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Good morning, and welcome to the Fourth Quarter and Fiscal Year 2025 Pilgrim's Pride Corporation Earnings Conference Call and Webcast. All participants will be in listen-only mode. 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 Corporation. Good morning, and thank you for joining us today as we review our operating financial results for the fourth quarter and fiscal year ended 12/28/2025. Yesterday afternoon, we issued a press release providing an overview of our financial performance for the quarter and the year 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 slides for reference. These items have also been filed as Form 8-Ks and are available online at sec.gov. Fabio Sandri, President and Chief Executive Officer and Matthew R. Galvanoni, Chief Finance Officer 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-Ks and our regular filings with the SEC. I would now like to turn the call over to Fabio Sandri. Thank you, Andrew. 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 $18,500,000,000 and adjusted EBITDA rose to $2,300,000,000. 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 from 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 reached $1,000,000,000, 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 continued to grow, further diversifying our portfolio. Based on these efforts, margins and overall adjusted EBITDA continued 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 2025, we reported net revenues of BRL 4.5 billion. We had adjusted EBITDA of BRL 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 business improved efficiencies both in plant and live operations. Prepared foods continued to drive category-leading growth across retail and foodservice, further diversifying our portfolio. Investments to grow our presence in key customers, increase capacity value added, and enhance operational efficiency continue to progress as planned. In Europe, we increased overall adjusted EBITDA compared to the same quarter prior year. Our fresh operations drove the majority of the gains through improved productivity and enhanced mix. Key customer demand was stable, while our portfolio of key brands continued to grow. Mexico faced difficult circumstances given increased imports of animal-based proteins and unbalanced fundamentals in the live market. Our diversified efforts continue to gain traction as branded fresh and prepared offerings both rose compared to last year. Turning to supply, the USDA indicated that ready-to-cook production for the U.S. rose 2.1% year over year in 2025, driven by increased headcount, improved live performance, and higher average live weights. Eggs were higher than 2024, giving a more productive layer flock and record hatchery utilization. Hatchability improved sequentially in Q4, with seasonality and a younger flock, but are still below the five-year average. Chick placements were higher throughout the entire quarter compared to last year. After peaking in Q3, live weights declined and ended the fourth quarter consistent with prior year levels. Looking forward, USDA reports a 1.9% year-over-year decline in the layer flock in January 2026, alongside the 3.1% drop in pullet placements compared to 2024. Given these factors, along with other considerations, the most recent USDA estimates suggest moderate production growth of 1% in 2026 compared to last year. As for overall protein availability, USDA projects growth of 1.5% in 2026, with challenges in the beef production partially compensated by higher beef imports. From a demand standpoint, consumer sentiment remains low given continued economic uncertainty. Inflation for food at home and away from home continues to impact consumers' available income. Nonetheless, chicken's affordability was exceptionally appealing across channels and categories. In retail, consumers continue to stretch their budgets through more frequent trips with smaller basket sizes. Within the channel, the meat department continues to lead performance as it remains a key priority for consumers. Chicken experienced volume growth across all cuts versus prior quarter. Boneless skinless breast prices decreased 1% compared to last quarter, while prices of other proteins rose, especially ground beef that is setting new all-time highs. As a matter of fact, when compared to two years ago, prices of boneless at retail were reduced by 1.7% while prices of ground beef have increased 22%. As a result, record pricing spreads emerged further strengthening demand for chicken. Similar to boneless breast, dark meat from boneless thighs also continued to experience significant growth. Deli increased slightly versus last year as velocity more than offset changes in mix distribution and pricing. Consumers also look for convenience, and in the frozen chicken category, we saw significant growth with continued strength in velocity. In foodservice, rising costs associated with dining out continued to pressure overall restaurant traffic, particularly in the full-service formats. However, growth in QSRs and non-commercial channels compensated for these declines, supported by operators' continued strategic focus on chicken through value offerings, limited-time promotions, and menu innovation. Chicken-centric QSRs are leveraging the protein's affordability to drive traffic and engagement, outperforming the broader dining sector. Within foodservice, boneless dark meat volumes are growing at double-digit rates across all segments. Wings are gaining momentum and tenders continue to deliver steady consistent growth. In exports, industry volumes accelerated during Q4. Within Pilgrim's demand was primarily driven from Southeast Asia and Mexico. Pricing remained high relative to historical levels and continues to be elevated in 2026. While trade disruptions have impacted certain markets given the HPAI outbreak, the overall effect has been relatively muted on both pricing and volumes as most U.S. trading partners quickly limit restrictions to either the county or specific zones. As a result, trade simply shifts from other locations outside the impacted area during the restriction period. Moving forward, we expect exports to remain strong and well diversified across markets. Turning to feed inputs, corn moved marginally higher in Q4 compared to previous quarter. However, prices moderated in January as the U.S. corn realized new records in harvest area, yield, and total supply. While record demand currently exists, corn ending stocks are still expected to increase to 2,200,000,000, creating the highest stock-to-use ratio since 2019. Soybeans and soybean meal rallied in Q4, given the resumption of U.S. soybean sales to China, strong domestic interest, and export demand for soybean meal. Potential upside appears limited given favorable weather in South America for soybean production and a relatively slow pace of U.S. soybean exports. Since shipments are below average, the USDA anticipates ending stocks will rise by 3,000,000 bushels, up 7% versus prior year. Global soybean stocks and processing capacity are also expected to increase, generating ample supplies of meal. Global wheat stocks continue to be well supplied and production increased by 41 million metric tons versus prior year. Every major producer experienced above-average crops, reducing the risk of physical disruption in shipments. Additional tailwind may emerge from increased wheat acreage planted in the UK.

Within the U.S., our diversified fresh portfolio increased volume compared to the same period last year as consumers continue to seek affordability offerings for their meal occasions across retail and foodservice. Our higher-attribute differentiated offerings in case-ready accelerated its marketplace presence. Volumes to key customers increased nearly two times the category. Sales and profitability rose compared to last year from sustained growth. Small Bird also realized similar success, as volumes to QSR remain robust despite its low market for bone-in chicken and whole birds. Given continued market shift to boneless cuts, extensive key customer partnerships, and growth aspirations, we will evaluate and adjust our portfolio to match demand accordingly. In Big Bird, commodity cutout values fell nearly 20% compared to last year. Nonetheless, the business was able to improve its efficiencies in live operations and in production. Equally important, we further leveraged our position as the leading supplier of NAE meat to support our robust growth of value-added offerings. To that end, Big Bird will continue to increase supplies to our internal prepared foods, reducing volatility and enhancing margins for our portfolio. During the quarter and the beginning of 2026, our team also undertook a variety of projects to strengthen our key customer partnerships and enhance operational excellence, including investments within Big Bird to increase our portioning capacity and differentiated cuts. Through these efforts, our team managed through planned downtime and adjusted production across locations accordingly to ensure sufficient availability, maintain quality, and uphold service levels. Prepared foods sales grew 18% compared to the same period last year, given branded growth across retail and foodservice. Just BARE momentum continues to accelerate market share in retail; it rose nearly 300 basis points compared to the same period last year. Equally important, it has the highest velocity of any brand within frozen chicken. Further growth opportunities exist through increased distribution. Our innovation and approach to both flavors under the Pilgrim's brand also continues to receive accolades, as People’s Food Awards recognized our Cheesy Jalapeño Nugget line as a category winner. In foodservice, we continue to build our presence, given continued growth with national accounts and schools. Investment in the new prepared facility in Georgia to meet demand for our fully cooked offerings remains on schedule. Turning to Europe, consumer sentiment continues to be relatively subdued. Nonetheless, we improved our profitability and maintained stable demand compared to the same period last year, given consistent execution of our strategies. Within retail, chill meals and fresh offerings were among the fastest growing categories. As such, our chicken business drove profitable growth, led by our differentiated “Pro 3” offerings at select customers. Our added value business remains steady, while our pork experienced challenges from excess supply and animal health issues emerging in Spain, triggering export restrictions in the EU. Despite these challenges, our team maintained volume and increased profitability compared to last year. Our diversification efforts through key brands continue to progress, as overall sales and volumes rose compared to last year.

Fridge increased share yet again, given the effectiveness of recent changes to pricing and packaging. The momentum for the Rollover continues to accelerate from additional distribution with new customers. The Richmond brand was challenged by low-cost private label offerings, but recent investments in promotional and innovation activity have been beneficial in resuming our growth trajectory. We continue to develop our innovation pipeline in close collaboration with our key customers. To that end, we have created a variety of new platforms in chill meals, focused on diet, health, and ethnic offerings. To date, market acceptance has been promising, given incremental distribution awards and consumer interest. In foodservice, visits fell at QSRs given concern regarding affordability. As a result, our volumes were impacted, especially during the late half of Q4. To reverse this trend, several of our QSR customers reignited promotional activity during 2026. In Mexico, challenging market circumstances arose in Q4, given increased imports of animal-based protein. As a result, the short-term supply of meat and poultry in Mexico increased to levels not previously experienced. These conditions were further amplified by weakened market fundamentals in the live commodity market, as improved growing conditions increased supply. Nonetheless, we continue to drive our strategies, growing volume in retail, QSR, and foodservice channels compared to last year. We also increased volumes by double digit in our fresh branded portfolio versus 2024. Just BARE continues to be extremely well received as sales have grown more than two times compared to last year. Similarly, prepared sales volumes increased by 8% versus last year, led by key customers in foodservice and QSR. Based on these efforts, we continue to diversify our portfolio and reduce the volatility for our business. Despite these short-term challenges, we continue to have growth ambitions in Mexico given its long-term growth potential, status as a net importer of animal protein, and effectiveness of our strategies. Our growth plans will further mitigate the volatility of our portfolio, resulting in a higher more resilient earnings profile. We have already begun implementation. In fresh, our efforts to build domestic supply, create national distribution capabilities, and diversify our geographical presence remain on schedule, with growth in the South Region in Veracruz and in the Peninsula Region in Mérida. In prepared, we are doubling our capacity of fully cooked products through the expansion of our facility in Porvenir. We anticipate our increased capacity coming online during the second quarter, further enabling growth for the second half of the year. Our growth intentions in Mexico are not isolated, and overall prospects for chicken remain strong globally, given relative affordability, emerging trends and consumer preferences, and healthy attributes. As such, our growth investments previously announced in the U.S. can further capitalize on these trends, reinforce our strategies, and strengthen our competitive advantage. Given this environment, our portfolio will also continue to evolve. To support key customer growth in fresh, we are converting one of our commodity Big Bird plants to a case-ready plant. We expect this conversion to become operational during 2026. To support the expansion of prepared foods, we will install equipment upgrades and modify our plant layouts in Big Bird, leveraging our internal supply of differentiated NAE portion raw materials. Regardless of these investments, we fully expect to remain consistent in our quality and service levels, given our extensive network of facilities and overall supply chain capabilities. More importantly, we will have fortified our key customer partnerships and improved operational efficiencies, which will reduce volatility, enhance margins, and drive profitable growth. In sustainability, our journey continues. We have made significant headway in the reduction of our carbon-based direct and indirect emission intensity used for processing compared to last year. External agencies continue to recognize progress in environmental and social matters as our scores improved compared to last year. Improvements in team member development continue to be exceptionally well received as over 2,300 team members or their dependents have signed up for our Better Futures program, of which 780 have begun their selected academic pathway. With that, I would like to ask our CFO, Matthew R. Galvanoni, to discuss our financial results. Thank you, Fabio. Good morning, everyone.

For 2025, net revenues were $4,520,000,000 versus $4,370,000,000 a year ago, with adjusted EBITDA of $415,100,000 and a margin of 9.2% compared to $525,700,000 and a 12% margin in Q4 last year. For fiscal year 2025, net revenues were $18,500,000,000 versus $17,900,000,000 in fiscal 2024, growth of 3.5%, while increasing adjusted EBITDA by 2.5% from $2,210,000,000 in fiscal 2024 to $2,270,000,000 this year. Back-to-back years with adjusted EBITDA margins greater than 12%. Adjusted EBITDA in the U.S. Q4 came in at $174,200,000 with adjusted EBITDA margins 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 faced 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 $11,000,000,000 versus $10,600,000,000 in fiscal 2024, with adjusted EBITDA of $1,630,000,000 and a 14.8% margin compared to $1,560,000,000 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 $131,400,000 versus $117,100,000 in 2024, a 12.2% increase. For the full year, Europe's adjusted EBITDA improved 11.4% to $453,100,000 in 2025 from $406,900,000 in 2024. Europe drove improved profitability with growth in poultry sales and through the impacts of the series of operating efficiencies implemented over the last few years. Our European businesses’ streamlined organizational structure and focus on innovative offerings has positioned it to partner more efficiently with our key customers in the region. We recognized approximately $31,000,000 of restructuring charges during the year, down from $93,000,000 in 2024. While we continue to pursue efficiency measures, we anticipate the majority of these charges and these programs are behind us. Mexico made $9,500,000 in adjusted EBITDA in Q4 compared to $36,900,000 last year. When considering the full year, Mexico made $186,700,000 in adjusted EBITDA, or an 8.8% margin, falling short of last year's 11.8% margin. Mexico experienced lower market pricing in the fourth quarter, driven by higher availability of imported animal-based protein. Although we did record $77,000,000 in litigation-related settlement charges, our GAAP SG&A expenses in the fourth quarter were lower than last year, primarily due to a decrease in legal settlement expenses and cost efficiencies realized in Europe. For the full year, SG&A expenses were flat to last year, with slightly lower legal settlement costs being offset by higher brand marketing investment. Net interest expense for the year was $110,000,000. Currently, we forecast our 2026 net interest expense to be between $115,000,000 and $125,000,000. Our full year 2025 effective tax rate was 27.9%. We recorded a discrete tax item in the fourth quarter related to a catch-up for U.S. state unitary taxes, which will not reoccur next year. As such, for 2026, we anticipate our effective tax rate to approximate 25%. We have a strong balance sheet and will continue to emphasize cash flows from operating activities, management of working capital, and disciplined investment in high return projects. As of the end of the year, our net debt totaled approximately $2,450,000,000 with a leverage ratio of less than 1.1 times our last twelve months adjusted EBITDA. Our liquidity position remains very strong. At the end of the fiscal year, we had over $1,800,000,000 in total cash and available credit. We have no short-term immediate cash requirements with our bonds maturing between 2031 and 2034 and our U.S. credit facilities not expiring until 2028. We finished the year spending $711,000,000 of CapEx. Included in our 2025 capital spending were the growth projects in Mexico, the Big Bird plant conversion to support a key retail customer, early progress in our new prepared foods facility in Walker County, Georgia to support our Just BARE brand growth plan, and other projects that Fabio previously mentioned. The Big Bird plant conversion and the Mexican projects are on track to be completed by April. Currently, we forecast 2026 CapEx spending to be between $900,000,000 and $950,000,000 as we progress through these and the other projects to support prepared foods growth previously noted by Fabio. As mentioned in the past, our sustaining capital spend approximates $400,000,000 per year. We will continue to follow our disciplined approach to capital allocation as we look to profitably grow the company. We will continue to align investment priorities with our overall strategies: portfolio diversification, focus on key customers, operational excellence, and commitment to team member health and safety. Operator, this concludes our prepared remarks. Please open the call for questions.

We will now begin the question and answer session. In the interest of allowing equal access, your first question today comes from Benjamin M. Theurer with Barclays. Please go ahead.

Yes, good morning and thanks for taking my question, Fabio and Matt. Two quick ones. So number one, maybe just on the current growing conditions, and you have laid it out in your prepared remarks. What kind of the cutout levels and pricing is compared to historic levels and particularly versus the last two years? So as we look into the first quarter and with hatchability coming down, how much of that would you say is related to just the genetic issue coming back up? Or is it more of the 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 Q1. Yes. Thank you, Ben. Good morning.

Yes, when I 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 is 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, there will be only 1%. I think the hatchability issue is part of this breed that we have, and there is 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 one trait or another. So when we look at the profitability of the bird, we look at, of course, hatchability, but we look at conversions and we look at yields. And as of today, this bird, despite having hatchability that is below the five-year or below previous years, still has the better yield and the better performance in terms of feed conversion than other birds. So I do not expect any significant changes in the breed. Of course, there are always new breeds coming online, but it takes time for the new breeds to roll out. Okay, perfect. And then my second question just around within capital allocation, obviously CapEx, you have mentioned the $900,000,000 to $950,000,000. That is a good $200,000,000 increase versus last year and kind of brings us to the $0.5 billion investment for the year versus sustaining. So as you kind of 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 have 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 carries then potentially into 2027 as you roll out more projects, just to think about the path of CapEx beyond 2026?

Oh, great point. And I think we are always looking for the trends in the market and how can we support our key customers and we can improve our portfolio. So in that regard, we are always looking to grow our prepared foods and I think we mentioned how outstanding we have results, especially because of the Just BARE brand. So we are building that new facility in Georgia, and that will take investments that started last year. It is going to take 2026 and will roll out to 2027. In Mexico, as we mentioned, we are also diversifying our geography. 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 we are increasing our investments in those two regions. And that is smaller and it is 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 is going to be all done during this year. And the changes on the 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 birds to a more boneless. I think we all discussed about the sandwich wars many quarters ago. I have been discussing that and we are seeing that trend. We may convert one small bird plant to a more deboning plant rather than a bone-in plant.

Okay. Perfect. Thanks, Fabio. And your next question comes from Peter Thomas Galbo with Bank of America. Please go ahead.

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

Yes, thank you, Peter, and good morning. We are seeing several trends supporting the demand for chicken. Starting with overall, we are seeing these macroeconomic indicators that are 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 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 on the prepared remarks, compared to last quarter prices in retail for boneless breast have 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 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 are seeing the menu 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 do not think that we are going to see change in those big trends during 2026. And as I mentioned in terms of supply, USDA, 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 that the trends are very positive, especially for the grilling season.

Okay. Thanks for that. 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 D&A for the year and then how you are just thinking about the SG&A levels, which continue to be pretty impressive, how we might think about that for 2026. Thanks very much, guys.

Yes, no problem, Peter. Yes, good morning. So from a D&A perspective, to depreciation and amortization, we are looking to track to about $520,000,000 for the year for 2026. 2025 was about $460,000,000. And then SG&A, what I would tell you is kind of think about it sort of $140,000,000 a quarter. I think that will help get you guys pretty close, maybe just a little north of that for the full year using that $140,000,000 a quarter.

Awesome. Thanks, guys.

Yeah, thank you. Yeah, there is always seasonality in the UK, especially in the pork operation. But what we are seeing in Europe, and it is no different than other places of the earth, is the strength of the chicken business. So we are seeing the affordability, the availability, and also our strategies, and we are resonating with the key customers and consumers with the differentiated offerings. So we are seeing a strengthening in the chicken business in the region. But I think there is seasonality in Q4. It is typically stronger in Europe than other quarters. I think we will see significant improvements quarter over quarter within this seasonality. So I think we will have a better quarter in Q1 than we had the same year ago in Q1. Although we are seeing some weakness in QSR that started during Q4 because of, again, the prices of specialty beef, our business in the region on the QSRs was a little bit impacted on the traffic. But we are seeing some promotional activity on those QSRs. We expect an improvement during this Q1.

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

Thank you. Good morning. 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 if you could provide more detail on the demand you are 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 have had over the past year in innovation and LTOs?

Yeah. Thank you, Leah. Yeah. Again, like I mentioned, the foodservice traffic is a challenge and has been challenged over the last year, and the foodservice operators are looking for promotional activity to drive traffic. When you drill down into the segments, what we are seeing is a slowdown in the full-service restaurants compensated by increases in the non-commercial, especially hospitality, schools, and growth in the national accounts. When you look at the promotional activity, it has been even the non-chicken QSRs are doing a lot of promotions with chicken, and we saw the increase in the overall industry close to 3%. So we do not 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. Thank you. And then just for my second question, just wanted to ask about Just BARE a little bit more. You have shown some nice acceleration across prepared foods overall, but Just BARE has been really strong for you with the share gains that it has had. I know we are 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 ultimately, longer term, do you think about continuing to increase brand awareness or household penetration there?

Thank you. It is 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 number one in terms of velocity where we are. I think that is 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 is innovation which is going to play for us to continue to grow. I think we have a very strong core products. We can innovate and stretch that brand to some other different being chopped and formed because it is a whole muscle today, but there are a lot of opportunities in chopped and formed. And the Just BARE brand promise is exactly what the consumer is looking for today, which is a clean label, no addition of antibiotics, or any other items that the consumer is looking at today at the labels and comparing, and that is why that is resonating so well with the consumer. So it is gains in distribution because we are still not very national. We went from 1% to 13% market share in a matter of five years but still have a lot of distribution to gain, and the velocity that will continue because of how that brand and the brand promise is resonating with our consumers.

Great. Thank you.

And your next question comes from Thomas Henry with Heather Lynn Jones Research. Please go ahead.

Good morning, guys. Thanks for taking the question. On Europe, could you elaborate on any trends besides the seasonality driving that strong volume performance? And any expectations of these continuing into 2026? Thank you.

Yeah, I think it is a normal seasonality. We see the end of the year, a lot of promotional activity in terms of hams and bacon and other cuts, but as a long-term trend, what we are seeing throughout the year is the growth of chicken. That is 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 are the seasonal effects, and we saw some growth in the fresh pork, close to 5% this quarter, but the long-term trend is 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 meals are also creating some new lines that are generating great results. The meals are a very affordable way for a family to have their needs. So I think it is something that we are investing together with our key customers on differentiating, creating better experiences for our end consumer, and differentiating in terms of the ethnicity for the consumers.

And your next question comes from Guilherme Palhares with Santander. Please go ahead.

Good morning, everyone. Thank you for taking my questions. Just two quick ones. First is, where do you see today the capacity of grandparents of shipping in the U.S.? And the second one, if you could talk a bit about the new trade permit of the EU towards the Brazilian chicken, and whether this could have any impact from the business there?

Thank you. Yes, thank you. On the grandparents, the information we have is the USDA information. When we talk about the size of the breeding flock, it includes 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 do not see any, or we do not have any information about significant increase in the grandparents’ size. On the impact of the Mercosur agreement, or the UK-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 exporters, to Europe. I think Brazil typically exports breast meat, and that breast meat goes to the foodservice. When you look at the UK 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 the UK, both chicken and pork, are higher than everywhere else in the world. So the consumer pays a premium and they have this important trait of provenance. So when we look at the impacts of these agreements, it is 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. I think it is a good tailwind for our foodservice production in the UK, but it does not have a big impact on the retail side.

And your next question comes from Priya Joy Ohri-Gupta with Barclays. Please go ahead.

Hi, good morning. Thank you for taking the question. Matt, for the last two years, the operating cash flow before looking at changes in working capital has been pretty consistent around $1,600,000,000 or so. Is there any reason that we should think about 2026 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 a positive or negative to the cash from operations? Thanks.

Thanks, Priya. Good talking to you. Generally, I do not see a major change relative to everything. Of course, we are increasing our CapEx spend intentions here for 2026 versus 2025 by, call it, almost $200,000,000. So that, of course, will come into play. But relative to working capital, I think when you look back to 2024, we had a lot of tailwinds for us with the large grain cost decrease in 2024 versus 2023. Of course, things flattened out more in 2025. What we really saw there in the inventory side is we had some more purposeful increases in what I will call WIP 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, some of that headwind was really more just higher sales pricing. So overall, I would say I do not see the repeat on the negative side on the inventory that we saw in 2025. Of course, we will have to watch and see what grain does. But kind of where grain sits today, we feel it should be more flattish. And then we will just watch and monitor in AR. Hopefully, that helps.

Yes. That is really helpful. And then just one follow-up on the CapEx piece. There is a headline just talking about $1,300,000,000 in investments in Mexico through 2030. So as we think going forward, and I know you gave us a little bit of context into 2027, but how should we think about that $1,300,000,000 specifically related to Mexico over 2026 to 2030, if you could give us some directional sense?

Yeah. 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 Mérida 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 is not totally from us, but it is because of our projects, and that will help close the gap in Mexico. Mexico is a big importer of meat, and we believe that 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.

That is helpful. 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 would like to thank our team members and extend my deepest appreciation for their every day and their dedication to our company and our community. 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.