Sales in the 13 weeks to 27 September 2015 declined 7.6% to $2.11 billion, compared to the same period in 2014. Profits nearly halved during the same period, down 86.7% to $137.1m in the third quarter of 2015, compared to $256m this time last year.
“The continued challenges in the export markets, the strong dollar and the lowest chicken cutout in the past five years during Q3 have had an impact on the commodity segments of our business, and on our US export and Mexico sales,” said Bill Lovette, Pilgrim’s chief executive.
“Additionally, non-routine costs at two of our facilities further weighed on our results. Despite these challenges, our team has managed to produce solid margins compared to periods when prices were at similar levels.”
The company, like many other US-based poultry exporters, has been affected by the avian influenza (AI) crisis, which resulted in 50 million birds being culled in 12 states throughout 2015, and resulting in the closure of many international markets for US poultry.
“Although we expect export markets to gradually reopen soon, depending on the domestic AI situation, we choose not to stand still and be complacent,” said Lovette. “Instead, we continue to seek alternative and creative ways to reduce our dependencies on commodity products to produce more consistent margins by sharpening our focus on high-growth markets. We also remain on track to extract $200 million in operational improvements for the year.”
Pilgrim’s employs approximately 38,700 people and operates chicken processing plants and prepared-foods facilities in 12 American states, Puerto Rico and Mexico. The company’s primary distribution is through retailers and foodservice distributors.