GREELEY, COLO. — Weather disruptions and a challenging environment in commodity chicken held back sales and earnings at Pilgrim’s Pride Corp. in the fourth quarter and full year.
Net income in the year ended Dec. 30, 2018, totaled $247,945,000, equal to $1 per share on the common stock, down 64% from $694,579,000, or $2.79 per share, in fiscal 2017. Net sales for the year climbed narrowly to $10,937,784,000 from $10,767,863,000.
Meanwhile, Pilgrim’s Pride sustained a loss of $7,324,000 in the fourth quarter ended Dec. 30, which compared with net income of $134,337,000 in the same period a year ago. Sales also were lower, falling to $2,656,789,000 from $2,742,352,000 in the same period a year ago.
“In the U.S., we experienced a very difficult environment in commodity chicken, partially offset by prepared foods, which has been accelerating in its improvement,” William W. Lovette, president and chief executive officer, said during a Feb. 14 conference call with analysts. “In Europe, we tracked to expectations in extracting synergies despite feed cost pressures in Europe during the second half. Mexico had stronger-than-seasonal performance in the first half, a weak Q3, and then a recovery as we exited the year.
“While we are proud of our progress we’ve made in terms of our relative operating performance to the competition over the last years and all reasons we’re in, we’re not satisfied and are continually identifying opportunities against our zero-based approach and refining our portfolio strategy to better adapt to specific market dynamics. We continue to believe this approach will give us higher and more consistent results for the mid-to-long run and minimize the full peaks and troughs of the volatile commodity sectors. While we face more challenging supply/demand balance in the U.S. commodity market, we continue to leverage our key customer approach to drive growth beyond just the underlying market conditions.”
Mr. Lovette said Pilgrim’s Pride is applying a similar strategy to its European operations and expects to start seeing improvements in that region similar to what it’s experiencing in other regions.
“Our team across the different regions remains motivated in capturing more growth opportunities and product differentiation, both organically as well as through acquisitions to generate greater value, while contributing to the evolution of our portfolio and supporting our vision to become the best and most respected company in our industry,” he said.
Addressing the loss and lower sales during the fourth quarter, Mr. Lovette said Pilgrim’s Pride suffered from disruptions at some of its U.S. facilities due to hurricanes. The hurricanes not only had an impact on facilities and results, but also resulted in larger-than-ideal commodity-size birds to sell into a market that was even weaker than seasonal, he said.
“Most important, during this period, the inefficiencies also limited our ability from fully capturing our operational improvement targets,” he added.