How Did Pilgrim’s Pride Perform in 2Q16?

Price movement

Pilgrim’s Pride (PPC) has a market cap of $6.2 billion. It fell by 3.4% to close at $24.32 per share on July 27, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -3.2%, 0.0%, and 23.0%, respectively, on the same day. PPC is trading 3.2% below its 20-day moving average, 2.6% below its 50-day moving average, and 13.0% above its 200-day moving average.

How Did Pilgrim’s Pride Perform in 2Q16?

Related ETF and peers

The AdvisorShares TrimTabs Float Shrink ETF (TTFS) invests 1.4% of its holdings in Pilgrim’s Pride. The ETF aims to outperform broad US equities. The actively managed, equal-weighted fund selects stocks based on trends in outstanding shares, firm leverage, and free cash flow. The YTD price movement of TTFS was 6.8% on July 27.

The market caps of Pilgrim’s Pride competitors are as follows:

  • Tyson Foods (TSN) — $26.3 billion
  • Hormel Foods (HRL) — $19.2 billion
  • Industrias Bachoco (IBA) — $2.6 billion

Performance of Pilgrim’s Pride in fiscal 2Q16

Pilgrim’s Pride reported fiscal 2Q16 net sales of $2.03 billion, a fall of 1.2% from the net sales of $2.05 billion in fiscal 2Q15. The company’s gross profit margin and operating income fell by 32.9% and 37.5%, respectively, between fiscals 2Q15 and 2Q16. It reported foreign currency translation of $4.7 million in fiscal 2Q16, compared with -$2.1 million in fiscal 2Q15.

Its net income and EPS (earnings per share) fell to $152.9 million and $0.60, respectively, in fiscal 2Q16, compared with $241.5 million and $0.93, respectively, in fiscal 2Q15. It reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $282.7 million in fiscal 2Q16, a fall of 33.6% from fiscal 2Q15.

PPC’s cash and cash equivalents fell by 90.7%, and its inventories rose by 3.9%between fiscals 4Q15 and 2Q16. Its current ratio fell to 1.7x and its debt-to-equity ratio rose to 2.7x in fiscal 2Q16, compared with 2.1x and 1.6x, respectively, in fiscal 4Q15. In the next part of this series, we’ll take a look at Mondelēz International.