Pilgrim's Pride Corporation PPC is benefiting from a flexible and market-sensitive pricing strategy, which adapts to market trend fluctuations, specific product demands and overarching economic conditions. The company refines its prices in accordance with seasonal variations, shifts in supply and demand, and cost factors, which ensures profitability and competitive standing in the market.
In the third quarter of 2023, PPC sustained stable sales volumes by implementing price adjustments and standard promotional tactics. This approach enabled growth in volumes across its commodity and value-added frozen product lines, along with its dairy prepared section.
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Customer-Centric Strategy & Growth Initiatives
Pilgrim's Pride's customer-centric approach has resulted in a robust lineup of promotions with top retailers and food service providers. In the third quarter of 2023, the foodservice sector saw increased chicken sales, driven by more operators buying and improved sales for existing operators. Both retail and commercial distribution sectors experienced balanced volume growth between different cuts of chicken.
While non-commercial distribution volumes increased, prices were lower than those reported in 2022. Wholesale prices for commodity chicken, particularly breast meat and tenders, improved in August and September, contributing to overall pricing enhancements.
In the same quarter, the company's case-ready team demonstrated resilience and growth by boosting volumes, nurturing customer relationships, expanding distribution, intensifying promotions and optimizing product offerings. The Small Bird segment flourished with steady demand from Quick Service Restaurants (QSRs) in the third quarter. Furthermore, the company's commitment to diversifying into prepared foods gained momentum, positioning it as a versatile leader in the food industry to meet evolving market demands.
Operational Excellence Bodes Well
Pilgrim's Pride demonstrated operational excellence, which positively impacted margins across all regions in the third quarter of 2023. The efficiency enhancements in Big Bird operations, coupled with diversification efforts, contributed to this success. This operational strength underpins the company's ability to maintain high performance standards, while expanding its market footprint.
The company's performances in the U.K. and Europe were marked by the launch of products and securing long-term supply arrangements. These initiatives have strengthened Pilgrim’s Pride’s global presence and laid a foundation for profitable growth, highlighting its international business insight.
In Mexico, the company achieved strong performance due to improvements in live operations, favorable feed inputs and balanced supply-demand dynamics. This success in Mexico exemplifies its ability to adapt to different market conditions and optimize operations in varying geographic locations. The company’s Mexico operations generated net sales of $559.7 million, up from $429 million in the prior-year quarter.
The Zacks Rank #3 (Hold) company’s shares have gained 13.7% in the past six months against the industry’s 6.1% decline.
Stocks to Consider
We have highlighted three better-ranked stocks, namely e.l.f. Beauty, Inc. ELF, Freshpet Inc. FRPT and Sysco Corporation SYY.
e.l.f. Beauty operates as a cosmetic company. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for e.l.f. Beauty’s current fiscal-year sales and earnings suggests growth of 57.9% and 62.7%, respectively, from the fiscal 2023 reported numbers. ELF has a trailing four-quarter earnings surprise of 90.1%, on average.
Freshpet is a pet food company. The company manufactures and markets natural fresh foods, refrigerated meals, and treats for dogs and cats. The company currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Freshpet’s current financial-year sales suggests growth of 26.8% from the 2022 reported figure. FRPT delivered an earnings surprise of 25% in the third quarter of 2023.
Sysco, through its subsidiaries, markets and distributes a range of food and related products. It currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for SYY’s current fiscal-year sales and earnings suggests growth of 4.1% and 8%, respectively, from the fiscal 2023 reported numbers.
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Sysco Corporation (SYY) : Free Stock Analysis Report
Pilgrim's Pride Corporation (PPC) : Free Stock Analysis Report
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