Smithfield Foods Reports 11% Sales Increase in Q2 2025, Net Income Declines

Smithfield Foods, Inc. reported a notable increase in financial performance for the second quarter of 2025, with total sales reaching $3.786 billion, a rise of 11% from $3.412 billion in the same period last year. The company's gross profit, however, decreased by 5.4% to $499 million, down from $527 million, primarily due to rising costs of sales, which increased by 14% to $3.288 billion. The operating profit also saw a decline of 22.2%, falling to $260 million compared to $334 million in the previous year. Net income from continuing operations attributable to Smithfield was $188 million, a decrease of 26.4% from $256 million in the prior year.

In the first half of 2025, Smithfield's total sales increased by 10.2% to $7.558 billion, up from $6.856 billion. The cost of sales also rose, but at a slower rate of 9.8%, leading to a gross profit increase of 13.4% to $1.008 billion. The company reported a net income from continuing operations of $415 million, reflecting an 11.8% increase from $372 million in the first half of 2024. The effective tax rate for the second quarter increased to 24.6%, up from 18.2% in the previous year, influenced by higher profitability and a settlement with state tax authorities.

Strategically, Smithfield has made significant operational changes, including the closure of its Elizabeth, New Jersey dry sausage production facility and the consolidation of production across its network. The company also announced the closure of satellite offices in Lisle, Illinois, and Kansas City, Missouri, moving operations to its headquarters in Smithfield, Virginia. These moves are part of a broader initiative to streamline operations and reduce costs. Additionally, Smithfield has engaged in partnerships with Murphy Family Farms and VisionAg to optimize its hog production operations, which is expected to enhance supply chain efficiency.

The company has also seen growth in its Hog Production segment, with sales increasing by 19.6% to $1.772 billion in the first half of 2025, driven by higher grain and feed sales. Smithfield's Packaged Meats segment reported a 4% increase in sales, while the Fresh Pork segment saw a 5% rise. The company continues to focus on product innovation and expanding its market presence, particularly in the packaged meats sector, which is supported by long-term consumer trends favoring high-protein diets.

Looking ahead, Smithfield maintains a strong liquidity position with $928 million in cash and cash equivalents and $2.297 billion available under its credit facilities. The company plans to invest between $400 million and $500 million in capital expenditures for 2025, focusing on automation and capacity expansion. Despite the challenges posed by rising commodity prices and ongoing litigation, Smithfield is optimistic about its growth strategies and operational efficiencies, which are expected to drive future profitability.