Key facts
- Smithfield Foods expects a third-quarter adjusted operating loss in its fresh pork segment.
- The company anticipates a loss of $70 million to $90 million for the fresh pork segment.
- Hog production business profit is forecast between $25 million and $45 million, down from $89 million a year ago.
- Total company adjusted operating income is projected between $115 million and $175 million, compared to $310 million last year.
- The company maintained its fiscal 2026 adjusted operating income forecast for packaged meats.
Smithfield Foods announced on Tuesday that its fresh pork segment is projected to report an adjusted operating loss in the third quarter, a significant shift from a profit in the same period last year. The company attributes this expected downturn to ongoing pressures from declining hog prices and a shrinking industry market spread, exacerbated by cautious consumer spending.
Shares of Smithfield experienced a nearly 2% decline in extended trading following the announcement. The company also forecast a decrease in adjusted operating profit for its hog production business for the current quarter compared to the previous year.
According to Smithfield, falling USDA pork cutout and hog prices have squeezed industry margins, leading to a more conservative outlook on segment profitability. CEO Shane Smith stated that the change in outlook is driven by external market conditions within parts of the pork value chain.
The company now expects a third-quarter adjusted operating loss in the fresh pork segment, its second-largest revenue generator, to be in the range of $70 million to $90 million, compared to a $10 million profit a year ago. For the hog production business, quarterly adjusted operating profit is forecast between $25 million and $45 million, a decrease from $89 million in the prior year.
Despite these headwinds, Smithfield maintained its fiscal 2026 adjusted operating income forecast for its largest segment, packaged meats, which remains between $1.08 billion and $1.15 billion. Overall, the company anticipates total adjusted operating income for the three months ending September to be between $115 million and $175 million, a notable drop from $310 million in the same period last year.
Smithfield expressed disappointment with how commodity market dynamics are impacting its near-term results, having previously cut its annual total sales and adjusted operating profit forecasts last month. The company is scheduled to participate in the Barclays Global Consumer Conference on Thursday.