Smithfield Foods(SFD) - 2025 Q1 - Quarterly Results

Financial Performance - Smithfield Foods reported net sales of $3.8 billion for the first quarter of fiscal 2025, an increase of$ 327 million or 9.5% compared to the same period in 2024[4]. - Operating profit reached $321 million, up$ 158 million or 97% year-over-year, with an operating margin of 8.5%, compared to 4.7% in Q1 2024[4][6]. - Adjusted operating profit was $326 million, reflecting an increase of$ 150 million or 86% from the first quarter of 2024, with an adjusted operating margin of 8.6%[4][6]. - The Hog Production segment saw a significant increase in sales, rising by $226 million or 32.0% to$ 932 million compared to Q1 2024[5]. - Packaged Meats operating profit was $266 million, with an operating profit margin of 13.1%[4][6]. - Sales for the three months ended March 30, 2025, increased to$ 3,771 million, up from $3,444 million for the same period in 2024, representing a growth of 9.5%[23]. - Net income from continuing operations attributable to Smithfield for the three months ended March 30, 2025, was$ 224 million, compared to $114 million for the same period in 2024, reflecting a 96.5% increase[29]. - Adjusted EBITDA from continuing operations for the three months ended March 30, 2025, was$ 396 million, compared to $261 million for the same period in 2024, indicating a growth of 51.8%[32]. - The net income margin from continuing operations improved to 6.0% for the three months ended March 30, 2025, compared to 3.3% for the same period in 2024[32]. - Net income from continuing operations increased to$ 912 million for the twelve months ended March 30, 2025, compared to $798 million for the previous year, representing a growth of 14.3%[35]. - Adjusted EBITDA from continuing operations rose to$ 1,514 million, up from $1,379 million, reflecting an increase of 9.8% year-over-year[35]. Financial Position - The company maintains a strong financial position with$ 3,230 million in available liquidity, including $928 million in cash and cash equivalents[7]. - The net debt to Adjusted EBITDA ratio stands at 0.7x as of March 30, 2025, indicating a solid leverage position[7]. - Total current assets increased to$ 4,334 million as of March 30, 2025, from $4,202 million as of December 29, 2024, marking a rise of 3.1%[25]. - Total liabilities decreased to$ 4,921 million as of March 30, 2025, from $4,934 million as of December 29, 2024, showing a reduction of 0.3%[25]. - Cash and cash equivalents at the end of the period were$ 928 million, down from $943 million at the beginning of the period, a decrease of 1.6%[27]. - The ratio of total debt and finance lease obligations to net income from continuing operations improved to 2.2x, down from 2.5x[35]. - The ratio of net debt to adjusted EBITDA from continuing operations decreased to 0.7x, compared to 0.8x in the prior year[35]. Future Projections - Smithfield anticipates total company sales to increase in the low-to-mid-single-digit percent range compared to fiscal year 2024[13]. - The company projects adjusted operating profit for the Packaged Meats segment to be between$ 1,050 million to $1,150 million for fiscal 2025[13]. - An annual dividend rate of$ 1.00 per share is expected for fiscal 2025, with quarterly dividends of $0.25 per share[8]. Operational Changes - The company undertook a workforce reduction initiative, resulting in a total severance cost of approximately$ 9 million[29]. - The company reported a reduction in workforce resulting in a cost saving of $9 million during the quarter[38]. - The company incurred$ 6 million in insurance recoveries, impacting the overall financial results positively[38]. - The Hog Production Reform initiative contributed an additional $1 million to the operating profit for the quarter[38]. - The company is focusing on market expansion and new product development to drive future growth[36].