Smithfield Foods Inc Q3 2025 Earnings Call Transcript

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

Question: Leah Jordan - Goldman Sachs Group Inc - Analyst : I just wanted to ask about packaged meats. I saw that volumes were flat in the quarter. You talked about a cautious consumer, you're even kind of considering some snap funding changes here. So as you look to the fourth-quarter and maybe an early look into next year, how are you thinking about the balance of volume and price as top line drivers there? And I may have missed it, but I recall last quarter, you were talking about 1% volume growth in this segment for the full year. I mean, any change to that look as you think about elasticity in the current environment?

Question: Leah Jordan - Goldman Sachs Group Inc - Analyst : Okay. That's very helpful. And then just sticking with packages, just a little bit more on profitability, just given the continued input cost pressure there. And just how are you thinking about the ability to keep -- putting price through? And then as you kind of look into '26, how do you be thinking about the long-term margin recovery there in the time line there?

Question: Heather Jones - Heather Jones's Research - Analyst : Just talk about your -- ask about your comment regarding another 30% decline in the final target for number of hogs. And I'm asking because the packaged meats environment is getting increasingly competitive, new capacity coming on, I think is next year in Solstice and bacon. So just was wondering how you're thinking about that ultimately and how you think about it fills vertical integration as a competitive advantage vis-a-vis the rest of the space?

Question: Heather Jones - Heather Jones's Research - Analyst : And the follow-up, just wondering, I mean, clearly, this year, input costs have been affected by widespread the disease. But as we're thinking about over the next few years and more of the industry becomes board integrated into packaged meats and all, are you all expecting more volatility on that belly side? And is there anything you can do to mitigate that, just less of those become available to trade on the open market?

Question: Peter Galbo - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Maybe to stick on the topic of cost inflation. I guess, Shane, like one of the surprises was how high some of the cut markets remained over the course of the summer between delis and trim. But now even since the end of the quarter, those have come in quite a bit. So I just want to get maybe an understanding from you whether that's just normal seasonality in terms of what you've seen even since the start of the quarter? Or has there been any sort of demand destruction that's caused some of the hog markets to kind of roll a bit more? Additional color there would be helpful.

Question: Peter Galbo - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Great. And Shane, I actually wanted to get your perspective on beef as well. You mentioned it a little bit. I know it can be upwards of like 20% of your buy for packaged meats. Obviously, we've had some commentary out of the administration, both kind of informally and formally through USDA. But just -- how do you kind of see the beef trim markets shaping up over the next call it, 12 months? Do you feel like there's potential for some relief there? It can be, again, a decent chunk of your raw material buy and it's been a pressure point? So would love your perspective on that going forward.

Question: Benjamin Theurer - Barclays Services Corp - Analyst : Shane, Mark, thanks for opening space for some questions here. Most of it has been asked, but just wanted to follow up a little bit within packaged meats across the portfolio, your brand versus private label. Obviously, a very successful give or take 9% increase here on pricing with essentially no impact on volume. So can you help us understand a little bit about the pricing initiatives and the mix effect maybe in between the different segments and the strategy you've been following? And how should we think about the price level as we move into the fourth-quarter and maybe into the first quarter of next year? Is that something you think you could stick on? Or is there a component of it that might come back if the commodity markets were to come down? That would be my first question.

Question: Benjamin Theurer - Barclays Services Corp - Analyst : Okay. Got it. And then just for clarification, you've lowered the CapEx guidance for the year. So maybe a little bit of clarity here and like what delaying that? Is that a delay? Or is that just a review? How should we think about the lower CapEx versus the prior guidance? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 28, 2025 / 1:00PM, SFD.OQ - Q3 2025 Smithfield Foods Inc Earnings Call

Question: Megan Alexander - Morgan Stanley - Analyst : Just a couple of follow-ups from me as well. First, on the packaged meat profit outlook, I was wondering if we could just go back to Leah's question, if you could just unpack the change and the deceleration kind of in the year-over-year profit decline that's implied in the fourth-quarter for packaged needs? And is there any way to just contextualize to what extent does that just reflect maybe pricing lagging, the raw material costs because they stayed higher for a bit longer? And how should we think about that correcting as pricing catches up in the first half of next year, if that's the case?

Question: Megan Alexander - Morgan Stanley - Analyst : Okay. That's helpful. And that's a good segue to my follow-up, which is just -- Shane, and you talked a lot about all the momentum you're seeing in the strategies and package meats the mix improvements, efficiencies, and innovation. Maybe if we just could take a step back. Can you give us REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 28, 2025 / 1:00PM, SFD.OQ - Q3 2025 Smithfield Foods Inc Earnings Call a sense of what inning you think you're in on these strategies, particularly around the mix optimization and the efficiency side of things, just provided a lot of ballast in the margins this year? I'm just trying to think about how that trends through next year and beyond?

Question: Max Gumport - Exane Bnp Paribas - Analyst : You mentioned throughout the call the cautious consumer spending environment that you're seeing now. I was hoping you could expand on what you're seeing and how that's informing your outlook for the next several months?

Question: Max Gumport - Exane Bnp Paribas - Analyst : Great. And then just related to that, you had mentioned in the prepared remarks that your outlook for 4Q, it embeds an impact from delayed SNAP payments. I was hoping you could quantify what that impact is that's embedded in your outlook for 4Q and then provide a bit of color for how you got to that quantified impact?