Key Highlights

  • Sales fell 8.3% to USD 3,437 million, and operating profit fell to USD 127 million from USD 310 million.
  • Net income attributable was USD 89 million, or USD 0.23 per diluted share, and adjusted EPS was USD 0.26.
  • Packaged Meats operating profit rose 1.9% to USD 230 million, while Fresh Pork lost USD 89 million.
  • Full-year adjusted operating profit guidance is USD 900 million to USD 1 billion, with sales now guided lower.

Pork Value Chain Weighs on Results

Smithfield Foods (NASDAQ:SFD) reported third quarter 2026 results on Tuesday. Sales were USD 3,437 million versus USD 3,747 million, down 8.3% on lower pork complex values. Gross profit fell to USD 313 million from USD 479 million. Operating profit was USD 127 million versus USD 310 million, and net income attributable to the company was USD 89 million, or USD 0.23 per diluted share, versus USD 248 million, or USD 0.63. Adjusted EBITDA was USD 227 million versus USD 398 million.

On the call, management reported adjusted operating profit of USD 145 million, a 4.2% margin versus USD 310 million and 8.3%, and adjusted EPS of USD 0.26 versus USD 0.58. President and Chief Executive Shane Smith attributed the decline to a sharp fall in the pork value chain from softer domestic demand and global oversupply. He cited pressured consumers, elevated diesel and resin costs, and weaker export opportunities in markets such as Mexico and China.

Segment Results

Packaged Meats sales fell 5.2% to about USD 2.0 billion as average selling prices fell 11.4% while volume rose 0.2%. Operating profit rose 1.9% to USD 230 million, and margin expanded 80 basis points to 11.6%. Management said e-commerce volume in the segment grew 22.5% against industry growth of 13.4%.

Fresh Pork sales fell 17% to USD 1.8 billion on lower pricing and a 6.3% volume decline, and the segment posted an operating loss of USD 89 million versus a USD 10 million profit as industry processing spreads fell 35% below last year. Hog Production sales fell 15% to USD 691 million, and operating profit fell to USD 34 million from USD 89 million.

Nine Months, Liquidity and Leverage

For the nine months, sales were USD 10,937 million versus USD 11,304 million, operating profit was USD 750 million versus USD 892 million, and net income attributable was USD 574 million, or USD 1.45 per diluted share, versus USD 660 million, or USD 1.68. Operating cash flow for the period was USD 365 million, up USD 244 million. Cash was USD 1.18 billion, liquidity was USD 3.5 billion, and net debt to adjusted EBITDA was 0.5 times against a policy limit of 2.0 times.

Guidance and Strategic Moves

Management now guides full-year sales down low single digits, revised from roughly flat, and adjusted operating profit to USD 900 million to USD 1 billion. Segment profit outlooks are USD 1.09 billion to USD 1.14 billion for Packaged Meats, a loss of USD 50 million to breakeven for Fresh Pork, and a loss of USD 25 million to a profit of USD 25 million for Hog Production. Capital expenditures are guided to USD 350 million to USD 375 million, excluding the proposed Sioux Falls facility, which faces a delay after a court reversed a conditional use permit.

The company completed its acquisition of Nathan's Famous on Oct. 26, which repatriates about USD 33 million of annual license costs. A new supply agreement with a joint venture partner reduces internal hog production by roughly 900,000 head per year. The annual dividend is USD 1.25 per share, with three quarterly payments of USD 0.3125 declared.

Pork Cycle Markers to Follow

Tracking points include Fresh Pork processing spreads relative to the 35% decline, Packaged Meats margin against 11.6%, and the full-year adjusted operating profit range of USD 900 million to USD 1 billion. Further items are export demand, the hog production reduction, and the Sioux Falls permitting process.