Financial Data and Key Metrics Changes - In 2025, adjusted operating profit increased by 30% to $1.3 billion, with profit margin expanding to 8.6%, up from 7.2% in 2024 [9][24] - Fourth quarter adjusted net income from continuing operations was $329 million, contributing to a record full year net income of $1 billion [24][25] - Adjusted diluted EPS for the fourth quarter was $0.83 per share, up from $0.52 per share in 2024, and for the full year was $2.55 per share, representing a 36% increase from 2024 [25] Business Line Data and Key Metrics Changes - Packaged Meats segment delivered fiscal year 2025 adjusted operating profitability despite raw material input cost increases of $525 million, with sales of $8.8 billion, a 5.3% increase compared to fiscal 2024 [25][26] - Fresh Pork segment achieved $209 million in adjusted operating profit, with sales of $8.3 billion, a 6% increase year-over-year, driven by a 5.8% increase in average selling price [27] - Hog Production generated $176 million in adjusted operating profit, the highest since 2014, with sales of $3.4 billion, a 13% increase year-over-year [27][28] Market Data and Key Metrics Changes - The company produced 11.1 million hogs in 2025, down from 14.6 million in 2024, reflecting a strategic rightsizing [20] - The average market hog sales price increased by 8.9% year-over-year, despite a reduction in the number of hogs produced [28] Company Strategy and Development Direction - The company aims to increase packaged meats profit through mix improvement, volume growth, and innovation, focusing on higher-margin, value-added product categories [12][13] - A new state-of-the-art processing facility is planned in Sioux Falls, South Dakota, with an estimated investment of $1.3 billion over three years, expected to modernize manufacturing and unlock long-term cost benefits [11][34] - The acquisition of Nathan's Famous is anticipated to be immediately accretive and will secure a core national brand, creating growth and synergy opportunities [10][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued margin expansion driven by strategies such as innovation, improved asset utilization, and cost savings [32] - The outlook for 2026 anticipates total company sales to increase by low single digits, with segment adjusted operating profit for packaged meats expected in the range of $1.1 billion to $1.2 billion [33] - Potential headwinds include cautious consumer spending and geopolitical dynamics, particularly related to the conflict in Iran affecting fuel and raw material costs [31][32] Other Important Information - The company returned value to shareholders through dividend payments of $1 per share in 2025, with an anticipated increase to $1.25 per share in 2026 [10][30] - The company maintains a strong financial position with a net debt to adjusted EBITDA ratio of 0.3 times and liquidity of $3.8 billion [29] Q&A Session Summary Question: Packaged meats outlook and margin perspective - Analyst inquired about the packaged meats outlook and margin expansion in light of input cost inflation and consumer demand [36][38] - Management noted that low single-digit revenue growth includes one-time inventory sales and expects lower raw material costs but still elevated compared to historical norms [39][40] Question: Hog production guidance and industry perspective - Analyst asked about the hog production guidance and industry supply dynamics [45] - Management confirmed that guidance reflects current market conditions and improvements in genetics and feed management [46][48] Question: Fresh pork segment risks and opportunities - Analyst requested elaboration on fresh pork business risks and opportunities for 2026 [51] - Management highlighted the focus on value-added products and the importance of connecting fresh pork with the packaged meats portfolio [56][57] Question: Capacity expansion project in Sioux Falls - Analyst inquired about the capital expenditure needs for the Sioux Falls project [58] - Management clarified that significant spending will occur in 2027 and 2028, with groundbreaking expected in early 2027 [59] Question: Margin cadence in packaged meats - Analyst sought clarity on margin cadence in the packaged meats segment [62] - Management emphasized a focus on quality merchandising and consumer loyalty, with expectations of consistent profitability throughout the year [64][66]

Financial Data and Key Metrics Changes - In 2025, adjusted operating profit increased by 30% to $1.3 billion, with profit margin expanding to 8.6%, up from 7.2% in 2024 [9][24] - Fourth quarter adjusted net income from continuing operations was $329 million, contributing to a record full year net income of $1 billion [24][25] - Adjusted diluted EPS for the fourth quarter was $0.83 per share, up from $0.52 per share in 2024, and for the full year was $2.55 per share, representing a 36% increase from 2024 [25] Business Line Data and Key Metrics Changes - Packaged Meats segment achieved adjusted operating profitability despite $525 million in raw material cost increases, with sales of $8.8 billion, a 5.3% increase compared to fiscal 2024 [25][26] - Fresh Pork segment delivered $209 million in adjusted operating profit, with sales of $8.3 billion, a 6% increase year-over-year, driven by a 5.8% increase in average selling price [27] - Hog Production generated $176 million in adjusted operating profit, the highest since 2014, with sales of $3.4 billion, a 13% increase year-over-year [27][28] Market Data and Key Metrics Changes - The company produced 11.1 million hogs in 2025, down from 14.6 million in 2024, reflecting a strategic rightsizing [20] - The company anticipates a 2.5% increase in pork production in 2026, with potential headwinds from PRRS affecting supply [31][76] Company Strategy and Development Direction - The company aims to increase packaged meats profit through mix improvement, volume growth, and innovation, while also focusing on maximizing net realizable value in fresh pork [12][19] - A significant investment of up to $1.3 billion is planned for a new processing facility in Sioux Falls, South Dakota, expected to modernize operations and enhance efficiency [11][34] - The acquisition of Nathan's Famous is expected to be immediately accretive and will secure a core national brand, creating growth and synergy opportunities [10][81] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued margin expansion and profitability in 2026, driven by strong protein demand and disciplined cost management [12][31] - The company is monitoring geopolitical factors, particularly the conflict in Iran, which could impact fuel and raw material costs [32][68] - Management highlighted the importance of innovation and operational efficiencies in maintaining competitive advantage [22][23] Other Important Information - The company returned value to shareholders through dividend payments of $1 per share in 2025, with an anticipated increase to $1.25 per share in 2026 [10][30] - The company maintains a strong financial position with a net debt to adjusted EBITDA ratio of 0.3x and liquidity of $3.8 billion [29] Q&A Session Summary Question: Packaged meats outlook and margin perspective - The company expects low single-digit growth for packaged meats, with margin expansion anticipated despite input cost inflation [37][40] Question: Hog production guidance and industry perspective - Management indicated that the guidance for hog production reflects current supply conditions and improvements in genetics and feed management [45][48] Question: Fresh pork segment risks and opportunities - The fresh pork team is focusing on value-added products and leveraging the packaged meats brand to enhance profitability [55][56] Question: Sioux Falls capacity expansion project - Groundbreaking for the new facility is expected in early 2027, with significant capital expenditures anticipated during 2027 and 2028 [58][59]

Financial Data and Key Metrics Changes - In 2025, adjusted operating profit increased by 30% to $1.3 billion, with profit margin expanding to 8.6%, up from 7.2% in 2024 [8][24] - Total company sales increased by 10% for the year, with a 7% increase in the fourth quarter [23][28] - Adjusted net income for the full year reached $1 billion, with adjusted diluted EPS increasing by 36% to $2.55 per share [24][28] Business Line Data and Key Metrics Changes - Packaged Meats segment achieved sales of $8.8 billion, a 5.3% increase compared to 2024, despite raw material cost increases of $525 million [24][25] - Fresh Pork segment delivered $209 million in adjusted operating profit, with sales of $8.3 billion, a 6% year-over-year increase [26] - Hog Production generated $176 million in adjusted operating profit, the highest since 2014, with sales of $3.4 billion, reflecting a 13% increase year-over-year [26][27] Market Data and Key Metrics Changes - The company produced 11.1 million hogs in 2025, down from 14.6 million in 2024, as part of a rightsizing strategy [19] - The average market hog sales price increased by 8.9% year-over-year, despite a reduction in the number of hogs produced [27] Company Strategy and Development Direction - The company aims to grow packaged meats profit through mix improvement, volume growth, and innovation, focusing on higher-margin, value-added product categories [11][12] - A new state-of-the-art processing facility is planned for Sioux Falls, South Dakota, with an estimated investment of $1.3 billion over three years, expected to modernize manufacturing and unlock long-term efficiencies [10][33] - The acquisition of Nathan's Famous is anticipated to be immediately accretive and will secure a core national brand, creating growth and synergy opportunities [9][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued protein demand and the favorable positioning of pork as a healthy, affordable option for consumers [10][30] - The company expects continued margin expansion in 2026, driven by disciplined cost management and execution of core strategies [30][32] - Potential headwinds include cautious consumer spending and geopolitical factors affecting input costs [31] Other Important Information - The company returned value to shareholders through a $1 per share dividend in 2025 and anticipates an annual dividend of $1.25 in 2026 [9][29] - The net debt to adjusted EBITDA ratio was 0.3 times at the end of 2025, indicating a strong financial position [28] Q&A Session Summary Question: Packaged meats outlook and margin perspective - Management noted that low single-digit revenue growth includes one-time inventory sales and expects input costs to remain elevated but manageable [38][39] Question: Hog production guidance and industry perspective - Management indicated that supply expansion is limited, and they are comfortable with the guidance provided, reflecting structural improvements in their operations [44][46] Question: Fresh pork segment risks and opportunities - Management highlighted the focus on value-added products and the importance of connecting the fresh pork business with the packaged meats portfolio for improved results [50][54] Question: Capacity expansion project in Sioux Falls - Management confirmed that significant capital expenditures for the Sioux Falls project will occur in 2027 and 2028, with expected efficiency gains from the new facility [56][57] Question: Nathan's Famous acquisition benefits - Management stated that the acquisition will eliminate licensing fees and provide immediate earnings growth, with more details to be shared post-close [78][80]

March 24, 2026 Smithfield Foods Fourth Quarter Fiscal 2025 Legal Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this presentation, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management, and expected market growth, are forwa ...

Core Insights - Smithfield Foods anticipates a slowdown in sales growth for the upcoming fiscal year, projecting low-single-digit growth despite an extra reporting week [2] - The company reported net sales of $15.5 billion for the year ending December 28, marking a 9.8% increase [1] Sales and Profit Outlook - For the 2026 financial year, Smithfield expects adjusted operating profit to range between $1.33 billion and $1.48 billion, following a 30.5% increase to $1.34 billion last year [3] - The packaged meats segment is projected to generate an adjusted operating profit of $1.1 billion to $1.2 billion, surpassing the previous year's $1.09 billion [3] Strategic Investments and Growth Plans - The company is investing $1.3 billion over three years in a new processing facility in Sioux Falls, South Dakota, while also planning to close a dry sausage plant in Springfield, Massachusetts [4] - Smithfield aims to enhance sales and profitability through its flagship packaged meats segment and brand portfolio, emphasizing a culture of continuous improvement [4] Segment Performance - Packaged meats sales increased by 5.3% to $8.71 billion, while fresh pork sales rose 6% to $8.34 billion [5] - Hog production sales grew by 13% to $3.39 billion, with adjusted operating profit expectations set at $200 million to $260 million, down from $209 million last year [5] Financial Performance - Net income from continuing operations increased by 25% to $998 million, with diluted EPS climbing nearly 22% to $2.51 [6] - Hog production is expected to deliver adjusted operating profit between $150 million and $200 million, rebounding from a loss of $152 million in the previous year [6] Market Context - The company acknowledges significant market headwinds but attributes its record results to a diversified product portfolio and a vertically integrated model [7]

Core Insights - Smithfield Foods exceeded analysts' expectations for fourth-quarter sales and profit, driven by strong demand for packaged meats and effective cost-saving measures, resulting in a nearly 4% increase in shares during premarket trading [1] Sales Performance - The company's sales rose 7% to $4.23 billion during the quarter, surpassing analysts' expectations of $4.14 billion [3] - Packaged meat sales increased by 4.3% year-over-year, while fresh pork sales grew by 2.1% [3] Market Trends - More U.S. consumers are choosing to cook at home rather than dine out due to high living costs, which has positively impacted sales for Smithfield [2] - Demand for protein-rich staples, particularly during the holiday season, has contributed to increased sales volumes despite overall pressure on household spending [2] Future Outlook - The company aims to grow sales and profitability by 2026, focusing on its flagship Packaged Meats segment and brand portfolio [4] - Smithfield anticipates total annual sales growth in the low single digits, slightly below analysts' estimates of 1.26% [5] - The adjusted profit from continuing operations was reported at 83 cents per share, exceeding analysts' expectations of 68 cents per share [5]

Core Insights - Smithfield Foods, Inc. reported strong financial results for fiscal year 2025, achieving record profits and setting a foundation for future growth despite market challenges [4][6][7]. Full Year Fiscal 2025 Financial Highlights - Net sales reached $15.5 billion, an increase of 9.8% from fiscal year 2024 [6]. - Operating profit was $1.292 billion, up 15.6% from the previous year, with an adjusted operating profit of $1.336 billion, reflecting a 30.5% increase [6]. - The operating margin was 8.3%, with an adjusted operating margin of 8.6% [6]. - Diluted earnings per share from continuing operations attributable to Smithfield were $2.51, with adjusted diluted earnings per share at $2.55 [6]. Fourth Quarter Fiscal 2025 Financial Highlights - Net sales for the fourth quarter were $4.2 billion, a 7.0% increase from the fourth quarter of 2024 [6]. - Operating profit for the quarter was $400 million, up 19.6% year-over-year, with an adjusted operating profit of $402 million, reflecting a 27.8% increase [6]. - The operating margin and adjusted operating margin for the quarter were both 9.5% [6]. CEO Perspective - The CEO emphasized the company's diversified product portfolio and operational excellence as key drivers of record results, aiming for continued sales and profitability growth in 2026 [4][6]. Business Highlights - Achieved an annual operating profit of $1.3 billion, marking the second consecutive year of record operating profit [6]. - The Packaged Meats segment maintained an operating profit above $1 billion for the fourth consecutive year [6]. - The company announced a dividend increase to $1.25 per share for 2026 [6]. Segment Performance - Packaged Meats segment sales were $8.757 billion, up 5.3% from the previous year, with an operating profit of $1.094 billion [10]. - Fresh Pork segment sales increased to $8.344 billion, a 6.0% rise, with an operating profit of $214 million [10]. - Hog Production segment sales rose to $3.393 billion, a 13.0% increase, with an operating profit of $176 million [10]. Financial Position - As of December 28, 2025, the company had $3.837 billion in available liquidity, including $1.539 billion in cash and cash equivalents [13]. - The net debt to adjusted EBITDA ratio was 0.3x, indicating a strong financial position [13]. FY 2026 Outlook - The company anticipates low-single-digit sales growth compared to fiscal year 2025, with adjusted operating profit expectations for the Packaged Meats segment between $1.1 billion and $1.2 billion [19]. - Capital expenditures are projected to be between $350 million and $450 million [19].

Group 1: Company Developments - Smithfield Foods, Inc. has initiated the approval process to build a new state-of-the-art packaged meats and fresh pork processing facility in Sioux Falls, South Dakota, which will replace the existing plant [2] - The proposed facility will be located in Foundation Park, a 1,000+-acre heavy industrial park, and is expected to support the local economy by maintaining 3,200 jobs and contributing approximately $200 million in annual wages [2] - Smithfield Foods has entered into a definitive merger agreement to acquire Nathan's Famous for $102.00 per share in cash, with an enterprise value of approximately $450 million, expected to close in the first half of 2026 [3] Group 2: Financial Implications - The acquisition of Nathan's Famous values the company at approximately 12.4x LTM adjusted EBITDA and about 10.0x post-synergies, with expected annual cost synergies of approximately $9 million by the second anniversary of closing [3] - The deal is anticipated to be immediately accretive to adjusted diluted EPS from continuing operations attributable to Smithfield, funded with cash on hand and not subject to financing contingencies [3] Group 3: Industry Position - Smithfield Foods operates in the packaged meats and fresh pork production sector, serving both retail and foodservice customers in the United States and internationally [4]

Core Viewpoint - Smithfield Foods, Inc. is initiating the approval process for a new state-of-the-art packaged meats and fresh pork processing facility in Sioux Falls, South Dakota, representing a significant investment in American agriculture [1][4]. Investment Details - The proposed investment is estimated to be up to $1.3 billion over the next three years, contingent on securing necessary permits and regulatory approvals [4]. - The new facility will replace Smithfield's existing plant, which has been operational for over 100 years and currently employs 3,200 people, contributing $200 million in wages annually [1][4]. Facility Features - The new facility will be the most modern of its kind in the U.S., featuring highly efficient process flow, advanced automation technology, and a streamlined design, aimed at enhancing efficiency in fresh pork and high-value packaged meats operations [5]. Community and Economic Impact - The facility is expected to support independent hog farmers, corn and soybean producers, and other agricultural sectors in South Dakota, thereby strengthening the local economy [6]. - Local officials, including South Dakota Governor Larry Rhoden and Sioux Falls Mayor Paul TenHaken, have expressed that this investment will revitalize the downtown area and create significant job opportunities [7]. Timeline - Site work for the new facility is expected to begin in spring 2026, with initial groundbreaking anticipated in the first half of 2027, and production expected to commence by the end of 2028 [7].

Core Insights - Smithfield Foods has launched its 2026 Impact Grant Program aimed at supporting local nonprofit organizations that align with the company's philanthropic focus areas [1][3] - The program will award grants of $10,000 or more through a competitive application process, evaluating proposals based on need, potential impact, and alignment with four focus areas: hunger relief, education, hometown heroes, and community vitality [3] Financial Commitment - In 2024, Smithfield invested over $32 million to support local communities, which included more than 25 million servings of protein donated to those experiencing food insecurity [4] Application Details - Eligible nonprofit organizations can apply for the grants until February 6, 2026, at 11:59 p.m. EST [4]