 7.2%
• This impact was driven by a strengthening of the British pound against the U.S. dollar
• Increase in sales price per pound of $28.1 million, or 2.3%
• This increase was driven by the pass through of higher input costs, such as labor and utilities
• Increase in sales volume of $3.5 million, or 0.3%
• Mexico net sales increased $57.2 million, or 11.7% driven by the following factors:
• Favorable impact of foreign currency translation of $75.5 million, or 15.5%
• This impact was driven by a strengthening of the Mexican peso against the U.S. dollar
• Increase in sales volume of $58.8 million, or 12.0%
• Partially offset by a decrease in sales price per pound of $77.1 million, or 15.8%
• This decrease was driven by a decrease in commodity chicken pricing

Gross profit and cost of sales. Gross profit decreased by $209.4 million from $554.9 million generated in the three months ended March 30, 2025 to $345.5 million generated in the three months ended March 29, 2026. The following tables provide information regarding gross profit and cost of sales information:

(In thousands, except percent data)

(In thousands, except percent data)

(In thousands, except percent data)

Factors impacting cost of sales year-over-year changes by reportable segment are as follows:

• U.S. cost of sales increased $83.3 million, or 3.5%, driven by the following factors:
• Increase in cost per pound sold of $65.4 million, or 2.7%
• This increase was driven primarily by an increase in live operations costs, grower pay, depreciation, utilities, and other operating costs
• Increase in sales volume of $17.9 million, or 0.8%
• This increase was driven by consumer demand
• Europe cost of sales increased $116.2 million, or 10.4%, driven by the following factors:
• Unfavorable impact of foreign currency translation of $78.4 million, or 7.0%
• This impact was driven by a strengthening of the British pound against the U.S. dollar
• Increase in cost per pound sold of $34.7 million, or 3.1%
• This increase was driven by higher input costs, such as labor and utilities
• Increase in sales volume of $3.1 million, or 0.3%
• Mexico cost of sales increased $79.6 million, or 18.2% driven by the following factors:
• Unfavorable impact of foreign currency translation of $71.6 million, or 16.4%
• This impact was driven by a strengthening of the Mexican peso against the U.S. dollar
• Increase in sales volume of $52.6 million, or 12.0%
• This increase was driven by market requirements in mix
• Partially offset by a decrease in cost per pound sold of $44.6 million, or 10.2%
• This decrease was driven by a decrease in commodity chicken pricing

Operating income and SG&A expense. Operating income decreased by $241.9 million, or 59.8%, from $404.5 million generated in the three months ended March 30, 2025 to $162.6 million generated in the three months ended March 29, 2026. The following tables provide information regarding operating income and selling, general and administrative (“SG&A”) expense:

(In thousands, except percent data)

(In thousands, except percent data)

Factors impacting SG&A year-over-year changes by reportable segment are as follows:

• U.S. SG&A increased $40.8 million, or 59.3%, driven by an increase in legal settlement expense, legal defense costs, and marketing costs
• Europe SG&A increased $2.2 million, or 4.4%, driven by the unfavorable impact foreign currency translation, partially offset by decreases in overall cost structure
• Mexico SG&A increased $3.3 million, or 23.3%, driven by the unfavorable impact of foreign currency translation

(In thousands, except percent data)

Factors impacting restructuring activities charges are as follows:

• Europe restructuring activities charges of $2.8 million for the three months ended March 29, 2026 were incurred primarily as a result of severance related to back office consolidation.

(In thousands, except percent data)

Factors impacting the year-over-year change in net interest expense are as follows:

• A decrease in interest income earned on excess cash due to lower average cash balances

(In thousands, except percent data)

Factors impacting the year-over-year change in income tax expense are as follows:

• A decrease in profit before income taxes

Liquidity and Capital Resources

The following table presents our available sources of liquidity as of March 29, 2026:

(In millions)

(a) Availability under the U.S. Credit Facility may also reduced by outstanding standby letters of credit.

On March 30, 2026, the Company commenced a tender offer pursuant to which it offered to acquire up to $250.0 million aggregate principal amount of its 6.250% Senior Notes due 2033. On April 14, 2026, the early settlement date, the Company exercised the purchase of $250.0 million aggregate principal amount at a price of $1,056.90 per $1,000.00 principal amount and a total cost of $264.2 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.

Historical Flow of Funds

(In millions)

Net Noncash Expenses

Items necessary to reconcile from net income to cash flow provided by operating activities included net noncash expenses of $123.5 million for the three months ended March 29, 2026. Net noncash expense items included depreciation and amortization of $118.5 million, stock-based compensation costs of $6.1 million, deferred income tax benefit of $4.9 million, losses on property disposals of $2.0 million, loan cost amortization of $1.2 million, and accretion of discounts related to Senior Notes of $0.6 million.

Items necessary to reconcile from net income to cash flow provided by operating activities included net noncash expenses of $103.8 million for the three months ended March 30, 2025. Net noncash expense items included depreciation and amortization of $104.5 million, deferred income tax benefit of $11.0 million, stock-based compensation costs of $7.0 million, loan cost amortization of $1.2 million, losses on property disposals of $0.9 million, asset impairment of $0.6 million, accretion of discounts related to Senior Notes of $0.6 million, and gain on early extinguishment of debt recognized as component of interest expense of $0.1 million. Other net noncash items were immaterial.

Changes in Operating Assets and Liabilities

The change in trade accounts and other receivables represented a $74.3 million source of cash related to operating activities for the three months ended March 29, 2026. This change primarily resulted from a decrease in trade accounts receivable. The change in trade accounts and other receivables represented a $91.5 million use of cash related to operating activities for the three months ended March 30, 2025. This change resulted from an increase in trade accounts receivable primarily due to an increase in sales from more favorable market pricing and a decrease in the use of our discounted accounts receivable program.

The change in inventories represented a $16.0 million use of cash related to operating activities for the three months ended March 29, 2026. This change resulted primarily from increased live inventories and impact of foreign currency translation. The change in inventories represented a $64.2 million use of cash related to operating activities for the three months ended March 30, 2025. This change resulted primarily from increased input costs and an increase in inventories after higher seasonal sales in the fourth quarter of 2024.

The change in prepaid expenses and other current assets represented a $10.2 million source of cash related to operating activities for the three months ended March 29, 2026. This change resulted primarily from a decrease in prepaid indirect taxes in our Mexico and Europe reportable segments, partially offset by an increase in derivative assets. The change in prepaid expenses and other current assets represented a $44.0 million use of cash related to operating activities for the three months ended March 30, 2025. 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 $157.1 million use of cash related to operating activities for the three months ended March 29, 2026. This change resulted primarily from the payment of incentive compensation accrued for in 2025 and a decrease in the average days payable outstanding. The change in accounts payable, accrued expenses and other current liabilities represented a $118.7 million use of cash related to operating activities for the three months ended March 30, 2025. This change resulted primarily from the payment of incentive compensation accrued for in 2024.

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 $18.0 million and $51.9 million source of cash for the three months ended March 29, 2026 and March 30, 2025, respectively.

(In millions)

Capital expenditures were incurred primarily for growth projects, to improve operational efficiencies, and to reduce costs for the three months ended March 29, 2026. Capital expenditures were incurred primarily to improve operational efficiencies, system enhancement projects, and to reduce costs for the three months ended March 30, 2025.

Purchase of acquired business during the three months ended March 29, 2026, is from the equity purchase of Hermitage AI Ltd. from Hermitage Group. For more details, refer to "Note 6. Goodwill and Intangible Assets."

(In millions)

Payments on revolving line of credit, long-term borrowings and finance lease obligations during the three months ended March 29, 2026, are related to finance lease payments.

Payments on revolving line of credit, long-term borrowings and finance lease obligations during the three months ended March 30, 2025, are primarily related to open market repurchases of outstanding senior notes.

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 11. Debt.”

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

“EBITDA” is defined as the sum of net income 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) costs related to litigation settlements, (3) restructuring activities losses, 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)

34

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)

(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 March 29, 2026.

(b) A 10% increase in ending feed ingredient prices would have increased inventories as of March 29, 2026.

(In thousands)

(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 March 29, 2026.

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 $85.8 million as of March 29, 2026.

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 March 29, 2026, our Mexican subsidiaries that are denominated in Mexican peso had net assets of $708.7 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 $64.4 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 $78.7 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 March 29, 2026, our Europe subsidiaries that are denominated in British pounds had net assets of $1.1 billion. 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 $100.4 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 $122.7 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, energy supply routes, and other 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 2025 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.

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 March 29, 2026, 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 March 29, 2026, 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 March 29, 2026 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 March 29, 2026. The third and final phase of the implementation was completed on April 20, 2026 and we do not expect any material effects to our internal control over financial reporting throughout the remainder of the reporting period.

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 2025 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 2025 Annual Report.