Smithfield Foods expects to swing to third-quarter operating loss in fresh pork business

On Tuesday, Smithfield Foods announced that its fresh pork division is projected to shift to an adjusted operating loss for the third quarter, citing sustained downward pressure from lower hog prices and a narrowing industry market spread in an environment of cautious consumer spending.

The company also guided to a year-over-year decline in adjusted operating profit for its hog production business during the current quarter, and its shares dropped nearly 2% in after-hours trading.

The following points outline the key expectations:

• Smithfield noted that declines in the USDA pork cutout and hog prices have compressed industry margins, leading to a more cautious assessment of segment profitability.

• CEO Shane Smith commented: "The change in our outlook is driven by external market conditions within portions of the pork value chain."

• For its fresh pork business—the company's second-largest revenue source—Smithfield now anticipates an adjusted operating loss of between $70 million and $90 million for the third quarter, versus a $10 million profit in the same period last year.

• In its hog production segment, the company projects quarterly adjusted operating profit of $25 million to $45 million, down from $89 million a year earlier.

• The company left its fiscal 2026 adjusted operating income forecast for packaged meats—its largest segment—unchanged at $1.08 billion to $1.15 billion.

• For the three months ending in September, total company adjusted operating income is expected to land between $115 million and $175 million, compared with $310 million in the year-ago period.

• Operating in a climate of cautious consumer spending, Smithfield also expressed disappointment over how commodity market dynamics are expected to affect its near-term results.

• Last month, the company reduced its full-year sales and adjusted operating profit guidance. Smithfield is scheduled to speak at the Barclays Global Consumer Conference on Thursday.