Smithfield Foods expects growth in sales, profit on strong packaged meats demand
(Reuters) - Smithfield Foods forecast growth in annual sales and adjusted operating profit on Tuesday, helped by strong demand for its packaged meats at grocery stores and benefits from its cost-cutting measures.
The company reported its first quarterly results since going public in January, having been spun-off from the world's largest pork producer WH Group.
Smithfield has shifted toward buying more of the hogs it processes, rather than owning them, which helped in reducing input costs at a time when global demand tempered and costs of raising livestock went up.
The Virginia-headquartered company told Reuters in January it does not plan to close more U.S. pork plants, after it closed its facility in Vernon, California and another in Charlotte, North Carolina in 2023.
It also stands to benefit from focusing on its packaged meats portfolio instead of its hog production business as consumers look to make more nutritious meals at home.
Sales in the packaged meats segment, which accounts for nearly 59% of the company's total sales, rose 2.2% from a year earlier in the fourth quarter.
The company expects fiscal 2025 adjusted operating profit to be between $1.10 billion and $1.30 billion, the mid-point of which is above the $1.12 billion it reported for the 12 months ended December 29, 2024.
While Smithfield warned of tariff risks in its initial public offering prospectus, President Donald Trump's administration said last week it plans to permanently allow U.S. pork and poultry plants to operate more quickly after some were previously given waivers to increase processing line speeds.
Smithfield expects total annual net sales to rise in the low to mid-single-digit percentage range, compared with a 3.4% fall reported in fiscal 2024.
In the fourth quarter, the company's total sales fell 1.2% to $3.95 billion and the company reported a profit per share of 54 cents compared with a loss of 25 cents a year earlier.
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