Smithfield Foods expects its fresh-pork division to report a third-quarter underlying operating loss of up to $90m amid "compression" in the sector.
The forecast of a $70-90m adjusted operating loss, issued yesterday (8 September), compares with a $10m adjusted operating profit in the third quarter of fiscal 2025.
In a statement, Smithfield said the outlook “reflects continued compression in the industry fresh pork market spread and lower hog prices”.
It added the “two external market developments have moved beyond the assumptions embedded in its prior outlook”, which was issued in August.
The US food company also lowered its expectations for its hog production division, which is expected to generate adjusted operating profit of $25m to $45m in the quarter. The division reported an $89m operating profit in the year-earlier quarter.
Smithfield expects its group third-quarter adjusted operating income of $115m to $175m. That compares with adjusted operating profit of $310m in the third quarter of fiscal 2025.
Packaged meats is performing in line with expectations.
Smithfield reaffirmed its full-year fiscal 2026 adjusted operating income guidance for the division at $1.08bn to $1.15bn, citing branded volume share gains and expanded distribution.
The company reported an adjusted operating profit from packaged meats of $226m in the third quarter of fiscal 2025.
Smithfield president and CEO Shane Smith said: “Our most important business segment, packaged meats, continues to perform well, gaining branded share and expanding distribution even as consumers remain cautious.
“The change in our outlook is driven by external market conditions within portions of the pork value chain.”
Smithfield has not changed its full-year fiscal 2026 guidance, which it last updated in August.
At that time, it forecast company adjusted operating profit of $1.22bn to $1.37bn, including $180m to $240m from fresh pork and $75m to $125m from hog production.
Smithfield said it will provide updated full-year guidance for Fresh Pork, Hog Production, and the total company when it reports third-quarter results.
