Smithfield Foods (NASDAQ:SFD) executives used the company’s fourth-quarter 2025 earnings call to highlight what they described as a “record” year for profit and cash generation, while also laying out a 2026 outlook that assumes continued margin expansion amid a cautious consumer backdrop and a volatile geopolitical environment.
Record 2025 results and IPO-era repositioning
President and CEO Shane Smith said 2025 marked “an outstanding year,” citing solid execution that drove record profits, expanded margins, and increased cash flow. Smith noted the company returned to U.S. public markets through an IPO in January, calling the current business a “new Smithfield” after a multiyear transformation that included streamlining the packaged meats portfolio, exiting non-core and high-cost operations, accelerating automation, and reshaping company culture around profitable growth.
Hall reported record fourth-quarter adjusted operating profit of $402 million and fourth-quarter adjusted net income from continuing operations attributable to Smithfield of $329 million, which he said was the second highest on record. Full-year adjusted net income was $1.0 billion, while adjusted diluted EPS was $0.83 in the quarter (up from $0.52 in 2024) and $2.55 for the year, a 36% increase from 2024.
Segment performance: Packaged meats resilience, fresh pork execution, hog production’s best year since 2014
Management emphasized broad-based performance across segments.
- Packaged Meats: Hall said fiscal 2025 sales were $8.8 billion, up 5.3%, driven by a 5.6% increase in average selling price with roughly flat volume. He said the segment delivered profitability despite $525 million in raw material input cost increases and a “challenging consumer spending environment.” Raw material markets cited included bellies up 19%, trim up 19% to 35%, and ham up 9% year over year. CEO Smith said the segment posted its fourth consecutive year of operating profit above $1 billion and its second-highest profit year.
- Fresh Pork: Smith and Hall pointed to $209 million of adjusted operating profit in 2025, despite what Hall called a $135 million year-over-year decline in the “industry market spread” (the price relationship between hogs and meat). Management credited a diversified channel strategy, operating efficiencies and cost savings, and “next best sale” execution, including growth in U.S. retail and contributions from value-added case-ready items, as well as pet food and pharmaceutical channels. Hall said sales were $8.3 billion, up 6%, primarily from a 5.8% increase in average selling price with roughly flat volume.
- Hog Production: Hall said adjusted operating profit was $176 million, the highest since 2014, driven by improved commodity markets and operational optimization. Sales rose 13% to $3.4 billion despite a 23% (about 3.4 million head) reduction in hogs produced as part of a rationalization strategy; the company cited higher external sales to new joint venture partners, including sales of grain, feed and services, plus the initial transfer of commercial hog inventories. The average market hog sales price was up 8.9% year over year, inclusive of hedging effects.
Smith also announced Donovan Owens was named President of North America Pork, with fresh pork, hog production, and commodity risk management reporting to him. Smith said that under Owens’ leadership, the fresh pork segment’s adjusted operating profit increased to $209 million in 2025 from $30 million in 2022. Owens will also oversee Mexico operations, which management described as integral to North America growth strategy.
Capital allocation: dividends, liquidity, Nathan’s Famous deal, and Sioux Falls investment
Smithfield highlighted shareholder returns and balance sheet strength. Smith said the company paid $1 per share in dividends in 2025 and announced a quarterly dividend of 31.25 cents per share. Management said it anticipates paying annual dividends of $1.25 per share in 2026.
Hall reported year-end net debt to adjusted EBITDA of 0.3x and liquidity of $3.8 billion, including $1.5 billion in cash and cash equivalents. Cash flow from operations was “over $1 billion,” and would have been nearly $1.3 billion when adjusted for repayment of an accounts receivable monetization facility, according to Hall. Capital expenditures were $341 million in 2025, versus $350 million in 2024; Hall said about half of planned annual capital investments are aimed at projects that drive growth, largely through automation and plant improvements to lower cost structure and better utilize labor.
On M&A, Smith said the company entered a definitive agreement in January to acquire Nathan’s Famous for $102 per share, describing it as immediately accretive if successfully closed and a way to secure a core national brand and create growth and synergy opportunities. When asked to quantify accretion drivers, management said it was limited in what it could share prior to closing, though Hall noted investors could look to Nathan’s disclosures to understand the licensing fee economics. Packaged Meats President Steve France said Smithfield knows the Nathan’s brand well from years of producing and selling products into retail, and described “virtually no integration risk,” with future opportunities to scale marketing, innovation, and distribution and expand in foodservice.
Smith also detailed a large planned investment in South Dakota. The company initiated an approval process to invest up to an estimated $1.3 billion over three years to build a new packaged meats and fresh pork processing facility in Sioux Falls. Management said the 2026 capital spend guidance does not include this project; Hall said the bulk of spending would occur in 2027 and 2028, with some spillover into 2029. Groundbreaking is expected in the first half of 2027, and operations are expected to begin by the end of 2028. Smith said the existing Sioux Falls facility is over 100 years old, making automation difficult, and that the new site would be the company’s largest combined fresh pork and packaged meats facility, expected to provide “significant efficiency gains” and a strong return on investment.
2026 outlook: low-single-digit sales growth and another potential record year
Hall guided to low-single-digit sales growth in 2026 versus 2025 and provided segment adjusted operating profit ranges. He noted the revenue outlook includes a 2025 comparison headwind: $230 million of one-time inventory sales to joint ventures that will not repeat (about 150 basis points). Guidance also reflects 53 weeks of operations in 2026 and excludes the proposed Nathan’s Famous acquisition and Sioux Falls investment impacts.
- Packaged Meats adjusted operating profit: $1.1 billion to $1.2 billion
- Fresh Pork adjusted operating profit: $200 million to $260 million
- Hog Production adjusted operating profit: $150 million to $200 million
- Total company adjusted operating profit: $1.325 billion to $1.475 billion
- 2026 capital expenditures: $350 million to $450 million
Management cited strong protein demand as a tailwind and said pork is positioned as a value option versus beef, while also noting USDA expectations for U.S. pork production to rise 2.5% in 2026. Hall said the company expects raw material costs to remain elevated versus historical standards but be slightly lower than 2025, while monitoring herd health as a key variable.
Executives also flagged potential headwinds from cautious consumer spending and a “dynamic geopolitical environment.” Hall said it was too early to predict the full impact from the conflict in Iran, but identified potential effects on fuel costs, corn prices due to oil-market correlations, and petroleum-derived supplies such as resin-based packaging.
On operations, Smith said the company is accelerating technology deployment, including a co-sourcing partnership with a third-party provider to apply artificial intelligence and robotic process automation to administrative and transactional finance work. In hog production, management said it is continuing to pursue structural cost improvements and noted that in 2025 the company produced 11.1 million hogs, down from 14.6 million in 2024, reflecting the transfer of 3.8 million hogs to external joint ventures as part of its rightsizing strategy. Over the medium term, Smith said the company continues to target producing about 30% of fresh pork’s needs internally.
In the Q&A, France said packaged meats profitability will be supported by continued mix shift toward higher-margin, value-added products, brand investment, and private label participation for consumers trading up and down price tiers. He said profitability is generally balanced between the first and second halves, though Hall noted Easter will fall earlier this year, shifting some impact into Q1, and that packaged meats margins are typically lighter in the first and fourth quarters due to seasonal ham influences. Management also said the 53rd week falls after Christmas and is “a softer week,” with a below-average impact on volume and profitability.
Closing the call, Smith thanked employees for execution in 2025 and said the company is “not stopping here,” with management aiming to continue improving operations and growing the business.
About Smithfield Foods (NASDAQ:SFD)
Smithfield Foods, Inc (NASDAQ: SFD) is one of the world’s largest pork processors and hog producers. Founded in 1936 in Smithfield, Virginia, the company has grown from a regional ham producer into a fully integrated food company offering a broad range of fresh pork, value-added meats and prepared foods. Its product portfolio includes bacon, ham, sausage, ribs and deli meats marketed under well-known brands such as Smithfield®, Nathan’s Famous® and Eckrich®.
Smithfield operates a network of hog production facilities, processing plants and distribution centers across the United States, Europe and Latin America.
