Smithfield Foods SFD.O, the biggest U.S. pork processor, raised its annual operating profit forecast on Tuesday after its hog business rebounded from losses last year.
The Virginia-based company’s sales and adjusted earnings in the three months to June 29 rose year on year, but its shares fell about 1% in early trading after a drop in quarterly operating profits at its packaged meats and fresh pork divisions. Smithfield, which went public in January, is an indirect, majority-owned subsidiary of Hong Kong-based WH Group 0288.HK.
Similar to peers in broader retail industry, Smithfield said in 2025 demand is cautious due to inflation, consumers have shifted their spending patterns and are increasingly looking for value.
Smithfield has reduced risks from owning livestock by raising fewer hogs itself and buying more from other producers. It has said it expects to produce about 11.5 million hogs this year, down from 14.6 million in 2024.
Livestock feed, often the biggest expense in raising hogs, has also become less expensive owing to low grain prices.
That business swung to a quarterly operating profit of $22 million from a $2 million loss a year earlier.
Smithfield projected total 2025 adjusted operating profit at $1.15 billion to $1.35 billion, compared with a previous forecast of between $1.1 billion and $1.3 billion.
Last week, rival Tyson Foods TSN.N, which produces pork, beef and chicken, raised its annual revenue forecast.
Smithfield said its fresh pork business, which processes hogs into meat, was navigating a “dynamic tariff environment.” Its operating profit plunged by 39% to $35 million on sales up 5% at $2.1 billion.
U.S. President Donald Trump’s tariff disputes have slowed export sales of agricultural goods, including meat.
For the first half of the year, U.S. pork exports were down 4% from 2024, with exports to China - the world’s biggest pork consumer - down 19%, U.S. government data shows.
“We navigated the China tariff disruption, minimizing the impact by selling into alternative countries and channels and subsequently resuming shipments to China,” CEO Shane Smith said on a post-earnings call.
Exports accounted for 13% of Smithfield’s total sales last year, 3% of which were to China, according to the company.
Total sales rose 11% to $3.79 billion in the quarter while adjusted net income edged up to 55 cents per share from 51 cents a year earlier.
