Good morning, and welcome to the Third Quarter of 2025 Pilgrim's Pride Earnings Conference Call and Webcast. 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.

Good morning and thank you for joining us today as we review our operating and financial results for the third quarter ended on September 28, 2025. Yesterday afternoon, we issued a press release providing an overview of our financial performance for the quarter, including a reconciliation of any non-GAAP measures we may discuss. A copy of the release is available on our website at ir.pilgrims.com, along with the slides for reference. These items also have been filed as Form 8-Ks and are available online at sec.gov. Fabio Sandri, President and Chief Executive Officer; and Matt Galvanoni, Chief Financial Officer, will present on today's call. Before we begin our prepared remarks, I would like to remind everyone of our safe harbor disclaimer. Today's call may contain certain forward-looking statements that represent our outlook and current expectations as of the day of this release. Other additional factors not anticipated by management may cause actual results to differ materially from those projected in these forward-looking statements. Further information concerning these factors have been provided in yesterday's press release, our Form 10-K and our regular filings with the SEC. I would now like to turn the call over to Fabio Sandri.

Thank you, Andy. Good morning, everyone, and thank you for joining us today. For the third quarter of 2025, we reported net revenues of $4.8 billion with an adjusted EBITDA of $633 million and an adjusted EBITDA margin of 13.3%. Our performance reflects the ability of our strategies to mitigate the impact of increasing volatile commodity markets, drive category growth with key customers on retail and foodservice, and continue to close efficiency gaps in our operations. In the U.S., our diversified portfolio continued to be able to capture upsides in the commodity market while protecting from downsides. Case Ready realized strong growth as sales to key customers exceeded category averages and Big Bird improved operating costs through production efficiencies and live performance. Small Bird experienced robust demand as chicken-focused QSRs maintained steady traffic. Prepared Foods continued to expand through incremental distribution and portfolio expansion throughout retail and foodservice. Europe entered a new phase of its profitability journey through the new partnerships with key customers, investments in demand creation, and acceleration of branded growth. Branded growth, product mix optimization, and innovation will continue to be priorities during this evolution. Mexico continues to drive growth with key customers and develop brand presence in both Fresh and prepared, further diversifying our portfolio from inherent volatility in the live commodity markets. Our investments in growth continue and all projects remain on schedule. Based on these investments, we can increase returns while reducing volatility in our business, creating the opportunity of a better future for our team members and unlocking value for shareholders. Turning to supply. The most recent published USDA data indicated that ready-to-cook production for the U.S. grew 2.7% year-over-year, driven by increased headcount, improved live performance, and higher-than-average live weights. Chicken egg sets were higher than last year, giving a more productive layer flock and record hatcher utilization rates. Hatchability improved, exceeding levels from 2024 for the first time this year. As a result, chick placements were higher than Q3 of 2024 throughout the entire third quarter. When combined with positive growing conditions, live weights were higher than average and overall livability improved, increased production was seen in Q3. This scenario was more significant during the month of September. Considering the factors supporting supply, USDA's latest estimate forecast a 2% year-over-year increase in broiler production for 2025, suggesting an increase of 2.3% during the fourth quarter. As for overall protein availability, USDA projects a growth of only 0.8% for 2025. Notably, chicken is the only protein expected to see an increase, offset by decreases in the availability of beef, pork, and turkey. With respect to demand, macroeconomic indicators are shaping consumer behavior amid low sentiment. Inflation has increased for food overall and at-home eating occasions. As consumers are trying to stretch their budgets, we are seeing more trips to the retail with smaller basket sizes and lower traffic at foodservice. Nonetheless, demand for chicken remains strong across both channels, given its relative affordability, availability, and flexibility compared to other proteins. In Fresh retail, boneless chicken breast experienced notable growth as the retail pricing spread against ground beef remained at record levels. Boneless thighs also realized significant gains driven by a narrowing price gap with boneless, skinless breast and continued consumer momentum. While wing pricing remained relatively steady compared to last year, volumes continue to grow. The belly also drove growth through enhanced velocity as shoppers increasingly turn to prepared meals as a more affordable alternative to traditional ready-to-eat options. Frozen prepared also saw gains from improved velocity, along with better production mix as nuggets and strips continue to capture a large share of new occasions. In foodservice, rising costs associated with dining out are impacting overall restaurant traffic. Nevertheless, operators continue to strategically lean into chicken through value offerings, limited-time offers, and menu updates as a means to trigger or sustain consumer engagement. Value-added chicken-focused QSRs continue to leverage the affordability of chicken, outperforming the broader dining sector, showing greater resilience amid declining traffic. In exports, we have realized values compared to last year and at levels higher than historical amounts. Other than China, we have not experienced any meaningful challenges from tariffs or other barriers in our traditional trade lanes. While we still anticipate seasonal declines in the upcoming quarter, demand should be robust compared to previous years. We continue to be vigilant in our biosecurity measures, especially as commercial cases of high pathogenic avian influenza have risen. As such, our geographic diversity and expansive network of international customers will continue to be critical to manage any potential outbreaks. As for feed, corn pricing remains stable as market fundamentals balance larger-than-anticipated U.S. supply from increased corn acreage against robust interest from export markets. Based on the most recent data available, USDA expects record corn demand. Nonetheless, U.S. overall supply is expected to increase 10% versus last year, resulting in ending stocks of over 2 billion bushels. Overall, global corn stocks are expected to remain relatively flat. Soybeans fell through the quarter given increased crush capacity and record South American harvest during the first half of 2025, ensuring ample global soybean meal supply. Most recent forecasts indicate that U.S. soybean stocks will be flat compared to the prior year, whereas global soybean stocks are expected to build for the third year in a row. Global wheat production rebounded strongly as major exporting countries produced more than 23 million metric tons compared to last year. Wheat prices moved lower during Q3, generating demand and clearing supply. In the U.K., production rose over 2 million metric tons compared to the prior year. Further increases in wheat planting are anticipated this fall for harvest in the summer of 2026, which could increase availability. During the remainder of 2025, the corn and soybean meal markets will focus on final U.S. yields, the start of the South American weather season, and changes to export flows of U.S. grain and oilseeds from the ongoing trade negotiations. Turning to the U.S., chicken demand remains strong across retail and foodservice. Equally important, our diversification across bird sizes in Fresh and growth of Prepared Foods alleviated the impact of a decline in commodity market values during September. As a result, our margins were very comparable to last year. Case Ready benefited from the relative affordability of chicken in retail compared to other proteins. More importantly, sales to key customers were significantly higher than the category average, suggesting our higher attribute differentiated offerings continue to resonate with consumers. Big Bird enhanced production efficiency through improved yields, equipment upgrades, and team member training. Live operations also made significant progress through revised management programs, updated housing, and improved bird health. While we experienced some volatility in commodity chicken values in September, Big Bird margins were comparable to last year, given our operational progress and declines in feed costs. Small Birds benefited from steady demand from key customers among leading QSRs and improvement in operational excellence despite some reduction in demand in the bone-in category. In Prepared Foods, net sales grew by over 25% through expanded offerings and increased distribution. Within retail, the Just BARE brand continues to lead the category growth as market share rose by nearly 300 basis points versus the same period last year. The Pilgrim's brand line of products also continues to gain consumer traction and market price recognition. Velocity on our core items improved, and the Food & Wine and Serious Eats both recognized our Ultimate Nugget line as the best chicken nugget in their September publications. In foodservice, Prepared sales expanded faster than the channel average. Innovation played a critical role as over 80% of growth came from new items. In Europe, we have undertaken a multiyear journey to drive profitable growth. Over the past 2 years, we consolidated our manufacturing network and simplified the organization to create a more nimble, key customer-focused organization. As a part of this effort, we remain focused on quality and service. Based on our work, we have continually received recognition for our supply chain capabilities over the past several years and are once again awarded Supplier of the Year by key retailers during the quarter. With a solid manufacturing and corporate base, we are now focused on growth through our diversified protein platform with innovation, brands, and key customer partnerships. Within Fresh, demand for our chicken continues to be strong. Additional opportunities exist to grow as chicken remains the fastest-growing category within retail. Similarly, several leading QSRs continue to emphasize chicken given its affordability and availability, creating further prospects. Given this attractive environment, we are exploring investment to accelerate our growth in this segment. The pork business was more challenging during the quarter as the European hog pricing fell as demand softened from primary export markets, especially from China that started an antidumping investigation against Europe. To mitigate this scenario, we created differentiated higher attribute offerings in the U.K. and secured a long-term arrangement supporting the growth of a key customer. We will continue to pursue similar arrangements going forward. In our branded portfolio, Fridge Raiders achieved its highest-ever household penetration. Rollover continued to expand, giving incremental distribution. Both brands grew faster than the category. Our largest brand, Richmond, has experienced relatively steady volumes year-to-date. However, we have experienced increased competition from private label offerings given the availability of imported meat into the U.K. To reinvigorate growth and increase share, we will amplify our investment in promotions and continue to bring new and exciting products to the marketplace. Also, we will continue to cultivate our presence in foodservice. To that end, we've increased our distribution, and key customer QSR demand remains robust as sales have increased by over 15% year-to-date. We will look to further expand our presence across pubs and bars through leading distributions. In Mexico, we continue to diversify our portfolio and reinforce the foundation for profitable growth and reduce volatility. In Fresh retail, sales to key customers rose by nearly 9% compared to last year. Momentum for branded offerings continues to grow, led by Just BARE. Since Q3 of last year, our volumes have more than tripled. Similarly, Prepared Foods sales are up over 9% compared to last year, led by our Ping's brand, which rose over 12%. In foodservice, QSR has been exceptionally strong as sales increased by 17%. Given our continued development of key customer partnerships, branded growth, and expansion in prepared, Mexico becomes even more attractive given its enhanced return profile and growth potential. We remain committed to investments in our growth agenda. In the U.S., our portfolio is strengthening with the conversion of a Big Bird facility to Case Ready, a new protein conversion plant, a new state-of-the-art Prepared Foods facility in Walker County, combined with upgrades in processing and volume in Big Birds, all remain on schedule. Once completed, these investments will enhance our competitive differentiation in Fresh, further diversify our portfolio through brands, and enhance operating efficiencies. As a result, our U.S. business will become even better equipped to meet consumer preferences and key customer growth while better managing increasing volatility in the commodity market. Similarly, our expansions in Fresh and prepared in Mexico continue as planned. In Fresh, progress continued at Veracruz and Campeche as breeder and broiler farmers have both started production. In Prepared Foods, construction is well underway with its initial production testing slated for the late in Q4. Given these investments, Mexico will improve biosecurity, expand distribution in Fresh, and further diversify its portfolio through value-added. Like the U.S., Mexico will become even more adept at managing volatility in the live commodity markets. Taken together, this investment will reinforce our strategies, reduce risk, and increase returns for our business, creating additional value for our shareholders. And earlier this week, we published our 2024 sustainability report, which provided an update on our progress against environmental, social, and governance matters critical to our business. To that end, we continue to integrate sustainability throughout all aspects of our strategy and business to enhance environmental stewardship, conserve natural resources, and cultivate team member development. Since 2019, we have reduced our Scope 1 and 2 emissions intensity by 23% and improved our global safety index by over 77%. Usage of renewable electricity continues to be a focus area and now constitutes over 21% of our overall electricity usage. Team member development remains a key priority. Over the past year, we have provided more than 5.7 million training hours to improve skills and create opportunities within our company. Our Better Future programs continue to generate remarkable enthusiasm as more than 285 team members or their dependents have enrolled in tuition-free higher education programs. With that, I would like to ask our CFO, Matt Galvanoni, to discuss our financial results.

Thank you, Fabio. Good morning, everyone. For the third quarter of 2025, net revenues were $4.76 billion versus $4.58 billion a year ago, with adjusted EBITDA of $633.1 million and a margin of 13.3% compared to $660.4 million and a 14.4% margin in Q3 last year. Relative to net revenues, we experienced year-over-year sales growth of 2.3% in the U.S. in the quarter, driven by growth with our key customers in Case Ready and Prepared Foods volumes increasing. Mexico's revenues were up over 5% year-over-year due to an increase in sales volume. In Europe, year-over-year net revenues rose over 6%. Adjusted EBITDA margins in Q3 were 16.9% in the U.S. compared to 18% a year ago. For our European business, adjusted EBITDA margins came in at 7.9% for Q3 compared to 8.6% last year. In Mexico, adjusted EBITDA margins in Q3 were 8.2% versus 9.7% a year ago. Moving to the U.S., our adjusted EBITDA for Q3 came in at $479.1 million compared to $499.4 million a year ago. In our Big Bird business, lower grain input costs and continued operational improvements partially offset year-over-year declines in U.S. commodity chicken market pricing. Our Case Ready and Prepared Foods businesses continued their momentum with increased distribution with key customers. Case Ready's profitability was higher both year-over-year and quarter-over-quarter. However, even with a 25% year-over-year increase in net sales, higher commodity chicken input costs in previous periods was a headwind to Prepared Foods' Q3 profitability. Small Bird grew in QSR with our key customers, offsetting a more challenging environment in walks. In Europe, adjusted EBITDA in Q3 was $110.4 million versus $112 million last year. This slight year-over-year decrease was driven by pricing actions we took to address lower European hog market prices. The impacts of these pricing actions were partially offset by year-over-year cost reductions from our network optimization programs and administrative reorganization efforts. Mexico generated $43.7 million in adjusted EBITDA in Q3 compared to $49 million last year. Profitability decreased year-over-year primarily due to lower market pricing for chicken due to higher supply in certain markets as bird disease impacts were much less in those regions during Q3 2025. Relative to our SG&A costs, we incurred higher year-over-year legal settlement-related and incentive compensation costs. Our effective tax rate for the quarter was 25.6%, with our year-to-date rate at 25%, which is what we expect for the full year rate. We had $1.7 billion in total cash and available credit at the end of the quarter. We have no short-term immediate cash requirements with our bonds maturing between 2031 and 2034 and our U.S. credit facility not expiring until 2028. Our liquidity position provides us flexibility during times of volatility in the U.S. commodity markets and allows us to pursue our growth strategy, including organic growth to meet our customers' needs. We have a strong balance sheet, and we continue to emphasize cash flows from operating activities, management of working capital and disciplined investment in high-return projects. Even after paying $2 billion in dividends this year, as of the end of Q3, our net debt totaled less than $2.5 billion with a leverage ratio of slightly more than 1x our last 12 months adjusted EBITDA. Net interest expense for the quarter totaled $29 million. We anticipate our full-year net interest expense to be approximately $110 million. We spent $182 million in CapEx in the third quarter, an increase of $78 million over the third quarter in 2024. In the U.S., we made significant progress this quarter towards the conversion of our Russellville plant by the end of the first quarter of 2026 to support a retail key customer. Also in Mexico, our investments in Fresh and Prepared continue to progress and remain on schedule. We remain focused on expanding our protein conversion footprint to upgrade our portfolio mix and reduce our exposure to outside protein conversion operators. Also, as we previously discussed, we continue to review options to expand our presence in Small Bird. Finally, we are beginning here in the fourth quarter our construction efforts in Walker County, Georgia on our new Prepared Foods plant to support the growth of our Just BARE brand. We estimate our full year CapEx spend to approximate $700 million. These growth projects align to our overall strategy of portfolio diversification, focus on key customers, operational excellence, and our commitment to team member health and safety. Operator, this concludes our prepared remarks. Please open the call for questions.

The first question comes from Ben Theurer with Barclays.

I have two quick questions. First, we’ve observed a significant decline in commoditized prices compared to what has been typical seasonal performance. Could you clarify what you’re seeing in the market? What is driving this change? Is it related to hatchability or livability? Also, how do you see this affecting the seasonal recovery as we move into 2026, especially in the first quarter compared to what might be a weaker fourth quarter? My second question pertains to your portfolio. Can you provide an update on what percentage of your pricing contracts is currently tied to the commoditized bird size pricing mechanism?

Yes, thank you. Pricing is influenced by supply and demand. In the third quarter, demand mirrored last year's situation. Consumers are monitoring their spending and are increasingly concerned about inflation, which, along with rising food prices outside the home, has led foodservice operators to experience decreased foot traffic. To counter this, they have turned to promotions to attract customers, primarily focusing on chicken. Despite the decline in traffic, chicken volume in foodservice has grown by approximately 4%, notably more than 6% in the quick-service restaurants sector. With lower foot traffic, consumers are turning more towards retail, where they are also encountering inflation, particularly with beef prices. The price gap between beef and chicken has now exceeded $2, compared to just $0.50 three years ago. While chicken prices have decreased by 10%, ground beef costs have risen by 28%. This scenario has led consumers to opt for chicken, pushing demand up nearly 3% in this category as well. Demand remains strong. In Q3, our supply situation initially mirrored the first half of the year, with a smaller, younger breeding flock producing more eggs, though we encountered challenges with hatchability and livability. Supply growth in the first half was less than 2%. However, in Q3, improved conditions led to better livability and hatchability, resulting in a growth of 2.7%. Some weeks in September saw supply increases nearing 6% due to these favorable conditions and the industry processing on Saturdays to manage weight, affecting commodity markets significantly, especially prices for skinless boneless products. Prices dropped from $2.50 per pound to nearly $1.20 over four weeks, which stimulated demand. Currently, prices have stabilized and even increased by a cent last week. Thus, the strong demand is now well-aligned with supply.

The increase in supply reached nearly 6%, which affected the commodity markets. We experienced significant corrections, particularly in the skinless boneless price, which dropped from $2.50 per pound to around $1.20 per pound within four weeks, generating some demand. The positive news is that currently, prices are stable and even increased by $0.01 last week. We are observing that strong demand aligns with the current supply.

Yes. On our expos, we have a very diversified portfolio of segments. As I always say, talk about our portfolio. We are the leader in the Small Bird market. We have a big presence, and we are one of the leaders in the retail category, and we also have a big exposure in the big commodity markets. When you look into our portfolio, it's well diversified within those categories. In terms of how much it is exposed to the commodity markets, I would say that it's close to 25%, which is in line with our production or our share of production on the Big Bird category. Even in the Big Bird, we've been trying to differentiate some of our portfolio. And as we talked about in prior calls, we are the leader in the novel no-antibiotics-ever category and also in the Big Bird category. So even being exposed to the commodity, we can achieve a premium in that category.

Okay. And you can't comment on like seasonality expectations for like 1Q, correct?

Yes. On what we are seeing, as I mentioned, I think the good news is that as of the last 2 weeks, we have seen a supply and demand imbalance. And actually, as I mentioned, prices started to go up. I think it's normal to have a lower demand during Q4 for chicken. And then when we start this normal seasonality, prices start to rise in December to prepare for the strong promotional activity that we normally see on the chicken category, especially on retail during January. So when you look at the USDA expectations, growth continued to be expected in between 2% and 3% on the chicken category. We've seen this increase in excess consistently year-over-year. And we saw some seasonal cuts that were lower than prior years. But again, supply seems to be very balanced in October. And I think also when you look at the overall protein availability in the United States during Q4, USDA is expecting a sharp cut in beef production. So overall, protein availability will be very limited during Q4. Chicken will be, I think, the only category that will be up, but USDA is expecting between 2% and 3%.

The next question comes from Peter Galbo with Bank of America.

Just actually one question for me, and it's maybe more of a conceptual question. But Fabio, you mentioned the spread on beef to chicken and it seems to be at record, if not close to record levels. And you're just not seeing the cross-product elasticity I would think you would in an environment where beef is at an all-time high and chicken is hovering in some instances on some of the cuts below the 5-year averages. So I just want to understand, conceptually, as you all think about it, like why is that? It wouldn't make sense to me that beef could be at such a sustained high level and chicken prices would trade down even with seasonality. So maybe you can just explore on that topic a bit more because I think there's a lot of market participants who probably don't understand myself included, the rationality of what's happening.

Sure, Peter. That's a great question. As I mentioned earlier, the consumer is shifting towards retail due to rising prices in food away from home. It's important to consider this transition. When we analyze the spending on food away from home, we find that it is usually three times higher than at-home food costs. Currently, decreased traffic in foodservice is partially transferring to retail. Consumers want indulgent options when shopping at retail, leading them to purchase beef. This shift reflects a change in demand, as customers are moving from expensive foodservice prices to retail while still opting for high-priced beef. In retail, we also observe the highest spreads and a trend of consumers switching from beef to chicken. This situation is why beef prices remain well-supported; they're bolstered by this transition from foodservice to retail while also experiencing a trade down from high-priced beef to boneless chicken, which is currently seeing its highest spread close to $2. It's not just internal retail dynamics affecting the beef category; we are also witnessing lower beef availability, which further supports these prices.

The next question comes from Andrew Strelzik with BMO Capital.

My first one, there were 2 things that you mentioned impacting the quarter. And I'm curious about whether you view those as just third-quarter impacts or if you think those continue into the fourth quarter or even into 2026. Those are the input cost headwind to Prepared Foods and some of the demand challenges on the export environment in the EU, U.K. segment. So if you could just kind of comment on how to think about whether those should continue or that was kind of confined to the third quarter.

Yes. Looking ahead to 2026, the USDA is projecting chicken growth to be between 2% and 3%, similar to what we experienced in 2025. The factors that contributed to a strong chicken market in 2025 are still present for 2026. The industry is currently operating at a high utilization rate, particularly in hatcheries. The breeding flock numbers remain at their lowest compared to previous years, and the placement of pullets, which indicates the size of the breeding flock, aligns with replacement needs. Therefore, we do not anticipate an expansion of the breeding flock. Given the current hatch utilization rates, we do not foresee a significant increase in chicken supply for 2026. Furthermore, in comparison to other proteins, the USDA expects a significant decline in beef production, which will likely result in record low growth in net availability in the U.S., estimated to be below 1%. This, coupled with the price gap between chicken and other proteins, along with the effort from retailers and foodservice to promote chicken to boost consumer traffic, indicates a robust demand for chicken. Input costs are also a critical factor. We will keep an eye on weather conditions in South America, as they could affect global corn and soybean prices, along with ongoing trade negotiations. However, we recorded the largest acreage ever planted in the U.S. this year and are witnessing strong yields from the fields. This suggests an ample supply of corn and soybeans, so we do not foresee any significant squeeze or rise in input costs.

And Andrew, relative to your Prepared Foods question, I think it's important to note that the dynamic we saw in Q3 with relatively high commodity market pricing for chicken in July and August and then the steep drop in September, for us to flush that through the P&L within Prepared Foods, it takes a month or two, right? So we had much higher input costs in Prepared Foods inventory that flowed through the P&L in Q3, that will then kind of recede more naturally as that inventory flushes through and the new inventory is being built on input costs that are much lower, right? So it's a bit of a timing situation within U.S. Prepared Foods relative to that input cost fluctuation.

Regarding the export situation in the U.K., as I noted earlier, the Chinese antidumping measures against Europe have allowed a significant influx of commodity meat, particularly from Germany, into the U.K. Our strategy has been to distinguish our products through higher welfare standards available in the U.K. A notable example is the 10-year agreement we established with a major customer, enabling us to differentiate their offerings. This approach supports their growth while shielding us from the influx of more commodity meat, especially impacting the sausage sector, which typically relies on imported commodity meat. Consequently, this has slightly pressured the prices of our Richmond brand. However, we will continue with promotional initiatives and innovation in the market to enhance the brand's growth and the profitability of our overall portfolio.

Okay, that's very helpful. I wanted to ask you to clarify your comments about the EU and U.K. entering a new phase of profitability. This isn't surprising given the improvements in margins over the past few years and how you've described the typical margins in that area. However, considering the somewhat softer performance this quarter than we anticipated, how should we view the profit growth? How are you approaching that transition, and how should we interpret that in terms of margins or profit growth for that segment in the coming years?

Yes, that's a great point. As we move forward in Europe, we are consolidating our network manufacturing and back office, with a new office near London. This positions us well for growth, which could come through mergers and acquisitions as well as organic expansions. We have the right structure and team to support these initiatives. We will continue to enhance our portfolio organically through innovation. The best approach in Europe is to focus on innovation, especially as we see rising consumer confidence despite previous strong inflation and accelerating wage growth. Recently, there have been some renewed concerns about inflation, particularly related to the price of pigs, which has slightly impacted our branded portfolio. Nonetheless, we can continue innovating and partnering with key customers to support their growth. Notably, our chicken business in Europe is outpacing other segments, and we are making organic investments to boost chicken production by nearly 20% over the next two years.

The next question comes from Pooran Sharma with Stephens.

Just wanted to maybe just focus on Europe here. You just gave a lot of great color here with that last answer. But maybe just talking more on M&A. You just told us you're lining up some organic chicken production in Europe here over the next few years. Does this take your foot off the pedal in terms of your hunt for an M&A opportunity? Because I think in the past, you've said that maybe the next thing for you all would be some white space opportunity in Mainland Europe. And so I wanted to, a, get a sense if those organic investments slow down any sort of M&A initiatives in Europe? And b, if you could maybe just give us an update on what you're seeing in Europe? Is there anything attractive out there at this time?

Yes, sure. Thanks. And I think you're right. Where we are growing in chicken on the organic, it is in U.K. and Ireland. It's where we are present. We have a great key customer relationship. We are seeing the demand for chicken growing in U.K. and Europe. So we have the opportunity. And as I always mentioned, because of our differentiated products, we help our key customers to differentiate. And when they grow, we are allowed to grow. So this is not speculative growth. And that does not change anything on the M&A front. When you look at our portfolio in Europe, it's the most diversified that we have around the world. So we are in the chicken business. We have the pork business, but we also have the sausage and meals business along with foodservice a foodservice business in Europe. So we have a very diversified portfolio, and we're looking into opportunities in all those categories or segments. Specifically, as you mentioned, in chicken, we are present in U.K. and Ireland, and we see opportunities in other countries in the European Union for us to expand our expertise in chicken. And then within U.K. and other countries in Europe, we see some opportunities in the meal segments. We see opportunities on the sausage and branded product segments. So I think there's a lot of opportunities in Europe as the market is more fragmented in Europe as it is in other parts of the world. So we're still committed to growing and expanding our portfolio, and the organic initiatives are more focused on where we are.

Got it. Appreciate the color there. And I guess on my follow-up, I was just interested in something you said in the prepared comments. I think you mentioned that your September Big Bird margins may have been comparable to last year, which I found kind of impressive, just because our data shows somewhat of a different story. And so I was wondering if maybe you could help quantify some of these operational improvements or maybe even tease out how October Big Bird margins look in terms of PPC's view?

Thank you for the question. I can clarify that during the quarter, the margins were comparable. In September, we experienced a notable decline in prices, particularly for boneless products, due to what I mentioned about excess production in the Big Bird category. Some industry players were attempting to manage weight by processing on Saturdays, leading to a marginal supply increase in September. As a result, the margins in September were significantly lower compared to the rest of the quarter. Overall, for Q3, the margins were similar to the same period last year. Following the sharp decline, prices have stabilized and have even increased recently. This is good news as it indicates that supply and demand are balanced in Q4, and we're seeing some demand triggers in the Big Bird commodity.

The next question comes from Guilherme Palhares with Santander.

Two here from our side. The first one is on leverage. Matt said that the company has already paid $2 billion in dividends this year. But of course, this is also related to last year. And going forward, we continue to see the balance sheet being so strong, right? So if you could give us a sense of how are you thinking in terms of the capital structure for the rest of the year as in Q4, you had that extraordinary dividend last year. So how are you thinking about 2025? And the second one, Fabio, you mentioned a bit of the growth in terms of the supply. Is there any opportunity for the U.S. to grow in terms of exports as well to put some of that product on the shelves of other countries as well and gain some share on the trade?

Yes. I'll address the first question regarding Q4 and leverage. We don’t anticipate any major changes in Q4. As I previously mentioned, we paid out $2 billion in dividends this year, which significantly impacted our leverage ratios. However, we don’t expect anything too drastic. I guided that we would spend approximately $700 million in total CapEx this year, and we've spent about $440 million to date. We will see some additional CapEx in line with our quarterly run rate, which will affect our cash. Overall, I don't foresee a significant shift in our leverage ratio as we approach the end of the year. Fabio, feel free to comment on the other point.

Yes. I think on exports, it is a great point, Guilherme. I think the U.S. is very competitive in chicken production. We have the feed inputs here domestically. We have very, very competitive operations. I think our exports are actually down this year when compared to the prior year. And I think because the focus of the chicken production in the U.S. has always been the domestic market. I think even on the leg quarters that we used to export, more and more, we are deboning that part of the bird, and we created the dark meat deboning operations here in the U.S., and we're keeping that meat in the United States. So it is because of change of demographics. It is because of change in consumer preferences. And we're seeing that category growing really fast. And as a matter of fact, dark meat deboning meat is actually at par with the price of breast meat, which tells a lot about the domestic market changing, right? And because of that, we've been reducing the export of leg quarters, which used to be the, let's say, the flagship of the American exports. I think as we grow our production here in the U.S. as we are very competitive, we can capture some space on the exports. China has been one of the markets that have been closed to us because of even influenza bans that were created last year, and they will never open. despite some trade agreements that say that after 90 days without any case, the market should reopen. China never reopened to American meat. And I think the trade agreements, if they really happen on the grain side, could have some benefits for us also on the meat exports.

The next question comes from Heather Jones with Heather Jones Research.

I wanted to ask about Q4. As you mentioned, Fabio, the markets have stabilized, and the price decline has led to new demand. However, as we approach the holiday season and considering that we didn’t experience the typical seasonal cutbacks this year, along with the SNAP dollar reductions expected next week, I am curious about your outlook on pricing for November. Do you anticipate any significant downside risk to pricing during that period due to these two factors?

Thank you, Heather. As we always mention, the fourth quarter is typically when we see heightened promotional activity for other meats like hams and turkeys, which means chicken usually doesn't see strong demand during this time. However, in recent weeks, we've observed solid retail demand for chicken. The lower prices of the commodity support this demand as we can increase production at our retail plants using competitive breast meat prices that allow our key customers to engage in promotional efforts. This should bolster chicken demand, even though normally there's a focus on promotions for other meats during this season. We're closely monitoring the SNAP program, which is a significant resource for families to enhance their budgets. It's important to note that although there may be some temporary disruptions, the SNAP benefits will be paid retroactively in the future. So we anticipate demand returning once these payments are made. We're actively collaborating with our key customers to increase promotional activities using our competitively priced meat during this time.

Okay. And my follow-up is, as we're transitioning from what has been an extremely robust time for the chicken industry as far as margins to, let's call it, a more normalized time. Just wondering if you could update us on how your portfolio has changed versus, say, 3 or 4 years ago because it used to be your Big Bird segment was pretty exposed to commodity markets. But even within tray pack and to a lesser extent, Small Bird, there was still the preponderance of that business was exposed to market-based pricing in some extent. Maybe there were matrices and ranges, but there was still some exposure to how the market was moving. I was wondering, has that changed in any material way? Like has your retail pricing become more fixed? Or I mean, how should we be thinking about that as we're heading into '26?

Yes. I think we've always been upgrading our portfolio in a sense. I think over the last 3, 4 years, we have achieved, let's say, the largest antibiotic-free player in the United States. And we are also the largest organic operator in the United States. And we are also the largest only vegetable feed in the United States. And I think we're trying to differentiate our portfolio, not only from market pricing but with some differentiated products that can capture upsides even when exposed to commodity. So we've done that change. We're also investing this year, as we mentioned in the prepared remarks, to convert one Big Bird plant to a Case Ready operation. Again, our customers are growing faster than the category average. As a matter of fact, when you look into the retail, our numbers are 3 times larger in terms of growth when compared to the market, which means that our differentiated offerings are supporting our key customers to grow and win in the marketplace. And because of that, we will need to convert a more commodity Big Bird plant to a Case Ready plant. Our portfolio of pricing, as you mentioned, has changed, and I think we have less exposure to the pure commodity right now. On some of the key customers, we have negotiated prices. It is a market price, but it's a negotiated price. So we don't follow UB. We don't follow the commodity markets. What we follow is to keep our key customers competitive given what's happening in the marketplace. But that price doesn't change every month or every quarter. It's something that will change when change is needed. And it could be if the grain prices are falling more than we expected, we can provide the reduction in prices or if our cost is going up, let's say, because of labor that it has not been an issue this year, but it was in prior years. So we can increase our prices given what we are seeing both in the marketplace and in our operations. So I think we are less impacted by the commodity prices, as you mentioned. But of course, we follow some of our contracts that follow the market price.

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

Thank you, everyone, for attending today's call. In the third quarter of 2025, we experienced strong demand for our products despite some market volatility. More importantly, our team members maintained a leadership mindset and accelerated their efforts to identify and capture operational opportunities. Given their remarkable discipline and extraordinary determination, we achieved strong results for the quarter. As such, I would like to extend my deepest appreciation for their efforts. Moving forward, we must continue our work with an unwavering focus on team member safety and well-being, support our key customers' growth and close our operational gaps. As a result, we can achieve our vision to be the best and most respected company in our industry, creating a better future for our team members and their families. I look forward to accelerating our efforts and our growth during the remainder of 2025 and beyond. Thank you all.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.