Good morning, and welcome to the Fourth Quarter and Fiscal Year 2025 Pilgrim's Pride Earnings Conference Call and Webcast. [Operator Instructions] At the company's request, this call is being recorded. Please note that the slides referenced during today's call are available for download from the Investors section of the company's website at www.pilgrims.com. After today's presentation, there will be an opportunity to ask questions. I would now like to turn the conference call over to Andrew Rojeski, Head of Strategy, Investor Relations and Sustainability for Pilgrim's Pride.

Thank you, Andy. Good morning, everyone, and thank you for joining us today. So for the fiscal year 2025, we established new financial milestones as net revenues reached $18.5 billion and adjusted EBITDA rose to $2.3 billion. Our adjusted EBITDA margin was 12.3%. In the U.S., consistent execution of our strategies, along with strong chicken demand bolstered our demand. Demand for our key customers grew significantly over the category average for the year. Our brand building accelerated as the combined Retail sales of Just BARE across Fresh and Prepared exceeded $1 billion, further diversifying our portfolio and resonating with consumers. Operational excellence efforts improved efficiencies in processing and live operations in Big Bird, mitigating commodity cutout volatility throughout the year. Given these efforts, the U.S. grew both in top line and bottom line. Europe completed several projects to enhance the efficiency of its manufacturing footprint, consolidated back-office support and optimized mix and innovation. Key customer partnerships strengthened as sales and volume both increased compared to last year. Our portfolio of key brands continue to grow, further diversifying our portfolio. Based on these efforts, margins and overall adjusted EBITDA continue to improve. Mexico grew sales through increased sales volumes of branded offerings across Fresh and Prepared and growth with key customers despite commodity pricing volatility. Equally important, we initiated a series of investments in both Fresh and Prepared to drive profitable growth while reducing the volatility of our business. For the fourth quarter of 2025, we reported net revenues of $4.5 billion. We have adjusted EBITDA of $450 million, and our adjusted EBITDA margin was 9.2%. Our Q4 results reflect the robust nature of our strategies to drive strong margins during changing market conditions. In the U.S., Fresh increased market share through continued focus on quality, service and innovation. Our fresh…

Thank you, Fabio. Good morning, everyone. For the fourth quarter of 2025, net revenues were $4.52 billion versus $4.37 billion a year ago with adjusted EBITDA of $415.1 million and a margin of 9.2% compared to $525.7 million and a 12% margin in Q4 last year. For fiscal year 2025, net revenues were $18.5 billion versus $17.9 billion in fiscal 2024, growth of 3.5%, while increasing adjusted EBITDA by 2.5% from $2.21 billion in fiscal 2024 to $2.27 billion this year, after back years with adjusted EBITDA margins greater than 12%. Adjusted EBITDA in the U.S. for Q4 came in at $274.2 million with adjusted EBITDA margin at 10.6%. Our U.S. business continued its momentum in the quarter in Fresh Retail and with QSR key customers, driving above category growth in these categories. Big Bird achieved further operational improvements. However, we face year-over-year commodity market pricing headwinds negatively impacting profitability. Our Prepared Foods business continued its momentum of branded product sales growth with both Retail and foodservice customers, driving year-over-year profitability improvement in the quarter. For the fiscal year, U.S. net revenues were $11 billion versus $10.6 billion in fiscal 2024 with adjusted EBITDA of $1.63 billion and a 14.8% margin compared to $1.56 billion and a 14.7% margin last year. The U.S. business maintained its margin profile through increasing sales volumes and delivering operational efficiency. In Europe, adjusted EBITDA in Q4 was $131.4 million versus $117.1 million in 2024, a 12.2% increase. For the full year, Europe's adjusted EBITDA improved 11.4% to $453.1 million in 2025 from $406.9 million in 2024. Europe drove improved profitability with growth in poultry sales and due the impact of a series of operating efficiencies implemented over the last few years. Our European business has streamlined organizational structure and focus on innovative offerings has…

[Operator Instructions] And your first question today comes from Ben Theurer with Barclays.

Fabio, Matt, 2 quick ones. So number one, maybe just on the current growing conditions, and you laid it out in your prepared remarks what kind of like the cutout levels and pricing is compared to historic levels and particularly versus the last 2 years. So as we look into the first quarter and with hatchability coming down, how much of that would you say is like related to just the genetic issue coming back up? Or is it more weather related, just given the cold weather we had over the last couple of weeks, even in areas where chickens are grown. So just about the market dynamics right now and how we should think about the supply side for 1Q?

Yes. Thank you, Ben. Yes, when we look at the supply, and we always start with the breeding flock. And when you see the size of the breeding flock, we are with a total number that is down 1.9% year-over-year. So we have less breeders. But I think in terms of age, they are younger, which will generate more eggs and help on the hatchability. But nonetheless, it's a smaller number. Given that input and some other factors like the weather and the seasonality, I think USDA is projecting the growth of supply in chicken for the Q1 at only 1.2%. In total for the year, that will be only 1%. I think the hatchability issue is part of this breed that we have. And there's a lot of questions about breed. And I think the important thing for us is that we look at the overall profitability of the bird, not only 1 trade or another. So when you look at the profitability of the bird, we look at, of course, hatchability but we look at conversions and we look at yield. And as of today, Big Bird, despite having hatchability that's below the 5-year or below previous years, it still have the better yield and the better performance in terms of feed conversion in other birds. So I don't expect any significant changes in the breed. Of course, there is always new breeds coming online but it takes time for the new bridge to roll out.

Okay. Perfect. And then my second question, just around like within capital allocation, obviously CapEx. You've mentioned the $900 million to $950 million. That's a good $200 million increase versus last year and kind of like brings us to $0.5 billion investment for the year versus sustaining. So as you kind of like laid the land in terms of these projects, the Big Bird conversion, things in Mexico, Prepared Foods. What else is in the pipeline? I know you've made some announcements in Mexico a couple of weeks ago. So just help us understand framing that CapEx for now? And also how much of that CapEx kind of like carries then potentially into 2027 as you roll out more projects just to think about like the path of CapEx beyond 2026?

Great point. And I think we're always looking for the trends in the market and how can we support our key customers. And we can improve our portfolio, right? So in that regard, we're always looking to grow our Prepared Foods. And I think we mentioned how outstanding we have results, especially because of the Just BARE. So we are building that new facility in Georgia. And that will take investments that started last year. It's going to take 2026 and we'll roll out to 2027. In Mexico, as we mentioned, we are also diversifying our geography, and we are growing in regions where we are not in. Typically, in Mexico, we are in the Northern region and in the Central region, we were not present in the South region and in the Peninsula and are increasing our investments in those 2 regions. And that is smaller and it's every year as we want to grow steady in those regions. So we will have some investments in 2027. On the conversion to increase our support to a key customer, it's going to be all done during this year and the changes on the -- so internal supply of meat from our Big Bird to our Prepared Foods will be all done this year. I think the only thing that we can have for 2027, as we mentioned, we are seeing this trend of change of bone in Small Bird to a more boneless. I think we all discussed about the sandwich wars many quarters ago, we've been discussing that, and we're seeing that trend, and we may convert 1 Small Bird plant to a more deboning plant rather than a bone-in plant.

And your next question comes from Peter Galbo with Bank of America.

Fabio and Matt, maybe just to pick up on Ben's question on the, I guess, the rally we've seen to start January in commodity prices. Just trying to think about -- and I know it's a hard crystal ball but like the sustainability of that, given some of it is the tailwinds to the category and other protein -- competing proteins being lower, versus kind of the storm impact and maybe that's having an upward pressure on prices. Just how do you think about maybe the sustainability of some of the price move we've seen into what is going to be historically and even seasonally stronger period?

Yes. Thank you, Peter. We are seeing several trends supporting the demand for chicken. Starting with overall, we're seeing these macronomic indicators that showing that the consumers have been watching their spending closely, and have growing concerns about the inflation. So as the inflation in food away from home is outpacing the food at home, consumers are looking for ways to save and they are moving to Retail. So when did we go to the Retail, we see that they have more frequent trips and lower baskets and chicken demand has increased overall because, as we mentioned in the prepared remarks, compared to last quarter prices in Retail for bone-less breast has gone down 1%, while we see all the other competing protein prices going up. I think that created -- as we mentioned, the highest spread on record. If you look at the prices of chicken compared to the prices of beef, we will have a spread of close to $2 per pound and that is increasing the demand for chicken in the Retail. When you go to the foodservice, despite this lower food traffic, I think the foodservice operators are trying to attract consumers with promotional activity. I just mentioned the sandwich wars. And we're seeing the many penetration of chicken going up in the foodservice. So we saw also a growth in the foodservice in the range of 2% to 3%. So I don't think that we're going to see change in those Big Birds during 2026. And as I mentioned, in terms of supply, with FDA, because of the size of the breeding flock and the state where we are in, in terms of hatchability and the high utilization on the hatcheries, we are seeing the supply growing only 1%. So I think the trends are very positive, especially for the grilling season.

Great. Okay. And Matt, maybe just a couple of cleanups. If you could help us -- I think you gave the interest, tax and CapEx but maybe anything on G&A for the year and then how you're just thinking about the SG&A levels, which continue to be pretty impressive how we might think about that for 2016?

Yes. No problem, Peter. So from a D&A perspective, depreciation and amortization, we're looking to track about $520 million for the year for '26. 2025 was about $460 million, and then SG&A, what I would tell you is kind of think about it sort of $140 million a quarter. I think that will help kind of get you guys pretty close, maybe just a little north of that. for the full year using that $140 million a quarter.

And your next question today comes from Andrew Strelzik with BMO Capital Markets.

This is Ben covering for Andrew. So I'll start with Mexico. Just if you could dig a little deeper on what happened there during the quarter. And then we're wondering maybe what happens moving forward in the first half of '26. Is the supply-demand situation cleaned up there? Or should we expect some lingering pressure? Just trying to understand the dental cadence there?

Yes, sure. And as we've been saying, Mexico can be very volatile quarter-over-quarter. But on the year, we've always seen growth and very positive results there. In Q4, I think we have a series of events. Q4 typically is a good quarter for Mexico. But during this quarter, we saw some shifts in the export market. And Mexico was the most attractive market for, especially breast meat from Brazil and other locations, and we saw a significant increase in the exports to Mexico on the breast meat. We also saw a significant increase in pork exports to Mexico, which increased a lot the supply of meat. That impacted more the Northern region. At the same time, in the Central region, that includes the Mexico City, we saw the growing conditions very favorable for chicken. And after a strong first semester, we saw that the supply of chicken increasing in that region. So we have the 2 regions affected by different aspects. So we saw this increase in supply in the center to impact the live market prices. And because of that, we saw the weaker Q4 than anticipated. That's why we are creating the portfolio they are creating and we're talking about growing to different regions. So growing in the South region in Veracruz and growing the Peninsula because these areas are more insulated from the North and from the Central micro dynamics. On the lingering effects, I think we are seeing now the market more into the normal season patterns we're seeing slowdown in the growing conditions in the center. And we always mentioned that there are several small players when the profitability is very high in that region, they come to the market. And when the profitability starts going down, they exit that market, and we are seeing that. So we are seeing a more stable supply and demand. And on the North put as well. We're seeing that all the freezers are completely full in the North region. So I don't think that there will be any more increase in the exports to that region. So we see the volatility in Mexico, and that's why we are evolving our portfolio to be a more resilient earnings.

Got it. That's very helpful. And then my last question will be about the EU U.K. business. Very strong performance during the fourth quarter there, over -- well over 6% operating margin. Was that -- how much of that was seasonally driven? I guess is the first part of the question. And then you pointed out in the 10-K, in particular, strength in domestic demand for fresh products. So if you could kind of tie that into the volume strength and profitability strength in the EU and U.K. And just thinking about starting 2026, I mean, if it wasn't seasonally driven in the fourth quarter, would we expect 6%-plus margin to sustain there? So that's my last question.

Yes. Thank you. Yes, there is always seasonality in the U.K., especially on the pork operation. But what we are seeing in Europe and is no different than other places of the heart is the strength of the chicken business. So we're seeing the affordability, the availability and also our strategies, and we are resonating with the key customers and consumers with a differentiated offering. So we are seeing a strengthening in the chicken business in the region. But I think there is seasonality in Q4 is typically stronger in Europe than other quarters. So I think we will see significantly improvement quarter-over-quarter within this seasonality. So I think we will have a better quarter in Q1 that we have the same a year ago in Q1. Although we are seeing some weakness in that started during Q4 because of, again, the prices of specialty beef, our business in the region on the QSRs were a little bit impacted on the traffic but we are seeing some promotional activity on those QSRs. SO we expect an improvement during this Q1. Thank you.

And your next question comes from Pooran Sharma with Stephens.

This is Adam on for Pooran. So obviously, the beef environment continues to be a tailwind for chicken. In ours there's big moving pieces there, 1 Mexican cattle imports; and two, the pace of heifer retention. Just wanted to get opinion on how those 2 factors on the 2 extremes, slow versus aggressive heifer retention and the resumption or lack of cattle imports could impact chicken demand and therefore, boiler margins?

Yes. I think when we look at the Retail, and I mentioned that we saw the spreads at the highest number ever, right? And I think this is something that's been growing over time. And I think 2025 and 2026 has been exacerbated by the effect that you just mentioned on the price of of the live animals here in the U.S. and some capacity reductions in the beef industry. I think it's very difficult to look at the sensitivity on how much that delta needs to be to trigger trade downs. But I think what we are seeing is that the consumer really impacted in the inflation, especially on the food away from home, and we're seeing all this demand for chicken in the Retail. And I think it's the same in the foodservice, as I mentioned, is a matter of availability because when you look at the USDA expectations for 2026 is for the production of beef going down. So it would depend a lot more on the imports and what type of cuts will come from these imports from South America and other regions. So we don't expect the prices of beef to reduce significantly during 2026, as we mentioned because of the retention that have started. So I think that could be something that we will see in 2027. But I think overall, we are seeing a very strong demand for chicken both in Retail and foodservice.

That's helpful. And for my follow-up, I was wondering -- I think you touched on it briefly in your prepared remarks but if you could just give a brief state of the union of the disease pressure you're seeing like in Spain with -- I know we've seen somewhere between like 100 to 150 positive cases of ASF in Spain but -- anything else you can add there would be great.

Yes. Of course, our European business has been impacted because of that. I think what we are seeing is the ASF in Spain, Spain is one of the largest producers in the world of pork. And because of the ASF, they being banned from exporting to China because that those exports don't go to China, they end up in the European region, typically in U.K. and that is generating a lot of supply, especially for -- in the sausage business. And that is creating some impact in our branded business because our Richmond brand, it's a well-established brand in U.K. when it's competing with this external meat and all these private label sausage, it end up impacting in prices. And that's why we mentioned that the Richmond brand was facing some challenges during Q4 but we expect some promotional activity and the resilience of that brand is amazing. We've been growing year-over-year. So we expect that impact to reduce. Now how long that is going to continue on the ASF in Spain? And how is that going to impact long term the U.K.? I don't think that, that is something that we can foresee. But I don't believe that it's going to be a long-term impact as we are seeing the herd being reduced throughout Europe.

And your next question comes from Leah Jordan with Goldman Sachs.

I wanted to go back to your comments about foodservice in the U.S. You talked about the consumer shifting to Retail, which is a headwind for the channel but you continue to grow nicely. So just seeing if you could provide more detail on the demand you're seeing there. Any nuance between QSR versus others? And how much can new business wins continue to offset any broader industry slowdown there? Or how do you think about lapping the strength that you've had over the past year in innovation and LTOs?

Yes. Thank you, Leah. Yes. Well, again, like I mentioned, the foodservice traffic is a challenge and has been challenged over last year, and the foodservice operators are looking for promotional activity to drive traffic. When we drill down into the segments, what we are seeing is the slowdown in the full service restaurants, compensated by increases in the noncommercial especially hospitality, schools and growth in the national accounts. When we look at the promotional activity has been even the known chicken QSRs are doing a lot of promotions with chicken. And we saw the increase in the overall industry close to 3%. So we don't expect that to change during 2026. For the factors that we already mentioned on the availability of lean beef on the burgers, and the availability of other proteins and the affordability and versatility of chicken.

Okay. Great. And then just for my second question, just wanted to ask about just bear a little bit more. You've seen some nice acceleration across prepared foods overall. But just bear has been really strong for you with the share gains that it's had I know we're still waiting on that new plant to open. But how do you think about growth for that brand over the coming year, considering distribution and velocity. And then you think ultimately, longer term, how do you think about continuing to increase brand awareness or helpful penetration there?

Thank you. So it's a great point. And I think the brand awareness is still not at the levels of national expansion that we expected. But we are seeing that Just BARE is the #1 in terms of velocity where we are. And I think that's very important for the retailers. As we are discussing with our key customers on the distribution side, if you have Just BARE in your shelves, you can see that the shelf is turning faster than with any other segment. I think it's innovation, which is going to play for us to continue to grow. I think we have a very strong core products but we can innovate and stretch that brand to some other different being chop and form because it's a whole muscle today, but there's a lot of opportunities in the chop and form. And the Just BARE brand promise is exactly what the consumer is looking for today, which is a clean label, no additions of antibiotics or any other items that the consumer is looking today at the labels and compare it, and that's why that is resonating so well with the consumer. So it's gains in distribution because we're still not very national. We went from 1% to 13% market share in a matter of 5 years but still have a lot of distribution to gain and the velocity that will continue because of how the brand and the brand promise is resonating with our consumers.

Your next question comes from Thomas Henry with Heather Jones Research.

On Europe, could you elaborate on any trends besides the seasonality driving the strong volume performance? And any expectations of these continuing to '26.

Yes. I think it's a normal seasonality. We see the end of the year, a lot of promotion activity in terms of hams and bacon and other cuts. But as long-term trend, what we are seeing throughout the year is the growth of chicken. That's more important than the seasonality. I think the consumer is facing the same challenges in Europe that they are facing in the United States on the inflation. And when you look at the breakdown of the growth in total grocery Grocery is growing 4%, but chicken is growing 8% to 10%. So there is the seasonal effects, and we saw some growth in the fresh pork close to 5% this quarter but the long-term trend is a more growth in the chicken side. And of course, with the innovations that we are doing, the partnerships that we are doing in Europe on the mills, we're also creating some new lines that are generating great results. The mills are a very affordable way for a family to have their needs -- so I think it's something that we are investing together with key customers on differentiating, creating better experiences for our -- and differentiate in terms of technicity for the consumers.

And your next question comes from Palhares with Santander.

Just 2 quick ones. The first is where do you see today the capacity of genparents of shipping in the U.S. And the second one, if you could talk a bit about the new trade permit of EU towards the Brazilian chicken and whether this could have any impact from the business there?

Yes. Thank you. On the grandparents, the information we have with the USDA information when we talk about the size of the breeding flock, it improves the grandparents. And when we look at the number, it is down 1.9%. And that includes the processors and includes the grandparents. So I don't see any -- or we don't have any information about significant increase in the grandparent size of that. On the impact of the Mercosur agreement or the U.K., Europe and Brazil, what we are seeing is the normal continuation of a long-term export from Brazil, which is one of the largest chicken exporter to Europe I think Brazil typically export breast meat, and that breast meat goes to the foodservice. When you look at the U.K. consumer, they give great value to the provenance. And our chicken business and our pork business in Europe are mainly on the Retail side because we are local producers because the standards of producing in U.K., both chicken and pork are higher than everywhere else in the world. So the consumer pay a premium and they have this important trait of provenance. So when we look at the impacts of these agreements, it's more on the foodservice area. And we have a strong foodservice there that can benefit from cheaper raw material being from Thailand being from Poland or being from Brazil. So I think it is a good tailwind for our foodservice production in U.K. but it doesn't have a big impact on the Retail side.

And your next question comes from Priya Ohri-Gupta with Barclays.

Matt, the last 2 years, the operating cash flow before looking at changes in working capital has been pretty consistent around $1.6 billion or so -- is there any reason that we should think about '26 looking different from that? And then secondly, just as we think about the working capital piece, what are some of the trends that we should keep in mind as to whether that will be sort of a positive or negative contribution to the cash from operations.

Thanks, Priya. Good talking to you. Generally, I don't see a major change kind of from your first question relative to everything. Of course, we are increasing our CapEx spend retention here for 2026 versus 2025 by, call it, almost $200 million. So that, of course, will come into play. But relative to working capital, I think when you look back to 2024, right? We had a lot of kind of tailwinds for us with the large grain cost decrease in '24 versus '23. Of course, things flattened out more in '25. What we really saw there on the inventory side is we had some more purposeful increases in what I'll call whipped or finished goods because we were able to procure some cheaper breast meat at kind of opportune times, which increased some of our inventory levels. [ AR ] was kind of some of that I'll call it, headwind was really more just higher sales pricing. So overall, I would say, I don't see the repeat on the negative side on the inventory that we saw in '25. Of course, we'll have to watch and see what grain does though kind of where grain sits today, we feel it should be more flattish, and then we'll just watch and monitor an AR. Hopefully, that helps.

Yes. That's really helpful. And then just one follow-up on the CapEx piece. So there's a headline just talking about $1.3 billion in investments in Mexico through 2030. So as we think going forward, I know you gave us a little bit of context into '27. But how should we think about that $1.3 billion specifically related to Mexico over '26 to '30, if you can give us some directional sense?

Yes. Thank you. I think that is a long-term vision that we have, just like I mentioned, to grow in regions where we are not and grow our prepared foods. So that includes significant growth in the South region and in the Merida region as well as the duplication of our prepared foods facilities. And in that investment is included also some investments done by growers to support that growth. So it's not totally from us but it's because of our projects, and that will help close the gap in Mexico. Mexico is a big importer of meat, and we believe that we -- with our growth in Mexico, we can reduce the need of the imports by 35%, which helps a lot in the food security for the region.

Thank you. This concludes the question-and-answer session. I would like to turn the conference back over to Fabio Sandri for any closing remarks.

Yes. Thank you, everyone, for attending today's call throughout 2025, we accelerated our performance through a leadership mindset, living our values and driving our methods. Given our teamwork, we delivered yet another strong year. 2026 started with several weather events that impacted many regions where we operate. And I'd like to thank our team members and extend my deepest appreciation for their efforts every day and their dedication to our company and our communities. Moving forward, we must continue to drive our efforts with an unwavering focus on team member safety and well-being, product quality and sustainability. When combined with our strategy and approach, we can achieve our vision to be the best and most respected company in our industry, creating an opportunity for a better future for our team members and their families. Equally important, we initiated the next chapter in our growth journey through investments across all regions. Based on these efforts, we can further drive profitable growth, reduce volatility and enhance margins throughout our entire portfolio. To that end, I look forward to strengthening our legacy in 2026 and beyond. Thank you all.