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    SMITHFIELD FOODS REPORTS STRONG FOURTH QUARTER AND FISCAL YEAR 2024 RESULTS LED BY PACKAGED MEATS SEGMENT

    3/25/25 4:30:00 AM ET
    $SFD
    Meat/Poultry/Fish
    Consumer Staples
    Get the next $SFD alert in real time by email

    SMITHFIELD, Va., March 25, 2025 /PRNewswire/ -- Smithfield Foods, Inc. (NASDAQ:SFD), an American food company and an industry leader in value-added packaged meats and fresh pork, today reported results for its fourth quarter and fiscal year ended December 29, 2024. The Company also provided its financial outlook for fiscal 2025 and announced a quarterly dividend of $0.25 per share.

    Full Year Fiscal 2024 Financial Highlights

    • Net sales of $14.1 billion
    • Operating profit of $1.1 billion; adjusted operating profit of $1.0 billion
    • Operating margin of 7.9%; adjusted operating margin of 7.2%
    • Packaged Meats segment operating profit of $1.2 billion; adjusted operating profit of $1.1 billion - both records
    • Packaged Meats segment operating profit margin of 14.0%; adjusted operating profit margin of 13.6%, up 70 basis points from 12.9% in fiscal 2023
    • Net income from continuing operations per common share attributable to Smithfield of $2.06; adjusted net income from continuing operations per common share attributable to Smithfield of $1.88

    Fourth Quarter Fiscal 2024 Financial Highlights

    • Net sales of $4.0 billion
    • Operating profit of $335 million; adjusted operating profit of $315 million, up from adjusted operating profit of $230 million in the fourth quarter of 2023
    • Operating margin of 8.5%; adjusted operating margin of 8.0%
    • Packaged Meats segment operating profit of $313 million; operating profit margin of 12.7%
    • Net income from continuing operations per common share attributable to Smithfield of $0.56; adjusted net income from continuing operations per common share attributable to Smithfield of $0.52

    CEO Perspective

    "We are excited to return to the U.S. public markets as a leading packaged meats company with strong profitability and a solid balance sheet to support our future growth," said Smithfield President and CEO Shane Smith. "In fiscal 2024, we delivered operating profit of more than $1.1 billion and adjusted operating profit of $1.0 billion, up nearly four times from adjusted operating profit of $258 million in 2023. This strong rebound reflects our resilient business model, led by another year of record profits in our Packaged Meats segment, our third consecutive year of profit growth in our Fresh Pork segment and a more than $600 million increase in Hog Production segment profitability."

    Smith continued, "Looking ahead, we are focused on continuing to execute the strategies that have more than doubled our Packaged Meats segment operating profit over the past ten years as well as our strategies to further optimize our Fresh Pork and Hog Production operations. We have built a solid foundation that positions us well for the future with a strong balance sheet and ample cash flow to support our growth strategies and increase value for our shareholders."

    Review of Financial Results

    Results of Operations



    Sales





    Three Months Ended







    Twelve Months Ended







    December 29,

    2024



    December 31,

    2023



    $

    Change



    December 29,

    2024



    December 31,

    2023



    $

    Change



    (in millions)



    (in millions)

    Sales by segment:























    Packaged Meats

    $        2,458



    $        2,404



    $      54



    $        8,319



    $        8,280



    $      39

    Fresh Pork

    2,002



    1,836



    166



    7,873



    7,832



    42

    Hog Production

    782



    819



    (37)



    3,002



    3,317



    (315)

    Other

    121



    178



    (57)



    471



    559



    (88)

            Total segment sales

    5,364



    5,238



    126



    19,665



    19,988



    (323)

    Inter-segment sales eliminations:























    Fresh Pork

    (754)



    (617)



    (137)



    (2,990)



    (2,694)



    (296)

    Hog Production

    (659)



    (621)



    (37)



    (2,533)



    (2,646)



    114

    Other

    —



    (2)



    2



    (1)



    (7)



    6

    Total inter-segment sales

         eliminations

    (1,413)



    (1,240)



    (173)



    (5,524)



    (5,348)



    (176)

    Sales

    $        3,951



    $        3,998



    $    (47)



    $      14,142



    $      14,640



    $  (498)



    Operating Profit (Loss)





    Three Months Ended







    Twelve Months Ended







    December 29,

    2024



    December 31,

    2023



    $

    Change



    December 29,

    2024



    December 31,

    2023



    $

    Change



    (in millions)



    (in millions)

    Packaged Meats

    $            313



    $            306



    $        7



    $        1,168



    $        1,066



    $    102

    Fresh Pork

    70



    45



    26



    266



    117



    150

    Hog Production

    (8)



    (131)



    122



    (144)



    (756)



    612

    Other

    17



    13



    4



    35



    (4)



    39

    Corporate expenses

    (62)



    (25)



    (37)



    (153)



    (107)



    (46)

    Unallocated

    4



    (324)



    328



    (55)



    (371)



    316

    Operating profit (loss)

    $            335



    $          (116)



    $    450



    $        1,118



    $            (56)



    $ 1,174

    We recently removed income from equity method investments from the measure of segment profit reviewed by our Chief Operating Decision Maker. Accordingly, the historical segment results presented herein have been retrospectively adjusted to remove income from equity method investments.

    Financial Position

    As of December 29, 2024, we had $3,245 million of available liquidity consisting of $943 million in cash and cash equivalents and $2,303 million of availability under our committed credit facilities. We generated $916 million in cash flows from operating activities and ended fiscal year 2024 with a net debt to Adjusted EBITDA ratio of 0.8x. 

    Dividend Update

    On March 24, 2025, our Board declared a quarterly cash dividend of $0.25 per share of common stock, which is payable on April 22, 2025, to shareholders of record on April 10, 2025. We anticipate the remaining quarterly dividends in fiscal year 2025 will be $0.25 per share, resulting in an annual dividend rate in fiscal year 2025 of $1.00 per share. The declaration of dividends is subject to the discretion of our Board and depends on various factors, including our net income, financial condition, cash requirements, business prospects, and other factors that our Board deems relevant to its analysis and decision making.

    FY 2025 Outlook

    For Fiscal Year 2025, the Company expects:

    • Packaged Meats segment adjusted operating profit of between $1,050 million to $1,150 million.
    • Fresh Pork segment adjusted operating profit of between $150 million to $250 million.
    • Hog Production segment adjusted operating (loss)/profit of between $(50) million to $50 million.
    • Total Company adjusted operating profit of between $1,100 million to $1,300 million.
    • Total Company sales to increase in the low-to-mid-single-digit percent range compared to fiscal year 2024.
    • Capital expenditures of between $400 million to $500 million. Capital expenditures include investments in profit improvement projects as well as projects for maintenance and repair.
    • An effective tax rate of between 23.0% and 25.0%.

    Conference Call Information

    A conference call to discuss the fourth quarter and fiscal year 2024 financial results is scheduled for today, March 25, 2025, at 9:00 a.m. Eastern Time. A live audio webcast of the conference call, together with related materials, will be available online at investors.smithfieldfoods.com or by dialing 866-777-2509 (international callers please dial 412-317-5413).

    A recorded replay of the conference call is expected to be available approximately three hours after the conclusion of the call and can be accessed both online at investors.smithfieldfoods.com and by dialing 877-344-7529 (international callers please dial 412-317-0088). The pin number to access the telephone replay is 6445081. The replay will be available until April 1, 2025.

    About Smithfield Foods

    Smithfield Foods, Inc. (NASDAQ:SFD) is an American food company with a leading position in packaged meats and fresh pork products. With a diverse brand portfolio and strong relationships with U.S. farmers and customers, we responsibly meet demand for quality protein around the world.

    Non-GAAP Financial Measures

    This press release includes certain financial information that is not presented in accordance with generally accepted accounting principles in the United States ("GAAP"), including (i) adjusted net income from continuing operations attributable to Smithfield, (ii) adjusted net income from continuing operations per common share attributable to Smithfield, (iii) EBITDA from continuing operations, (iv) adjusted EBITDA from continuing operations, (v) adjusted EBITDA margin from continuing operations, (vi) adjusted operating profit, (vii) adjusted operating profit margin, (viii) net debt and (ix) ratio of net debt to adjusted EBITDA from continuing operations. We refer to these measures as "non-GAAP" financial measures.

    (i) Adjusted net income from continuing operations attributable to Smithfield is defined as net income (loss), excluding the effects of legal settlements (both gain and loss) and loss contingencies, transactions or events that are not part of our core business activities or are unusual in nature (whether gains or losses) and the tax effects of the foregoing items. We believe that adjusted net income from continuing operations attributable to Smithfield is a useful measure because it excludes the effects of discontinued operations, non-operating gains and losses and other items that are unusual in nature, infrequent in occurrence or otherwise stem from strategic decisions to restructure our operations. (ii) Adjusted net income from continuing operations per common share attributable to Smithfield is defined as adjusted net income from continuing operations attributable to Smithfield divided by total outstanding common shares. (iii) EBITDA from continuing operations is defined as earnings before interest, taxes, depreciation and amortization. We believe that EBITDA is a useful measure because it excludes the effects of financing and investing activities by eliminating interest and depreciation costs to provide a comparable year-over-year analysis. (iv) Adjusted EBITDA from continuing operations is defined as EBITDA further adjusted for legal settlements (both gain and loss) and loss contingencies and transactions or events that are not part of our core business activities or are unusual in nature (whether gains or losses). We believe that adjusted EBITDA from continuing operations is a useful measure because it excludes the effects of discontinued operations, non-operating gains and losses and other items that are unusual in nature, infrequent in occurrence or otherwise stem from strategic decisions to restructure our operations. (v) Adjusted EBITDA margin from continuing operations is defined as adjusted EBITDA from continuing operations divided by total sales. We believe that adjusted EBITDA margin from continuing operations is a useful measure because it evaluates overall operating performance, ability to pursue and service possible debt opportunities and possible future investment opportunities. (vi) Adjusted operating profit is defined as operating profit, excluding items that are unusual in nature, infrequent in occurrence or otherwise stem from strategic decisions to restructure our operations. (vii) Adjusted operating profit margin is adjusted operating profit expressed as a percentage of revenues. We believe that adjusted net income from continuing operations attributable to Smithfield, adjusted net income from continuing operations per common share attributable to Smithfield, adjusted operating profit and adjusted operating profit margin provide a better understanding of underlying operating results and trends of established, ongoing operations of our business. (viii) Net debt is defined as long-term debt and finance lease obligations, including the current portion, minus cash and cash equivalents. We believe that net debt is a useful measure because it helps to give investors a clear understanding of our financial position and is also used to calculate certain leverage ratios. (ix) Ratio of net debt to adjusted EBITDA from continuing operations is defined as net debt divided by adjusted EBITDA from continuing operations. We believe that ratio of net debt to adjusted EBITDA from continuing operations is a useful measure because it monitors the sustainability of our debt levels and our ability to take on additional debt against adjusted EBITDA from continuing operations, which is used as an operating performance measure.

    Although these non-GAAP measures are frequently used by investors and securities analysts in their evaluations of companies in industries similar to ours, these non-GAAP measures have limitations as analytical tools, are not measurements of our performance under GAAP and should not be considered as alternatives to operating profit, net income or any other performance measures derived in accordance with GAAP and should not be used by investors or other users of our financial statements in isolation for formulating decisions, as such non-GAAP measures exclude a number of important cash and non-cash charges.

    You should be aware that our presentation of these and other non-GAAP financial measures in this press release may not be comparable to similarly titled measures used by other companies. A reconciliation of each of these non-GAAP measures to its most directly comparable financial measure calculated in accordance with GAAP is provided in this release.

    The Company's outlook for fiscal year 2025 includes adjusted operating profit and adjusted segment operating profit. The Company is not able to reconcile its fiscal year 2025 projected adjusted results to its fiscal year 2025 projected GAAP results because certain information necessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of our control. Therefore, because of the uncertainty and variability of the nature of and the amount of any potential applicable future adjustments, which could be significant, the Company is unable to provide a reconciliation for these forward-looking non-GAAP measures without unreasonable effort.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management, and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words, such as "may," "will," "shall," "should," "expects," "plans," "anticipates," "intends," "projects," "contemplates," "believes," or "estimates" or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Specific forward-looking statements in this press release include our ability to successfully continue to execute the strategies that have more than doubled our Packaged Meats segment profitability over the past ten years, as well as our strategies to further optimize our Fresh Pork and Hog Production operations; our ability to support our growth strategies and increase value for our shareholders; our financial outlook for 2025; and the anticipated payment of annual dividends of $1.00 per share in 2025.

    We have based the forward-looking statements contained in this press release primarily on our current expectations, estimates, forecasts and projections about future events and trends that we believe may affect our business, results of operations, financial condition and prospects. Although we believe that we have a reasonable basis for each forward-looking statement contained in this press release, the results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. We undertake no duty to update any statement made in this press release in light of new information or future events.

    The forward-looking statements contained in this press release are subject to substantial risks and uncertainties that could affect our current expectations and our actual results, including, among others: (i) the cyclical nature of our operations and fluctuations in commodity prices; (ii) our dependence on third-party suppliers; (iii) our ability to execute on our strategy to optimize the size of our hog production operations; (iv) our ability to navigate geopolitical risks including increased tariffs on our exports, (v) our ability to mitigate higher input costs through productivity improvements in our operations, procurement strategies and the use of derivative instruments; (vi) our ability to compete successfully in the food industry; (vii) our ability to anticipate and meet consumer trends and interests through product innovation; (viii) compliance with laws and regulations, including environmental, cybersecurity and tax laws and regulations in the United States and Mexico; (ix) our ability to defend litigation brought against us and the sufficiency of our accruals for related contingent losses; (x) our ability to prevent cyberattacks, security breaches or other disruptions of our information technology systems; (xi) future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements; (xii) our dividend policy and our ability to pay dividends; and (xiii) our status as a "controlled company" and any resulting potential conflicts of interest. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online from the SEC or by contacting Smithfield's Investor Relations Department at [email protected] or by clicking on SEC Filings on the Smithfield Investor Relations website at investors.smithfieldfoods.com.

    (Financial Tables Follow)

    SMITHFIELD FOODS, INC. AND SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF INCOME

    (in millions, except for share and per share data)





    Three Months Ended



    Twelve Months Ended



    December 29,

    2024



    December 31,

    2023



    December 29,

    2024



    December 31,

    2023

    Sales

    $             3,951



    $           3,998



    $           14,142



    $           14,640

    Cost of sales

    3,418



    3,713



    12,244



    13,751

    Gross profit

    533



    285



    1,897



    889

    Selling, general and administrative expenses

    246



    407



    840



    1,050

    Operating gains

    (47)



    (6)



    (60)



    (105)

    Operating profit (loss)

    335



    (116)



    1,118



    (56)

    Interest expense, net

    14



    17



    66



    76

    Non-operating (gains) losses

    5



    (6)



    (9)



    (3)

    Income (loss) from continuing operations before income taxes

    316



    (126)



    1,061



    (129)

    Income tax expense (benefit)

    105



    (42)



    271



    (41)

    (Income) loss from equity method investments

    (6)



    46



    (8)



    46

    Net income (loss) from continuing operations

    217



    (131)



    798



    (133)

    Net income from continuing operations attributable to noncontrolling

         interests

    6



    8



    14



    5

    Net income (loss) from continuing operations attributable to

         Smithfield

    211



    (139)



    783



    (138)

















    Income (loss) from discontinued operations before income taxes

    (3)



    53



    184



    185

    Income tax expense from discontinued operations

    4



    10



    13



    30

    Net income (loss) from discontinued operations attributable to

         Smithfield

    (7)



    43



    172



    155

    Net income from discontinued operations attributable to

         noncontrolling interests

    —



    —



    2



    —

    Net income (loss) from discontinued operations attributable to

         Smithfield

    (7)



    43



    170



    155

















    Net income (loss)

    210



    (87)



    970



    23

    Net income attributable to noncontrolling interests

    6



    8



    17



    5

    Net income (loss) attributable to Smithfield

    $                204



    $              (96)



    $                953



    $                 17

















    Net income (loss) per common share attributable to Smithfield:















    Basic and diluted:















    Continuing operations

    $               0.56



    $           (0.37)



    $               2.06



    $             (0.36)

    Discontinued operations

    (0.02)



    0.11



    0.45



    0.41

    Total

    $               0.54



    $           (0.25)



    $               2.51



    $               0.05

















    Weighted average shares outstanding















    Basic

    380,069,232



    380,069,232



    380,069,232



    380,069,232

    Diluted

    380,069,232



    380,069,232



    380,069,232



    380,069,232

     

    SMITHFIELD FOODS, INC. AND SUBSIDIARIES

    CONSOLIDATED BALANCE SHEETS

    (in millions, except share data)





    December 29,

    2024



    December 31,

    2023

    ASSETS

    Current assets:







    Cash and cash equivalents

    $                   943



    $                   687

    Accounts receivable, net

    558



    577

    Inventories, net

    2,412



    2,536

    Current assets of discontinued operations

    —



    958

    Prepaid expenses and other current assets

    290



    163

    Total current assets

    4,202



    4,921









    Property, plant and equipment, net

    3,176



    3,347

    Goodwill

    1,613



    1,627

    Intangible assets, net

    1,266



    1,274

    Operating lease assets

    335



    381

    Equity method investments

    202



    191

    Long-term assets of discontinued operations

    —



    1,347

    Other assets

    260



    230

    Total assets

    $               11,054



    $               13,317









    LIABILITIES AND EQUITY

    Current liabilities:







    Accounts payable

    777



    789

    Current portion of long-term debt and finance lease obligations

    3



    27

    Current portion of operating lease obligations

    56



    63

    Current liabilities of discontinued operations

    —



    406

    Accrued expenses and other current liabilities

    871



    1,166

    Total current liabilities

    1,706



    2,450









    Long-term debt and finance lease obligations

    1,999



    2,006

    Long-term operating lease obligations

    286



    325

    Deferred income taxes, net

    518



    474

    Net long-term pension obligation

    279



    255

    Long-term liabilities of discontinued operations

    —



    86

    Other liabilities

    208



    235









    Redeemable noncontrolling interests

    225



    246









    Commitments and contingencies















    Equity:







    Shareholder's equity:







    Preferred stock, no par value, 100,000,000 shares authorized, no shares issued and

         outstanding

    —



    —

    Common stock, no par value, 5,000,000,000 shares authorized, 380,069,232 issued and

         outstanding

    —



    —

    Additional paid-in capital

    3,102



    4,152

    Retained earnings

    3,184



    3,588

    Accumulated other comprehensive loss

    (452)



    (500)

    Total shareholder's equity

    5,834



    7,241

    Noncontrolling interests

    —



    —

    Total equity

    5,834



    7,241

    Total liabilities and equity

    $               11,054



    $               13,317

     

    SMITHFIELD FOODS, INC. AND SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF CASH FLOWS

    (in millions)





    Twelve Months Ended



    December 29,

    2024



    December 31,

    2023

    Cash flows from operating activities:







    Net income

    $                   970



    $                     23

    Less: Net income from discontinued operations

    (172)



    (155)

    Net income (loss) from continuing operations

    $                   798



    $                 (133)

    Adjustments to reconcile net income from continuing operations to net cash flows from

         operating activities of continuing operations:







    Depreciation and amortization

    339



    427

    Deferred income taxes

    91



    (130)

    Impairment of assets

    1



    1

    (Income) loss from equity method investments

    (8)



    46

    (Gain) loss on sale of other assets

    15



    11

    (Gain) loss on sale of property, plant and equipment

    (35)



    (85)

    Change in accounts receivable

    (6)



    157

    Change in inventories

    138



    469

    Change in prepaid expenses and other current assets

    (88)



    57

    Change in accounts payable

    (19)



    (215)

    Change in accrued expenses and other current liabilities

    (261)



    80

    Other

    (49)



    2

    Net cash flows from operating activities of continuing operations

    916



    688









    Cash flows from investing activities:







    Capital expenditures

    (350)



    (353)

    Net expenditures from breeding stock transactions

    (43)



    (48)

    Investments in partnerships and other assets

    (13)



    (27)

    Business dispositions

    —



    13

    Proceeds from sale of property, plant and equipment and other assets

    99



    219

    Other

    9



    3

    Net cash flows from (used in) investing activities of continuing operations

    (298)



    (194)









    Cash flows from financing activities:







    Payment of dividends

    (288)



    (323)

    Repayments to Securitization Facility

    (14)



    (226)

    Proceeds from Securitization Facility

    14



    226

    Purchase of redeemable noncontrolling interest

    —



    (15)

    Net repayments to revolving credit facilities

    (8)



    (7)

    Principal payments on long-term debt and finance lease obligations

    (24)



    (4)

    Payment of deferred purchase consideration for acquisition

    (2)



    (2)

    Other

    1



    (2)

    Net cash flows used in financing activities of continuing operations

    (321)



    (353)









    Effect of foreign exchange rate changes on cash from continuing operations

    (7)



    3











    Twelve Months Ended



    December 29,

    2024



    December 31,

    2023

    Cash flows from discontinued operations







    Net cash flows from operating activities of discontinued operations

    221



    346

    Net cash flows used in investing activities of discontinued operations

    (171)



    (128)

    Net cash flows used in financing activities of discontinued operations

    (143)



    (180)

    Effect of foreign exchange rate changes on cash from discontinued operations

    (5)



    —

    Net change in cash and cash equivalents of discontinued operations

    (98)



    38









    Net change in cash, cash equivalents and restricted cash

    192



    181









    Cash, cash equivalents and restricted cash at beginning of period (including discontinued

         operations)

    751



    570

    Cash, cash equivalents and restricted cash at end of period (including discontinued operations)

    943



    751

    Less: Cash, cash equivalents and restricted cash attributable discontinued operations at end of

         period

    —



    (64)

    Cash, cash equivalents and restricted cash at end of period

    $                   943



    $                   687

    Non-GAAP Financial Measures

    Adjusted Net Income from Continuing Operations Attributable to Smithfield and Adjusted Net Income from Continuing Operations per Common Share Attributable to Smithfield

    The following table provides a reconciliation of net income from continuing operations to adjusted net income from continuing operations attributable to Smithfield.



    Three Months Ended



    Twelve Months Ended

    Affected income

    statement

    account



    December 29,

    2024



    December 31,

    2023



    December 29,

    2024



    December 31,

    2023





    (in millions, except per share data)



    Net income from continuing operations

         attributable to Smithfield

    211



    (139)



    783



    (138)





    Employee Retention Tax Credits (1)

    —



    —



    (86)



    —



    Cost of sales

    Employee Retention Tax Credits (1)

    —



    —



    (1)



    —



    SG&A

    West Coast Exit and Hog Production

         Reform (2)

    (38)



    —



    (38)



    —



    Operating gains

    West Coast Exit and Hog Production

         Reform (3)

    18



    99



    31



    195



    Cost of sales

    West Coast Exit and Hog Production

         Reform (4)

    —



    49



    —



    49



    (Income) loss from

    equity method

    investments

    Insurance recoveries

    —



    —



    (4)



    (5)



    Operating gains

    Litigation charges (5)

    —



    196



    —



    208



    SG&A

    Gain on sale of Vernon, California

         facility

    —



    —



    —



    (86)



    Operating gains

    Incremental costs from destruction of

         property

    —



    2



    4



    3



    Cost of sales

    Income tax effect of non-GAAP

         adjustments (6)

    5



    (89)



    24



    (94)



    Income tax expense

    (benefit)

    Adjusted net income from continuing

         operations attributable to Smithfield

    196



    118



    714



    132

























    Net income (loss) from continuing

         operations attributable to Smithfield per

         common share (basic and diluted)

    $           0.56



    $       (0.37)



    $           2.06



    $       (0.36)





    Adjusted net income from continuing

         operations attributable to Smithfield  per

         common share (basic and diluted)

    $           0.52



    $           0.31



    $           1.88



    $           0.35

















    (1)

    The Coronavirus Aid, Relief, and Economic Security Act provided an employee retention credit to eligible employers who paid qualified wages to employees during the COVID-19 pandemic. In the second quarter of 2024, we recognized $86 million and $1 million of employee retention credits in cost of sales and SG&A, respectively.

    (2)

    Includes a $32 million gain on sale of our Utah hog farms and a $6 million gain on the sale of breeding stock to Murphy Family Farms LLC.

    (3)

    Consists of costs related to the closure of our Vernon, California processing facility, the closure and/or reduction of certain farms in Arizona, California, Missouri and Utah and certain residual operating and restructuring expenses, including the termination of a number of agreements with contract farmers, workforce reduction, and accelerated depreciation of machinery equipment with no future alternative use, due to discontinuation of operations in the West Coast and efforts to improve the cost structure of our Hog Production segment.

    (4)

    Includes an impairment of certain biogas assets recognized by our joint venture, Align, and costs incurred in connection with the closure of certain farms in Missouri that impacted assets owned by our joint venture, Monarch.

    (5)

    Consists of accruals for the antitrust price-fixing and antitrust wage-fixing litigation matters.

    (6)

    Represents the tax effects of the non-GAAP adjustments based on a statutory tax rate of 25.7%.

    EBITDA from Continuing Operations, Adjusted EBITDA from Continuing Operations and Adjusted EBITDA Margin from Continuing Operations

    The following table provides a reconciliation of net income from continuing operations to EBITDA from continuing operations and adjusted EBITDA from continuing operations.



    Three Months Ended



    Twelve Months Ended



    Affected income

    statement

    account



    December 29,

    2024



    December 31,

    2023



    December 29,

    2024



    December 31,

    2023





    (in millions, except percentages)





    Net income (loss) from continuing

         operations

    $          217



    $        (131)



    $          798



    $        (133)





    Interest expense, net

    14



    17



    66



    76





    Income tax expense (benefit)

    105



    (42)



    271



    (41)





    Depreciation and amortization

    87



    131



    339



    427





    EBITDA from continuing operations

    $          423



    $          (24)



    $       1,474



    $          329





    Employee Retention Tax Credits

    —



    —



    (86)



    —



    Cost of sales

    Employee Retention Tax Credits

    —



    —



    (1)



    —



    SG&A

    West Coast Exit and Hog Production

         Reform

    (38)



    —



    (38)



    —



    Operating gains

    West Coast Exit and Hog Production

         Reform (1)

    17



    57



    29



    110



    Cost of sales

    West Coast Exit and Hog Production

         Reform

    —



    49



    —



    49



    (Income) loss from

    equity method

    investments

    Insurance recoveries

    —



    —



    (4)



    (5)



    Operating gains

    Incremental costs from destruction of

         property

    —



    2



    4



    3



    Cost of sales

    Litigation charges

    —



    196



    —



    208



    SG&A

    Gain on sale of Vernon, California

         facility

    —



    —



    —



    (86)



    Operating gains

    Adjusted EBITDA from continuing

         operations

    $          402



    $          279



    $       1,379



    $          610

























    Net income (loss) margin from continuing

         operations

    5.5 %



    (3.3) %



    5.6 %



    (0.9) %





    Adjusted EBITDA margin from continuing

         operations

    10.2 %



    7.0 %



    9.7 %



    4.2 %

















    (1)

    Excludes accelerated depreciation and amortization charges of $1 million and $42 million for the three months ended December 29, 2024 and December 31, 2023, respectively, and $2 million and $85 million for fiscal years 2024 and 2023, respectively, as such charges are included in the depreciation and amortization line in this table.

    Net Debt and Ratio of Net Debt to Adjusted EBITDA from Continuing Operations

    The following table provides a reconciliation of total debt and finance lease obligations to net debt, the ratio of total debt and finance lease obligations to net income from continuing operations, and the ratio of net debt to adjusted EBITDA.



    Twelve Months Ended



    December 29,

    2024



    December 31,

    2023



    (in millions, except ratios)

    Current portion of long-term debt and capital lease

    $                        3



    $                       27

    Long-term debt and finance lease obligations

    1,999



    2,006

    Total debt and finance lease obligations

    2,002



    2,033

    Cash and cash equivalents

    (943)



    (687)

    Net debt

    $                 1,059



    $                  1,345









    Net income (loss) from continuing operations

    $                    798



    $                   (133)

    Adjusted EBITDA from continuing operations

    $1,379



    $610









    Ratio of total debt and finance lease obligations to net income (loss) from continuing

         operations

    2.5x



    (15.3x)

    Ratio of net debt to adjusted EBITDA from continuing operations

    0.8x



    2.2x

    Adjusted Operating Profit and Adjusted Operating Profit Margin

    The following table provides a reconciliation of operating profit to adjusted operating profit. Adjusted operating profit and adjusted operating profit margin are non-GAAP measures.

    Three Months Ended

    December 29, 2024

    Packaged

    Meats



    Fresh Pork



    Hog

    Production



    Other (1)



    Corporate (2)



    Unallocated (3)



    Consolidated



    (in millions, except percentages)

    Operating profit (loss)

    $        313



    $          70



    $        (8)



    $          17



    $            (62)



    $                  4



    $            335

    Hog Production Reform

    —



    —



    —



    —



    —



    (20)



    (20)

    Adjusted operating

         profit (loss)

    $        313



    $          70



    $        (8)



    $          17



    $             (62)



    $               (16)



    $            315





























    Operating profit (loss)

         margin

    12.7 %



    3.5 %



    (1.0) %



    13.7 %



    NM



    NM



    8.5 %

    Adjusted operating profit

         (loss) margin

    12.7 %



    3.5 %



    (1.0) %



    13.7 %



    NM



    NM



    8.0 %



    Three Months Ended

    December 31, 2023

    Packaged

    Meats



    Fresh Pork



    Hog

    Production



    Other (1)



    Corporate (2)



    Unallocated (3)



    Consolidated



    (in millions, except percentages)

    Operating profit (loss)

    $        306



    $          45



    $    (131)



    $          13



    $            (25)



    $            (324)



    $           (116)

    Litigation charges

    —



    —



    —



    —



    —



    196



    196

    West Coast Exit and Hog

         Production Reform

    —



    —



    —



    —



    —



    148



    148

    Incremental costs from

         destruction of property

    —



    —



    —



    —



    —



    2



    2

    Adjusted operating

         profit (loss)

    $        306



    $          45



    $    (131)



    $          13



    $            (25)



    $                22



    $            230





























    Operating profit (loss)

         margin

    12.7 %



    2.4 %



    (15.9) %



    7.1 %



    NM



    NM



    (2.9) %

    Adjusted operating profit

         (loss) margin

    12.7 %



    2.4 %



    (15.9) %



    7.1 %



    NM



    NM



    5.7 %



    Twelve Months Ended

    December 29, 2024

    Packaged

    Meats



    Fresh Pork



    Hog

    Production



    Other (1)



    Corporate (2)



    Unallocated (3)



    Consolidated



    (in millions, except percentages)

    Operating profit (loss)

    $     1,168



    $        266



    $    (144)



    $          35



    $           (153)



    $               (55)



    $         1,118

    Employee retention tax

         credits

    (38)



    (41)



    (8)



    —



    —



    —



    (87)

    West Coast Exit and Hog

         Production Reform

    —



    —



    —



    —



    —



    (7)



    (7)

    Insurance recoveries

    —



    —



    —



    —



    —



    (4)



    (4)

    Incremental costs from

         destruction of property

    —



    —



    —



    —



    —



    4



    4

    Adjusted operating

         profit (loss)

    $     1,130



    $        225



    $    (152)



    $          35



    $           (153)



    $               (61)



    $         1,024





























    Operating profit (loss)

         margin

    14.0 %



    3.4 %



    (4.8) %



    7.4 %



    NM



    NM



    7.9 %

    Adjusted operating profit

         (loss) margin

    13.6 %



    2.9 %



    (5.0) %



    7.4 %



    NM



    NM



    7.2 %



    Twelve Months Ended

    December 31, 2023

    Packaged

    Meats



    Fresh Pork



    Hog

    Production



    Other (1)



    Corporate (2)



    Unallocated (3)



    Consolidated



    (in millions, except percentages)

    Operating profit (loss)

    $     1,066



    $        117



    $    (756)



    $           (4)



    $           (107)



    $             (371)



    $             (56)

    Litigation charges

    —



    —



    —



    —



    —



    208



    208

    West Coast Exit and Hog

         Production Reform

    —



    —



    —



    —



    —



    195



    195

    Gain on sale of Vernon,

         California facility

    —



    —



    —



    —



    —



    (86)



    (86)

    Insurance recoveries

    —



    —



    —



    —



    —



    (5)



    (5)

    Incremental costs from

         destruction of property

    —



    —



    —



    —



    —



    3



    3

    Adjusted operating

         profit (loss)

    $     1,066



    $        117



    $    (756)



    $           (4)



    $           (107)



    $               (56)



    $            258





























    Operating profit (loss)

         margin

    12.9 %



    1.5 %



    (22.8) %



    (0.8) %



    NM



    NM



    (0.4) %

    Adjusted operating profit

         (loss) margin

    12.9 %



    1.5 %



    (22.8) %



    (0.8) %



    NM



    NM



    1.8 %













    (1)

    Includes our Mexico and Bioscience operations.

    (2)

    Represents general corporate expenses for management and administration of the business.

    (3)

    Includes certain costs of sales, SG&A and operating gains that we do not allocate to our segments.

     

    Smithfield Logo (PRNewsfoto/Smithfield Foods, Inc.)

     

    Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/smithfield-foods-reports-strong-fourth-quarter-and-fiscal-year-2024-results-led-by-packaged-meats-segment-302409926.html

    SOURCE Smithfield Foods, Inc.

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