Pilgrim's Pride Corp.'s second-quarter profit rose sharply, as the chicken producer slashed costs to offset a sales decline.

A bird flu outbreak in the U.S., the worst-ever bird-flu outbreak in the U.S. with more than 48 million birds affected, has hurt demand and triggered import bans abroad. Last month, Wayne Farms, one of the largest broiler chicken producer and processors in the U.S., called off plans to go public citing market conditions.

No human cases have been detected in the U.S., and the Centers for Disease Control and Prevention considers the risk low to human health, the U.S. Department of Agriculture has said.

Shares of Pilgrim's Pride, down nearly 39% this year, edged up 0.5% to $20.21 in late trading.

The chicken producer—a unit of Brazilian meat processor JBS SA and the second-largest poultry processor by sales in the U.S., behind Tyson Foods Inc.—operates chicken-processing plants and prepared-foods facilities in 12 states, Puerto Rico and Mexico.

Pilgrim's has pledged to eliminate antibiotics from a quarter of its chicken production by 2019, up from about 5% now, responding to consumer pressure to curb the use of drugs that have been widely fed to poultry and livestock since the 1950s.

Overall, for the 13-week-period ended June 28, Pilgrim's Pride reported a profit of $241.5 million, or 93 cents a share, up from $190.4 million, or 73 cents a share, a year earlier. Adjusting for currency fluctuations and other items, profit rose to 94 cents a share from 73 cents a share.

Revenue fell 6% to $2.05 billion.

Analysts surveyed by Thomson Reuters expected 89 cents and revenue of $2.22 billion.

Domestic sales, which account for the bulk of Pilgrim's business, fell 5% in the latest period, while sales in Mexico, one of the countries that have banned imports from states in the U.S. with confirmed commercial bird flu cases, fell nearly 14%.

Cost of sales were down almost 12% leading to improved gross margin of 21%, from 16% a year earlier.

Separately, the company said its board had authorized buying back up to $150 million in shares over the next 12 months, a move that could boost its stock value and drive up return to shareholders.

Write to Maria Armental at maria.armental@wsj.com

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