Key facts
- Smithfield Foods reduced its full-year sales and adjusted operating profit forecasts.
- The company cited cautious consumer spending and increased input costs as primary challenges.
- Fiscal 2026 sales are now expected to be flat, compared to prior guidance of low-single-digit growth.
- Adjusted operating profit is projected between $1.23 billion and $1.38 billion, a decrease from the previous $1.33 billion to $1.48 billion range.
- Smithfield Foods exceeded second-quarter sales and profit estimates.
Smithfield Foods has revised its annual financial outlook downwards, citing persistent challenges such as cautious consumer spending and elevated input costs. The company announced on Tuesday that it now expects fiscal 2026 sales to remain roughly flat, a shift from its prior projection of low-single-digit percentage growth. The adjusted operating profit forecast has also been narrowed and lowered to a range of $1.23 billion to $1.38 billion, down from the previous $1.33 billion to $1.48 billion estimate.
Despite the trimmed full-year outlook, Smithfield Foods managed to surpass analyst expectations for its second quarter. Sales for the three months ended June 28 reached $3.7 billion, slightly exceeding the $3.68 billion estimated by analysts. On an adjusted basis, the company earned 62 cents per share, also beating the consensus estimate of 60 cents per share.
The company's Hog Production unit saw sales decline by 8.2% to $772 million compared to the previous year. This comes as inflation has slowed, but consumer budgets remain strained, leading shoppers to opt for smaller pack sizes or less expensive alternatives. In a related development, peer Tyson Foods also recently lowered its annual profit forecast, warning of wider losses in its beef business due to high livestock costs stemming from tight U.S. cattle supplies.
Separately, President Donald Trump has reportedly been considering executive actions aimed at reducing tariffs on beef imports and easing regulations on producers to lower domestic beef prices.