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SMITHFIELD FOODS INC (SFD)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 FY2025 delivered record adjusted operating profit of $298M (up 20% YoY) and adjusted operating margin of 7.9%, with consolidated net sales of $3.79B (+11% YoY), driven by strength across Packaged Meats, Fresh Pork, and Hog Production .
  • Versus consensus, Smithfield posted a revenue beat ($3.79B vs $3.62B) and an EBITDA beat ($381M vs $366M), while EPS was in line at $0.55; estimates context from S&P Global shown below with asterisks*.
  • Guidance raised: Total Company adjusted operating profit to $1.15–$1.35B (from $1.10–$1.30B) and Hog Production adjusted operating profit to $0–$100M (from −$50–$50M); other FY2025 guide items reaffirmed .
  • Stock reaction catalysts: improved Hog Production outlook (despite a $15M mark-to-market drag in Q2), formula-based pricing/private label resilience amid raw material inflation, and demonstrated tariff agility, including resumption of shipments to China .

What Went Well and What Went Wrong

What Went Well

  • Record adjusted operating profit of $298M and adjusted margin of 7.9%; CEO: “record second quarter adjusted operating profit… 7.9%” underscoring resilient execution amid macro/tariff volatility .
  • Packaged Meats posted $296M adjusted operating profit (14.2% margin), with strong volume/price mix and private label formula pricing mitigating raw material inflation; CFO cited bellies +24% YoY and trim +10–14% YoY with mix shift to lunch meat/dry sausage .
  • Hog Production swung to $22M adjusted operating profit vs prior-year loss, supported by improved markets, efficiency initiatives (genetics, health, nutrition) and raised full-year outlook; management “leans towards the higher end” of the guide .

What Went Wrong

  • GAAP operating profit declined YoY to $260M from $334M, reflecting litigation charges and unallocated items; GAAP EPS from continuing ops fell to $0.48 from $0.67, though adjusted EPS rose to $0.55 .
  • Raw material inflation pressured Packaged Meats margins (bellies +24%, trim +10–14%); management expects some seasonal margin compression in Q3 before holiday ham seasonality benefits Q4 .
  • Hog Production reported approximately $15M mark-to-market loss on derivatives impacting Q2, though positions are expected to materialize in the back half; hedging mechanics (non-OCI) pulled losses forward .

Financial Results

Quarterly Performance vs Prior Periods

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$3.951 $3.771 $3.786
Diluted EPS - Continuing Ops ($)$0.56 $0.57 $0.48
Adjusted Diluted EPS ($)$0.52 $0.58 $0.55
Operating Margin (%)8.5% 8.5% 6.9%
Adjusted Operating Margin (%)8.0% 8.6% 7.9%
Adjusted EBITDA Margin (%)10.2% 10.5% 10.1%

Q2 Year-over-Year Comparison

MetricQ2 2024Q2 2025
Revenue ($USD Billions)$3.412 $3.786
Operating Profit ($USD Millions)$334 $260
Adjusted Operating Profit ($USD Millions)$248 $298
Operating Margin (%)9.8% 6.9%
Adjusted Operating Margin (%)7.3% 7.9%
Diluted EPS - Continuing Ops ($)$0.67 $0.48
Adjusted Diluted EPS ($)$0.51 $0.55

Q2 Actual vs Wall Street Consensus (S&P Global)

MetricQ2 2025 ActualQ2 2025 Consensus
Revenue ($USD)$3,786,000,000 $3,619,056,010*
EBITDA ($USD)$381,000,000 $365,934,500*
Primary EPS ($)$0.55 0.55041*
EPS - # of Estimates—5*
Revenue - # of Estimates—3*

Values retrieved from S&P Global.*

Segment Sales (Q2)

Segment Sales ($USD Millions)Q2 2024Q2 2025
Packaged Meats$1,945 $2,079
Fresh Pork$1,981 $2,080
Hog Production$776 $840
Other$119 $120
Total Segment Sales$4,820 $5,120
Inter-segment Eliminations$(1,408) $(1,334)
Consolidated Sales$3,412 $3,786

Segment Operating Performance (Q2)

SegmentOperating Profit ($M) Q2’24Adjusted Operating Profit ($M) Q2’24Operating Profit ($M) Q2’25Adjusted Operating Profit ($M) Q2’25Adjusted Margin Q2’25
Packaged Meats$330 $292 $301 $296 14.2%
Fresh Pork$58 $17 $35 $30 1.4%
Hog Production$(2) $(10) $22 $22 2.6%
Consolidated$334 $248 $260 $298 7.9%

KPIs and Balance Sheet

KPIQ4 2024Q1 2025Q2 2025
Cash and Equivalents ($USD Millions)$943 $928 $928
Liquidity ($USD Millions)$3,245 $3,230 $3,225
Net Debt ($USD Millions)$1,059 $1,075 $1,075
Net Debt / Adj. EBITDA (x)0.8x 0.7x 0.7x
Capex ($USD Millions)$350 (FY) $79 (Q1) $158 (H1)
Dividend per Share$0.25 declared (Mar 24) $0.25 paid (Apr 22) $0.25 paid (May 29); $0.25 announced (Jul 31)
Diluted Shares (WA)380,069,232 389,064,212 393,751,294

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Company Sales GrowthFY2025Low-to-mid single-digit % Low-to-mid single-digit % Maintained
Packaged Meats Adj. Op ProfitFY2025$1,050–$1,150M $1,050–$1,150M Maintained
Fresh Pork Adj. Op ProfitFY2025$150–$250M $150–$250M Maintained
Hog Production Adj. Op ProfitFY2025−$50–$50M $0–$100M Raised
Total Company Adj. Op ProfitFY2025$1,100–$1,300M $1,150–$1,350M Raised
Capital ExpendituresFY2025$400–$500M $400–$500M Maintained
Effective Tax RateFY202523.0%–25.0% 23.0%–25.0% Maintained
DividendFY2025$1.00 annual expectation $1.00 annual expectation Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
Automation & efficiency>$3B CapEx since 2013; cost savings and automation expansion highlighted Continued benefits, redeploying labor, lowering manufacturing cost structure Strengthening
Tariffs/ChinaMonitoring fluid geopolitics; multi-channel outlet flexibility Navigated China tariff disruption, sold into alternatives, resumed shipments Stabilizing but fluid
Private label/formula pricingPrivate label strategic advantage Formula pricing mitigates inflation; ~40% retail business private label; resilience Rising importance
Raw material inflationBellies +15% in Q4; higher input costs Bellies +24%, trim +10–14%; margin management via mix/pricing Pressure elevated
Consumer demand/valueCautious consumer; trading down Continued caution; value/convenience focus Persistent
Hog production optimizationReduction to 11.5M; target ~30% internal supply Adjusted op profit +$22M; guide raised; genetics/health/nutrition initiatives Progressing
Regional/MexicoMexico strength in “Other” segment Other segment flat YoY at $7M adj OP Stable
Litigation/non-GAAP adjustmentsLarge adjustments in FY2024 Q2 litigation charges ($73M) and insurance recoveries impacted GAAP Transitory items impacting GAAP

Management Commentary

  • CEO: “We delivered record second quarter adjusted operating profit of $298,000,000… adjusted operating profit margin of 7.9%… demonstrating the resilience of our business model as [we] navigated a dynamic consumer spending and geopolitical environment.”
  • CEO: “We navigated the China tariff disruption, minimizing the impact by selling into alternative countries and channels and subsequently resuming shipments to China.”
  • CFO: “Consolidated sales in the second quarter were $3,800,000,000 representing an 11%… increase… record second quarter adjusted operating profit of $298,000,000… adjusted EPS was $0.55.”
  • Packaged Meats President: “We increased feature and display activity by 200 bps vs last year… maximizing ROI of trade spend… driving industry-leading profit margin of 14.2%.”
  • CEO: “Automation has enabled us to redeploy labor… and reduce our overall labor count helping to offset inflationary pressures.”

Q&A Highlights

  • Private label and consumer mix: Circana data showed Q2 volume share up 60 bps; private label growth elevating quality, with Smithfield advantaged as premier supplier; emphasis on feature/display (+200 bps) over deep discounting .
  • Hog Production outlook and hedging: ~$15M mark-to-market drag in Q2 from positions expected to materialize in H2; hedging mix includes instruments not qualifying for hedge accounting; guidance “leans towards the higher end” given futures curve .
  • Seasonality: Q3 typically softer than Q4 due to holiday ham seasonality; formula pricing mechanisms help pass through raw material costs over time .
  • Fresh Pork margin dynamics: Expect seasonal compression in spreads in Q2/Q3; mitigating via cost structure improvements and value-added product mix .
  • Volume trajectory: Packaged Meats full-year volume expected up ~1% ex-seasonal hams, supported by innovation and foodservice growth (e.g., ready-to-eat roasted bacon) .

Estimates Context

  • Q2 FY2025 results compared favorably to consensus on revenue and EBITDA and were in line on EPS: revenue $3.786B vs $3.619B*, EBITDA $381M vs $366M*, EPS $0.55 vs $0.5504* .
  • Estimate breadth: 5 EPS and 3 revenue estimates for Q2*; implications include likely upward adjustments to Hog Production segment contribution and confirmation of packaged meats margin resilience despite input inflation.
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Beat-and-raise quarter: Revenue and EBITDA beats, with raised FY2025 total Company and Hog Production adjusted operating profit guidance; positive estimate revision risk.
  • Packaged Meats durability: 14.2% adjusted margin despite input inflation; formula pricing/private label scale and mix shift to higher-margin SKUs underpin profitability .
  • Tariff agility: Demonstrated ability to re-route exports and resume shipments to China; Fresh Pork profitability improved YoY despite compressed spreads .
  • Hog Production inflection: Profit swing and higher-end guidance bias, even after a $15M mark-to-market headwind; efficiency programs (genetics/health/nutrition) provide structural support .
  • Balance sheet strength: Net debt/Adj. EBITDA 0.7x, liquidity ~$3.23B, supporting continued investment (automation/capacity) and $1.00/share annual dividend expectation .
  • Near-term trading lens: Expect Q3 seasonality and raw material cost pressures, but Q4 holiday ham seasonality and mix/feature strategies should support margin trajectory .
  • Medium-term thesis: Continued margin expansion via automation, capacity in high-margin categories, and private label partnerships; tariff/macro volatility likely manageable via multi-channel flexibility .

Source Documents

  • Q2 FY2025 8-K press release and financials:
  • Q2 FY2025 earnings call transcript:
  • Q1 FY2025 press release and 8-K:
  • Q4 FY2024 press release and 8-K: