Smithfield Foods — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated sales for the third quarter of fiscal 2026 were $3.4 billion, a decrease of 8.3% compared to the third quarter of fiscal 2025.
• Operating profit for the third quarter was $127 million, down from $310 million in the prior year quarter; adjusted operating profit was $145 million.
• Consolidated operating profit margin was 3.7% in the third quarter of 2026, compared to 8.3% in the prior year; adjusted operating profit margin was 4.2%.
• Diluted earnings per share (EPS) were $0.23 for the third quarter of 2026, compared to $0.63 in the prior year; adjusted diluted EPS was $0.26.
• For the first nine months of fiscal 2026, consolidated sales were $10.9 billion, down 3.2% year-over-year.
• Operating profit for the first nine months was $750 million, compared to $892 million in the prior year; adjusted operating profit was $783 million.
• Diluted EPS for the first nine months was $1.45, compared to $1.68 in the prior year; adjusted diluted EPS was $1.52.
• Net cash flows from operating activities for the first nine months were $365 million, an increase of $244 million from the prior year period.
• As of September 27, 2026, available liquidity was $3,481 million, consisting of $1,178 million in cash and cash equivalents and $2,303 million in availability under committed credit facilities.
• The ratio of net debt to adjusted EBITDA on a trailing twelve-month basis was 0.5x.

Guidance and Future Outlook:

• Total company sales for fiscal 2026 are expected to be down low-single-digits compared to fiscal 2025.
• Packaged Meats segment adjusted operating profit is projected to range from $1,090 million to $1,140 million.
• Fresh Pork segment adjusted operating results are projected to range from a loss of $50 million to breakeven.
• Hog Production segment adjusted operating results are projected to range from a loss of $25 million to a profit of $25 million.
• Total company adjusted operating profit is projected to range from $900 million to $1,000 million.
• Capital expenditures for fiscal 2026 are expected to be between $350 million and $375 million, excluding investments in the proposed Sioux Falls processing facility.
• The effective tax rate for fiscal 2026 is projected to be between 22.5% and 24.5%.
• The fiscal 2026 outlook includes 53 weeks of results and approximately two months of results for Nathan's Famous following the October 26, 2026 acquisition close.

Business Segments and Product Lines:

• Packaged Meats operating profit for the third quarter was $230 million, up from $226 million in the prior year, with an operating profit margin of 11.6% compared to 10.8%.
• Fresh Pork operating profit for the third quarter was a loss of $89 million, compared to a profit of $10 million in the prior year, with an operating profit margin of (4.9)% versus 0.5%.
• Hog Production operating profit for the third quarter was $34 million, down from $89 million in the prior year, with an operating profit margin of 5.0% compared to 10.9%.
• Packaged Meats sales for the third quarter were $1,982 million, down 5.2% from the prior year.
• Fresh Pork sales for the third quarter were $1,814 million, down 17.0% from the prior year.
• Hog Production sales for the third quarter were $691 million, down 15.0% from the prior year.
• The company completed the acquisition of Nathan's Famous, bolstering its Packaged Meats brand portfolio.
• Packaged Meats is on track to deliver its fifth consecutive year above $1 billion in operating profit in fiscal 2026.

Market and Competitive Landscape:

• Upstream segments (Fresh Pork and Hog Production) were challenged by lower pork commodity markets.
• The company expects commodity market pressure in upstream businesses to continue in the fourth quarter.
• Macroeconomic challenges include softer fresh pork and hog commodity markets.

Risks and Challenges:

• Cyclical nature of operations and fluctuations in commodity prices.
• Dependence on third-party suppliers.
• Ability to execute on strategy to optimize the size of hog production operations.
• Geopolitical risks including increased tariffs on exports.
• Higher input costs and ability to mitigate them through productivity improvements.
• Ability to compete successfully in the food industry and anticipate consumer trends.
• Compliance with laws and regulations, including environmental, cybersecurity, and tax laws.
• Litigation risks and cybersecurity threats.
• Status as a "controlled company" and potential conflicts of interest.

Management Commentary and Tone:

• CEO Shane Smith stated that adjusted operating profit was within the range provided in September, led by strong Packaged Meats results.
• Management emphasized operational discipline to navigate the environment of commodity market pressure.
• The company highlighted a strong balance sheet and solid cash generation supporting dividend payments and reinvestment.
• Management expressed confidence in the company's ability to create shareholder value and position for long-term growth.

Other Key Points:

• The company paid dividends of $0.3125 per share on April 21, May 28, and August 27, 2026.
• A remaining quarterly dividend of $0.3125 per share is anticipated for fiscal 2026, resulting in an annual dividend rate of $1.25 per share.
• The fiscal 2026 outlook excludes the impact of the investment in the new processing facility in Sioux Falls, South Dakota.
• Non-GAAP measures used include adjusted operating profit, adjusted EBITDA, and net debt to adjusted EBITDA ratio.