Chicken Glut Hammers Pilgrim's Pride as Supply Surges 4.5%, Prices Plunge 34%
PPC is trading near its 52-week low of $26.5 (12% above the low) on light trading volume (0.3× avg).
Summary
Pilgrim's Pride is caught in an industry-wide chicken oversupply that's crushing prices and profits. CEO Fabio Sandri said on today's earnings call that a 4.5% jump in Q2 supply swamped demand, even as consumers and restaurants buy more chicken. Wholesale breast prices are down 34% year-over-year, and the company's U.S. segment swung to an operating loss. This follows yesterday's Q2 report showing a 96% profit collapse and a big sales miss. The glut stems from producers ramping up too aggressively on beef-price hopes and solving a chick-hatching bottleneck. With no quick fix for excess supply, margins will stay under pressure until production cuts materialize.
At the time of this announcement, PPC was trading at $29.79 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $7.1B. The 52-week trading range was $26.50 to $50.56. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Dow Jones Newswires.