Smithfield Foods Inc Q4 2024 Earnings Call Summary

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

Question: Peter Galbo - Bank of America - Analyst : Hey, good morning, Shane and Mark and team. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 25, 2025 / 1:00PM, SFD.OQ - Q4 2024 Smithfield Foods Inc Earnings Call

Question: Peter Galbo - Bank of America - Analyst : Mark, maybe just to start, I appreciate the comments you gave on the first quarter, just year-over-year comparison, and that's very helpful. I was wondering, as it pertains to the sales guidance for the year, the low to mid-single digits, maybe if you could just give us some additional details, how you're thinking about the moving pieces on that by segment and to the extent that you can, just any color around kind of volume relative to price that's baked into your expectations on the sales line.

Question: Peter Galbo - Bank of America - Analyst : Got it. No, that's helpful. Thank you. And Shane, maybe just more broadly on hog production. I appreciate the guidance on kind of getting us a range for the year. I think through the first two months of the year, at least some of the third-party data would suggest that Hog Production is certainly much more profitable than last year, but maybe even running ahead of expectations. So I think that was what you were also implying in your prepared remarks, but just wanted to understand kind of the improvements in industry profitability you're expecting this year relative to your own guidance, which I think calls for kind of breakeven profits at the midpoint? Thanks very much.

Question: Peter Galbo - Bank of America - Analyst : Great. Thanks very much guys. I'll pass it on.

Question: Ben Theurer - Barclays - Analyst : Hey, good morning. Shane, Mark, congrats on getting the first quarter out as a public company again. Two quick follow-ups. So number one, I mean, Peter asked about like just where the sales growth is coming from, and I think I understood some modest volume growth. Can you give us maybe a few more examples in between what you've been seeing already maybe in 1Q because you said it's a little softer than a year ago. So just between Fresh Pork and the Packaged Meat side as to how to think about the volume drivers throughout the year? And then my second question is really just related around call it, global trade environment and uncertainty. Have you seen anything amongst your customers, be it in the domestic market or in the international market, i.e., the key export regions of being more hesitant putting orders in and going more to spot purchases? Just to see if there's any behavioral shift.

Question: Ben Theurer - Barclays - Analyst : Yeah. Just like if you're seeing any change in behavior from your customers because of all that uncertainty, I mean, tariffs on off, on off, I mean there seems to be a lot of confusion and if that has caused anything, particularly in your export markets? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 25, 2025 / 1:00PM, SFD.OQ - Q4 2024 Smithfield Foods Inc Earnings Call

Question: Ben Theurer - Barclays - Analyst : Got it. Thank you very much. I'll pass it on. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 25, 2025 / 1:00PM, SFD.OQ - Q4 2024 Smithfield Foods Inc Earnings Call

Question: Thomas Palmer - Citi - Analyst : Good morning and thanks for the question, guys.

Question: Thomas Palmer - Citi - Analyst : I wanted to make sure I understood the comment about 1Q seasonality, especially for Hog Production. I think traditionally, in the first quarter, maybe you see seasonally weaker results for Hog Production. Again, I just want to clarify, did the comments today suggest that maybe you'd see some seasonal or counter seasonal strength to start off the year? And then kind of for the full year, you're assuming that embedded in the outlook is that, that doesn't hold?

Question: Thomas Palmer - Citi - Analyst : Okay, thank you for that. And then just on the hog supply side, just broadly in the US, you guys have a lot better insight, I think, than we do. Are we seeing the point where hog farmers are making enough money to justify increased production? Just anything that you're seeing? Thank you.

Question: Megan Clapp - Morgan Stanley - Analyst : Hi, good morning, thanks so much. I wanted to start by asking about Packaged Meats. Obviously, really strong results and a nice finish in '24. And I think one of your slides mentioned increasing profits as the priority for '25. But I guess if we look at the overall guide for Packaged Meats, I think you are looking for a slight decline in operating profit at the midpoint. So maybe can you just -- you talked about some volatility in later Easter in terms of seasonality here in 1Q. But for the year, if we just take a step back, can you comment a little bit on the puts and takes driving that implied outlook for us?

Question: Megan Clapp - Morgan Stanley - Analyst : Great. Super helpful. And maybe for Mark, just a follow-up on some of the 1Q comments. So I was wondering if it sounds like there's going to be some year-over-year pressure on Packaged Meats and Fresh Pork specifically, but some nice year-over-year improvement on Hog Production. So as we think about just the total 1Q operating profit margin, is it fair to kind of put those together that the hog production improvement should more than -- year-over-year should more than offset any timing pressure you're expecting in Fresh Pork and

Question: Megan Clapp - Morgan Stanley - Analyst : Okay. Great, thank you.

Question: Leah Jordan - Goldman Sachs - Analyst : Hello, good morning. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 25, 2025 / 1:00PM, SFD.OQ - Q4 2024 Smithfield Foods Inc Earnings Call

Question: Leah Jordan - Goldman Sachs - Analyst : Hello, thank you. Sorry about that. Congrats, Mark and Shane, on a great quarter first back out here. I just wanted to go back to the Packaged Meats and consumers discussion. I think you noted a couple of times in prepared remarks, a dynamic environment, and I think Steve, just called it a cautious consumer environment. So just curious if you've actually seen any shift in behavior by your consumer over the last couple of months, maybe any shift in brands or products they're engaging with? And then just given this dynamic environment, has your view evolved at all with how you think about the tailwind from the value-added shift? Or perhaps there's any need for more trade spending as we go throughout this year?

Question: Leah Jordan - Goldman Sachs - Analyst : That's very helpful. Thank you. And then just for a follow-up on the Hog Production business around your optimization plans. I heard the guide for a reduction to 11.5 million hogs this year. But just if you could provide an update on the visibility into further reductions to hit your medium-term goal. Any status update on the ongoing discussions you have there with potential partners?

Question: Leah Jordan - Goldman Sachs - Analyst : Great, thank you.

Question: Manav Gupta - UBS - Analyst : Good morning. Thank you for squeezing me in. Just trying to understand the dividend payout policy here. The dividend you instituted came in better than our expectations. So how should we think about the dividend going ahead? Would it be a percentage of your net income? And how can you grow this dividend from here? Thank you.

Question: Manav Gupta - UBS - Analyst : Thank you.