Smithfield Foods Inc Q2 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Benjamin Theurer - Barclays Services Corp - Analyst : Yeah, good morning, Shay Mark, thanks for taking my question. Congrats on a very strong second quarter. Two quick ones. The first one really within Packaged Meats, and thanks for sharing a lot of details already in the presentation. But I wanted to understand a little bit better what you've been seeing in terms of like consumer shift, maybe within your brands on the portfolio? And how much potentially has shifted into private label? So any commentary additional that you can make in terms of like trends within your portfolio, that would be great. And then my second question really is, as you look at your the Hog Production obviously being very strong, clearly, that does have a negative impact into your Fresh Pork business to a small degree. So just wanted to understand what you're seeing for in terms of like profits in between one and the other? How do you feel about the current visibility of the hog crush, let's put it this way and how it impacts on one side, Hog Production, but then on the other side, Fresh Pork.

Question: Benjamin Theurer - Barclays Services Corp - Analyst : Perfect, thank you very much.

Question: Peter Galbo - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Hey, good morning, Shane and Mark, thanks for the question. Maybe to start, Shane, there's been a lot of discussion, I think, around the raw material input increases in Packaged Meats. And I know you saw a bit of that in Q2, and it seems like it's continued pretty strongly here in Q3. But despite that, you kept the outlook on Packaged Meats on profitability the same. So maybe you can just talk a little bit more about against the backdrop of increasing raw materials, why you feel confident in that kind of back half profitability guide on Packaged Meats remaining unchanged?

Question: Peter Galbo - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Great. And just as a follow-up, Mark, on the Hog Production side, I think if I did the math right, based on the 10-Q, you're hedged for about, I think, half of your Hog Production needs in the back half of the year. And so maybe there was a bit of an expectation that you would have taken up the Hog Production profitability a bit more, but potentially that the mark-to-market and hedging are keeping that a bit conservative in the back half. So can you just touch on like the dynamic in the quarter around the mark-to-market? How that hedging is impacting the second half? And again, whether that is the right way to think about potential conservatism into the back half in '26 on Hog Production?

Question: Peter Galbo - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Great thanks very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 12, 2025 / 1:00PM, SFD.OQ - Q2 2025 Smithfield Foods Inc Earnings Call

Question: Megan Clapp - Morgan Stanley - Analyst : Hi, good morning, thanks so much. I wanted to just pick up with the answer there, Mark. So looking at the futures curve, it does it would seem to indicate that maybe you're tracking towards the higher end of that Hog Production guide, especially because those mark-to-market positions are going to materialize in the back half of the year. So it seems like more of a timing impact. Shane, I think you used the word tempered in a response earlier. So maybe I would just love to get your thoughts on the range is still quite wide. So how you're thinking about looking relative to the futures curve, and whether the high end is kind of more likely at this point?

Question: Megan Clapp - Morgan Stanley - Analyst : Okay. Great. That's clear and helpful. And then maybe just a follow-up as well on Packaged Meats. Shane, I think in your prepared remarks, you said you expect volumes to be up 1% for the year. The first half came in flattish, I think if I'm doing my math correctly, I think you talked about still some consumer spending uncertainty. So maybe you could just talk about what's underpinning, what seems to be an acceleration in volume performance in the second half of the year in Packaged Meats?

Question: Megan Clapp - Morgan Stanley - Analyst : Got it thanks you.

Question: Leah Jordan - Goldman Sachs Group Inc - Analyst : Thank you. Good morning. Firstly, if you could comment what you're seeing across the competitive environment for Packaged Meat. How has your promotional activity tracked versus plan? Or has anything changed with how consumers are responding over the past few months, given you highlighted cautious consumer spending?

Question: Leah Jordan - Goldman Sachs Group Inc - Analyst : That's very helpful. I just wanted to follow up around the value-added shift. I mean that's been a big initiative for you guys. It sounded like you had constructive comments around lunch meat and dry sausage today. Just could you comment on how the magnitude of that shift toward value-added has evolved throughout this year? Just given the dynamic consumer backdrop? And perhaps how you're thinking it could be changed in the back half? And then just given what you're seeing on the demand side for those products, just how are you thinking about potential incremental needs for more capacity over the next few years as well?

Question: Leah Jordan - Goldman Sachs Group Inc - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 12, 2025 / 1:00PM, SFD.OQ - Q2 2025 Smithfield Foods Inc Earnings Call

Question: Heather Jones - Heather Jones - Analyst : I want to start with Packaged Meats. I was wondering if you could give us a sense of how you're expecting the cadence of the second half to play out given the cost inflation you mentioned in bellies and all that is picked up accelerated in late June into July? And just so how we should think about the second half playing out there?

Question: Heather Jones - Heather Jones - Analyst : Yeah, My concern was you all had mentioned you had the price pass-through mechanisms. And I just didn't know, given what bellies have done if there was a delay that would make the softer seasonality even more pronounced this year for Q3 versus Q4. But it sounds like that's not the case. Moving on to Hog Production, and I hate to belabor the point, but looking at your guide implies close to $15 a head for the back half and getting back some of the mark-to-market hit in the first half. And you all have your productivity initiatives that are giving you an additional tailwind to market tailwinds. And so just wondering, is there potential for further upside to that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 12, 2025 / 1:00PM, SFD.OQ - Q2 2025 Smithfield Foods Inc Earnings Call Are you baking in some conservatism because the portion you don't have hedge just to be conservative on that front? Or just help us to think about that because it's a very strong year, but it does seem like a conservative outlook given what we see in the industry? So just any help you could provide on that front would be awesome.

Question: Heather Jones - Heather Jones - Analyst : Okay, thank you so much.

Question: Manav Gupta - UBS AG - Analyst : Hi, My first quick question is, obviously, when we look at Slide 7, you are number 1 and number 2 in most categories. I just wanted to understand if you're also looking to increase your market share in uncooked breakfast sausage and uncooked dinner sausage, or those are not the focus areas at this point of time?

Question: Manav Gupta - UBS AG - Analyst : And my quick follow-up here is, obviously, your first half and second half look alike. But between the third and the fourth quarter, should there be any kind of seasonality, or should we kind of think of both those quarters to be contributing similar amounts to earnings? Or would you think one would be relatively stronger than the other one?

Question: Manav Gupta - UBS AG - Analyst : Thank you so much.