v3.25.4

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 28, 2025
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income (loss) before income taxes by jurisdiction is as follows:
| Year Ended
| December 28, 2025 |  | December 29, 2024 |  | December 31, 2023
| (In thousands)
U.S. | $ | 1,363,533 |  |  | $ | 1,428,497 |  |  | $ | 26,887 |
Foreign | 138,605 |  |  | (16,228) |  |  | 338,335 |
Total | $ | 1,502,138 |  |  | $ | 1,412,269 |  |  | $ | 365,222 |
The components of income tax expense (benefit) are set forth below:
| Year Ended
| December 28, 2025 |  | December 29, 2024 |  | December 31, 2023
| (In thousands)
Current |  |  |  |  |
Federal | $ | 244,524 |  |  | $ | 172,269 |  |  | $ | (19,727) |
Foreign | 121,437 |  |  | 113,194 |  |  | 59,326 |
State and other | 42,794 |  |  | 34,752 |  |  | (3,369) |
Total current | 408,755 |  |  | 320,215 |  |  | 36,230 |
Deferred |  |  |  |  |
Federal | 19,293 |  |  | 21,334 |  |  | 12,783 |
Foreign | (16,577) |  |  | (25,697) |  |  | (10,573) |
State and other | 7,323 |  |  | 9,194 |  |  | 4,465 |
Total deferred | 10,039 |  |  | 4,831 |  |  | 6,675 |
Current and Deferred |  |  |  |  |
Federal | 263,817 |  |  | 193,603 |  |  | (6,944) |
Foreign | 104,860 |  |  | 87,497 |  |  | 48,753 |
State and other | 50,117 |  |  | 43,946 |  |  | 1,096 |
Total Current and Deferred | $ | 418,794 |  |  | $ | 325,046 |  |  | $ | 42,905 |
The effective tax rate for 2025 was 28.0% compared to 23.0% for 2024 and 11.7% for 2023. The following table reconciles the statutory U.S. federal income tax rate to the Company’s effective income tax rate:
| Year Ended
| December 28, 2025 |  | December 29, 2024 |  | December 31, 2023
| (In thousands, except percent data)
U.S. federal statutory tax rate | $ | 315,449 |  | 21.0 | % |  | $ | 296,577 |  | 21.0 | % |  | $ | 76,697 |  | 21.0 | %
United States |  |  |  |  |  |  |  |
Changes in valuation allowances | 820 |  | 0.1 |  |  | 3,278 |  | 0.2 |  |  | (1,071) |  | (0.3) |
Effect of cross-border tax laws |  |  |  |  |  |  |  |
Global intangible low-taxed income | (434) |  | — |  |  | 1,501 |  | 0.1 |  |  | 9,294 |  | 2.6 |
Other | 6,502 |  | 0.3 |  |  | 5,936 |  | 0.4 |  |  | (2,986) |  | (0.8) |
Nontaxable or nondeductible items |  |  |  |  |  |  |  |
Other | 9,225 |  | 0.6 |  |  | 4,981 |  | 0.3 |  |  | 2,887 |  | 0.8 |
Tax credits |  |  |  |  |  |  |  |
Foreign tax credit | — |  | — |  |  | — |  | — |  |  | (5,530) |  | (1.5) |
Other | 3,308 |  | 0.2 |  |  | (7,534) |  | (0.5) |  |  | (2,267) |  | (0.6) |
State and local income taxes, net of federal income tax effect | 74,849 |  | 5.0 |  |  | 28,517 |  | 2.0 |  |  | (13,031) |  | (3.6) |
Foreign tax effect |  |  |  |  |  |  |  |
Ireland |  |  |  |  |  |  |  |
Other | — |  | — |  |  | 2,500 |  | 0.2 |  |  | 843 |  | 0.2 |
Statutory income tax rate differential | 94 |  | — |  |  | 963 |  | 0.1 |  |  | 2,177 |  | 0.6 |
Changes in valuation allowances | (1,348) |  | (0.1) |  |  | (1,767) |  | (0.1) |  |  | 2,286 |  | 0.6 |
Luxembourg |  |  |  |  |  |  |  |
Imputed interest on intercompany financing | (14,754) |  | (1.0) |  |  | (14,907) |  | (1.1) |  |  | (15,871) |  | (4.3) |
Other | 1,495 |  | 0.1 |  |  | 22 |  | — |  |  | 11 |  | — |
Statutory income tax rate differential | 1,498 |  | 0.1 |  |  | 1,699 |  | 0.1 |  |  | 2,435 |  | 0.7 |
Changes in valuation allowances | 799 |  | 0.1 |  |  | 752 |  | 0.1 |  |  | 618 |  | 0.2 |
Malta |  |  |  |  |  |  |  |
Notional deduction against interest income | — |  | — |  |  | — |  | — |  |  | (12,392) |  | (3.4) |
Notional deduction carryforward from prior year | (24) |  | — |  |  | (25,963) |  | (1.8) |  |  | — |  | — |
Other | (523) |  | — |  |  | (451) |  | — |  |  | (1,082) |  | (0.3) |
Statutory income tax rate differential | (1,043) |  | (0.1) |  |  | (899) |  | (0.1) |  |  | 5,508 |  | 1.5 |
Mexico |  |  |  |  |  |  |  |
Non taxable and nondeductible items | 3,054 |  | 0.2 |  |  | 294 |  | — |  |  | 348 |  | 0.1 |
Foreign currency translation | 5,563 |  | 0.4 |  |  | (6,222) |  | (0.4) |  |  | (29,437) |  | (8.1) |
Other | (9,610) |  | (0.6) |  |  | 2,109 |  | 0.1 |  |  | (4,594) |  | (1.3) |
Statutory income tax rate differential | 16,046 |  | 1.1 |  |  | 24,116 |  | 1.7 |  |  | 18,026 |  | 4.9 |
Changes in valuation allowances | (111) |  | — |  |  | 180 |  | — |  |  | (1,028) |  | (0.3) |
United Kingdom |  |  |  |  |  |  |  |
Federal tax credit carryforward adjustment from prior years | — |  | — |  |  | 19,168 |  | 1.4 |  |  | 592 |  | 0.2 |
Other | 2,807 |  | 0.2 |  |  | 5,250 |  | 0.4 |  |  | (6,478) |  | (1.8) |
Statutory income tax rate differential | 5,360 |  | 0.4 |  |  | 2,622 |  | 0.2 |  |  | 875 |  | 0.2 |
Changes in valuation allowances | (3,004) |  | (0.2) |  |  | (18,221) |  | (1.3) |  |  | 14,155 |  | 3.9 |
Other foreign jurisdictions | 2,776 |  | 0.2 |  |  | 545 |  | — |  |  | 1,920 |  | 0.5 |
Total | $ | 418,794 |  | 28.0 | % |  | $ | 325,046 |  | 23.0 | % |  | $ | 42,905 |  | 11.7 | %
In 2025, state and local taxes in California, Illinois, Florida and Minnesota comprise the majority of the state and local income taxes, net of federal effect category. In 2024, state and local income taxes in California, Texas and Illinois comprise the majority of the state and local income taxes, net of federal effect category. In 2023, state and local income taxes in Florida and South Carolina comprise the majority of the state and local income taxes, net of federal effect category. Pilgrim’s historically would settle its stand-alone unitary tax liability with JBS USA the year subsequent to the actual state tax return filings. Due to the new tax sharing agreement with JBS USA effective December 30, 2024, Pilgrim’s is currently required to estimate and pay its stand-alone unitary tax liability on a quarterly basis following current year estimated state tax deadlines. Since the tax accounting method for Pilgrims’ state taxes is the cash method, this led to 2024 and 2025 state unitary payments being incurred in 2025, and a higher state effective tax rate for the 2025 year. See “Note 1. Business and Summary of Significant Accounting Policies” for more information regarding the new tax sharing agreement. Nontaxable and Nondeductible items primarily relate to expenses for meals and entertainment and inflationary adjustments incurred by PPC Mexico that are not deductible for income tax purposes under applicable tax regulations. These amounts impact the effective tax rate as they represent permanent differences between financial reporting and taxable income. Income taxes paid (net of refunds) exceeded 5% of total income taxes paid (net of refunds) in the following jurisdictions:
| Year Ended
| December 28, 2025 |  | December 29, 2024 |  | December 31, 2023
| (In thousands)
U.S. federal | $ | 151,548 |  |  | $ | 125,143 |  |  | $ | (28,777) |
U.S. state and local |  |  |  |  |
Florida | — |  |  | — |  |  | 3,150 |
Other | 74,131 |  |  | 23,513 |  |  | (1,388) |
Total state and local | 74,131 |  |  | 23,513 |  |  | 1,762 |
Foreign |  |  |  |  |
Mexico | 55,310 |  |  | — |  |  | 39,053 |
United Kingdom | 67,361 |  |  | 30,909 |  |  | 2,741 |
France | — |  |  | 11,668 |  |  | 3,847 |
Other | 13,542 |  |  | 6,324 |  |  | 1,122 |
Total foreign | 136,213 |  |  | 48,901 |  |  | 46,763 |
Total | $ | 361,892 |  |  | $ | 197,557 |  |  | $ | 19,748 |
Significant components of the Company’s deferred tax liabilities and assets are as follows:
| December 28, 2025 |  | December 29, 2024
| (In thousands)
Deferred tax liabilities |  |  |
PP&E and identified intangible assets | $ | 523,968 |  |  | $ | 495,571 |
Inventories | 104,591 |  |  | 93,513 |
Operating lease assets | 65,910 |  |  | 63,717 |
Other | 19,406 |  |  | 6,959 |
Total deferred tax liabilities | 713,875 |  |  | 659,760 |
Deferred tax assets |  |  |
U.S. net operating losses | 1,025 |  |  | 14,603 |
Foreign net operating losses | 82,035 |  |  | 49,166 |
Credit carry forwards | 14,644 |  |  | 20,099 |
Allowance for credit losses | 3,954 |  |  | 3,532 |
Accrued liabilities | 119,226 |  |  | 92,565 |
Workers’ compensation | — |  |  | 7,172 |
Incentive compensation | — |  |  | 1,161 |
Operating lease liabilities | 66,523 |  |  | 63,717 |
Interest expense limitations | 59,121 |  |  | 72,615 |
Other | 32,107 |  |  | 27,918 |
Total deferred tax assets | 378,635 |  |  | 352,548 |
Valuation allowance | (85,875) |  |  | (86,257) |
Net deferred tax assets | 292,760 |  |  | 266,291 |
Net deferred tax liabilities | $ | 421,115 |  |  | $ | 393,469 |
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carry back and carry forward periods), projected future taxable income and tax-planning strategies in making this assessment. As of December 28, 2025, the Company believes it has sufficient positive evidence to conclude that realization of its federal, state and foreign net deferred tax assets are more likely than not to be realized. As of December 28, 2025, the Company’s valuation allowance is $85.9 million, of which $14.7 million relates to our Europe operations, $0.2 million relates to our Mexico operations, $47.0 million relates to Onix Investments UK Limited, Sandstone Holdings Sàrl and Arkose Investments ULC, indirect subsidiaries of Pilgrim’s, $12.1 million relates to our Puerto Rico operations, $11.7 million relates to U.S. foreign tax credits and $0.2 million relates to state net operating losses.
| Beginning Balance |  | Additions |  | Deductions |  | Ending Balance
| (In thousands)
Valuation allowance |  |  |  |  |  |  |
2025 | $ | 86,257 |  |  | $ | 4,470 |  |  | $ | (4,852) |  |  | $ | 85,875 |
2024 | 88,460 |  |  | 637 |  |  | (2,840) |  |  | 86,257 |
2023 | 64,361 |  |  | 25,296 |  |  | (1,197) |  |  | 88,460 |
As of December 28, 2025, the Company had federal and state net operating loss carry forwards of approximately $17.8 million that begin to expire in 2026. The Company also had Mexico net operating loss carry forwards as of December 28, 2025 of approximately $9.7 million that begin to expire in 2029. The Company also had U.K. net operating loss carry forwards as of December 28, 2025 of approximately $242.4 million that may be carried forward indefinitely. As of December 28, 2025, the Company had approximately $1.6 million of state tax credit carry forwards that begin to expire in 2026. For the years ended December 28, 2025 and December 29, 2024, there is a tax effect of $0.4 million and $(9.4) million, respectively, reflected in other comprehensive loss. For the years ended December 28, 2025 and December 29, 2024, there are immaterial tax effects reflected in income tax expense due to excess tax benefits and shortfalls related to stock-based compensation. See “Note 1. Business and Summary of Significant Accounting Policies” for additional information. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
| December 28, 2025 |  | December 29, 2024
| (In thousands)
Unrecognized tax benefits, beginning of year | $ | 28,969 |  |  | $ | 37,565 |
Increase as a result of tax positions taken during prior years | 2,831 |  |  | — |
Decrease for lapse in statute of limitations | (74) |  |  | (8,300) |
Decrease for tax positions of prior years | (65) |  |  | (296) |
Unrecognized tax benefits, end of year | $ | 31,661 |  |  | $ | 28,969 |
Included in unrecognized tax benefits of $31.7 million as of December 28, 2025, was $17.8 million of tax benefits that, if recognized, would reduce the Company’s effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. As of December 28, 2025, the Company had recorded a liability of $8.9 million for interest and penalties. During 2025, accrued interest and penalty amounts related to uncertain tax positions increased by $1.4 million. The Company operates in the U.S. (including multiple state jurisdictions), Puerto Rico and several foreign locations including Mexico, the U.K., and the Republic of Ireland. With few exceptions, the Company is no longer subject to examinations by taxing authorities for years prior to 2020 in U.S. federal, state and local jurisdictions, for years prior to 2010 in Mexico, and for years prior to 2017 in the U.K.

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