Smithfield Foods(SFD) - 2025 Q3 - Quarterly Results

Financial Performance - Net sales for Q3 2025 reached $3.7 billion, a 12.4% increase from Q3 2024[5] - Operating profit for Q3 2025 was $310 million, with an operating margin of 8.3%[5] - Year-to-date net sales for the first nine months of fiscal 2025 totaled $11.3 billion, up 10.9% from the same period in 2024[5] - For the three months ended September 28, 2025, sales increased to $3,747 million, up from $3,334 million for the same period in 2024, representing a growth of 12.4%[26] - Gross profit for the nine months ended September 28, 2025, was $1,487 million, compared to $1,364 million for the same period in 2024, reflecting an increase of 9.0%[26] - Net income from continuing operations attributable to Smithfield for the nine months ended September 28, 2025, was $660 million, up from $572 million in the same period of 2024, marking a growth of 15.4%[26] - Net income from continuing operations attributable to Smithfield for the three months ended September 28, 2025, was $248 million, compared to $202 million for the same period in 2024, representing a 22.8% increase[32] - Adjusted net income from continuing operations attributable to Smithfield for the nine months ended September 28, 2025, was $674 million, up from $518 million in the same period of 2024, reflecting a 30.2% growth[32] - Adjusted EBITDA from continuing operations for the twelve months ended September 28, 2025, was $1,577 million, compared to $1,379 million for the same period in 2024, indicating a 14.4% increase[35] Segment Performance - Packaged Meats segment generated an operating profit of $226 million, representing a margin of 10.8%[5] - Fresh Pork segment showed an operating profit of $10 million, with a margin of 0.5%[41] - Hog Production segment generated an operating profit of $89 million, with a margin of 10.9%[41] - For the nine months ended September 28, 2025, the consolidated operating profit was $892 million, with an operating profit margin of 7.9%[43] - Packaged Meats segment for the nine months reported an operating profit of $792 million, with a margin of 12.8%[43] - Fresh Pork segment for the nine months had an operating profit of $127 million, with a margin of 2.0%[43] - Hog Production segment reported an operating loss of $112 million for the nine months[43] - Adjusted operating profit for the nine months was $934 million, with an adjusted operating profit margin of 8.3%[43] Liquidity and Capital Structure - As of September 28, 2025, the company had $3,069 million in available liquidity, including $773 million in cash[8] - The ratio of net debt to adjusted EBITDA from continuing operations was 0.8x as of September 28, 2025[8] - Net debt as of September 28, 2025, was $1,231 million, an increase from $1,059 million as of December 29, 2024[39] - The ratio of total debt and finance lease obligations to net income from continuing operations improved to 2.3x for the twelve months ended September 28, 2025, down from 2.5x in the previous year[39] Dividends and Shareholder Equity - The company plans to maintain quarterly dividends of $0.25 per share, resulting in an annual dividend rate of $1.00 per share[9] - The company anticipates an annual dividend payment of $1.00 per share in 2025[21] - The company’s total shareholders' equity increased to $6,466 million as of September 28, 2025, compared to $5,834 million as of December 29, 2024[28] Expenses and Charges - The company recognized $73 million in litigation charges for the nine months ended September 28, 2025, impacting SG&A expenses[32] - Employee retention tax credits recognized under the CARES Act amounted to $10 million for the nine months ended September 28, 2025, affecting cost of sales[35] Capital Expenditures and Cash Flow - Capital expenditures for the nine months ended September 28, 2025, were $246 million, slightly down from $268 million in the same period of 2024[30] - The company reported a net cash flow from operating activities of continuing operations of $121 million for the nine months ended September 28, 2025, compared to $233 million for the same period in 2024[30] Tax and Regulatory Matters - The company reaffirmed an effective tax rate of between 23.0% and 25.0% for fiscal 2025[15] - The company is focused on optimizing the size of its hog production operations and navigating geopolitical risks, including increased tariffs on exports[23]