Smithfield Foods, Inc.

Good day and welcome to the Smithfield Foods third quarter 2025 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Julie McMeeden, Vice President of Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to Smithfield's third quarter 2025 earnings call. Earlier this morning, we announced our results. A copy of the release, as well as today's presentation, are available on our IR website, investors.smithfieldfoods.com. Today's presentation contains projections and other forward-looking statements that are being provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all comments reflecting our expectations, assumptions, or beliefs about future events or performance that do not relate solely to historical periods. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, the factors identified in the release in our annual report on Form 10-K, our quarterly reports on Form 10-Q, and our other filings with the Securities and Exchange Commission. The company undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or other factors. Please refer to our legal disclaimer on slide two of the presentation for more information. Today's presentation will also include certain non-GAAP measures, including but not limited to adjusted operating profit and margin, adjusted net income, adjusted earnings per share, and adjusted EBITDA. For reconciliation of these and other non-GAAP measures to the corresponding GAAP measures, please refer to our earnings press release and our slide presentation on our website. Finally, all references to retail volume and market share are based on CERCONA data. With me this morning are Shane Smith, President and CEO, Mark Hall, CFO, Steve Frantz, President of Packaged Meats, and Donovan Owens, President of Fresh Pork. I will now turn the discussion over to Shane. Shane?

Thank you, Julie. Good morning, everyone. I'm pleased to report that we delivered record third quarter adjusted operating profit of $310 million, which represents an 8.5% increase year over year and an adjusted operating profit margin of 8.3%. We achieved record third quarter results by delivering innovation, value, and convenience to our customers and consumers and through continued disciplined execution of our strategies. Our packaged meat segment achieved its second-highest third-quarter profit on record despite persistent higher raw material costs and a more cautious consumer spending environment. This underscores the power of our brand and private label portfolio strategy to deliver quality and value across all price points. Our packaged meat segment performance was driven by product mix improvements, our well-diversified portfolio of products and price points, new product innovation, and operating efficiencies. Our fresh pork segment was pressured by a compressed industry market spread, which was driven by higher hog prices. As a result, a portion of our fresh pork profits migrated to our hog production segment, but were retained within our pork operations due to our vertically integrated model. In the face of challenging market conditions for our fresh pork segment, I'm proud of our team for mitigating more than half of the year-over-year compression in the industry market spread. Additionally, Fresh Fork has been navigating a challenging tariff environment. To achieve the level of profitability that the segment has accomplished demonstrates our team's outstanding execution on all controllable aspects of the business, including optimizing the net realizable value of each hog and continuing to drive operational efficiencies. As I noted a moment ago, our hog production segment benefited from higher hog prices. Additionally, the team has tirelessly executed our strategy to improve operational performance and lower our raising cost. Our production segment adjusted operating profit more than doubled since last year as a result of more favorable markets coupled with the improvements on our retained farms. Now turning to our outlook for fiscal 2025, I'm pleased to report that we've raised the midpoint and tightened the range of our outlook for 2025 adjusted operating profit by staying true to our strategies and delivering on our commitments. Mark will share more details in a few minutes. Now I'll turn to our key growth strategies. Our five strategic growth priorities are as follows. Increased profits in our packaged meat segment through enhanced product mix, volume growth, and innovation. grow profits in our fresh pork segment by maximizing the net realizable value across channels, achieve a best-in-class cost structure in our hog production segment, optimize operations and deliver operating efficiencies in manufacturing, supply chain, distribution, procurement, and SG&A, and finally evaluate synergistic M&A opportunities across North America. First, in packaged meats. which is our largest and most profitable segment. Protein remains a growing category with quality protein representing a core staple in consumer diets. Consumers are also looking for value, convenience, and new flavors. Our packaged meat segment is delivering on each of these consumer preferences without sacrificing profitability. Our three-pronged strategy to grow packaged meat segment profit encompasses product mix improvements, volume growth, and innovation. First, product mix. We remain focused on continuing to improve our product mix, which enhances margins and drives unit velocity. A key driver of this strategy is to convert sales of our more commoditized heritage products, like large holiday hams, into increased units sales of higher margin products for everyday consumption, such as packaged lunch meat and quarter hams. Smithfield Prime Fresh Packaged Lunch Meat continues to win with both customers and consumers. Our premium lunch meat offering delivers the quality of freshly sliced deli meat without the weight. During the third quarter, while volume for the 6.3 billion packaged lunch meat category was down, Prime Fresh volume increased double digits, and we gained a full point of volume share versus the third quarter of 2024. This outstanding volume growth was driven by higher ACV and product innovation, and we see a long runway ahead. Our Smithfield Anytime Favorites quarter hams are another great example. Unlike large holiday hams, quarter hams are perfect for everyday family dinners. They are also a great value which consumers love. Smithfield Anytime Favorites quarter hams increase volume share by 5.7 points versus the third quarter of 2024. Another key component to unit sales growth is expanding our dry sausage offerings to capitalize on the popularity of pepperoni and salami. These products are growing faster than the packaged meats category as a whole and have higher margins. To position our dry sausage products with well-diversified price points, we market them under specialty brands like Margarita and Carondo, as well as value brands like Armour. During the third quarter, our total branded dry sausage category grew volume by nearly 8 percent versus the third quarter of 2024. Second is volume. We participate in 25 key package meat subcategories at retail, 10 of which are valued at over a billion dollars, and we see continued white space opportunities to grow volume and increase market share in each of these categories. Year-to-date through September 28th versus the same time period a year ago, we grew branded market share in six of these billion-dollar-plus categories. We are driving volume in today's economy by delivering quality protein at a good value. Our portfolio of quality branded products spans multiple categories and price points and is an important competitive advantage for Smithfield. We are attracting and retaining consumers within our branded portfolio, even as they trade up and down the value spectrum. Value seekers are also turning to private label, which is a key competitive advantage for us. Retailers and food service operators look to us as a trusted partner who consistently and reliably deliver high-quality products at scale. Over the past several years, we have improved private label profitability, which represents just under 40% of our retail channel sales. Another great example of delivering value is in the sausage category, which spans all day parts. With an average retail price per pound of $4.23, our sausage offerings help today's consumers get their protein cost-effectively. Our sausage offerings collectively grew volume by 2.9% in the third quarter versus the third quarter of last year. In addition to delivering value, we are driving volume by investing behind our brands with direct-to-consumer advertising and by executing effective trade promotion. During the third quarter, our Smithfield brand launched a new We Speak Fork national advertising campaign. For decades, Smithfield has set the standard for quality and craftsmanship in pork. The new campaign is already driving positive engagement across digital and social platforms and helping us reach younger audiences with a focus on millennials and Gen Z shoppers. Beyond awareness, we are seeing early indications of stronger purchase intent and improved brand affinity. Earlier this year, we launched a new campaign for our Eckridge National brand-themed Eckridge, the sausage that takes you home. We are also proud to continue our partnership with the College Football Playoffs Foundation and its Extra Yard for Teachers initiative for the 2025-2026 season. Our brand-building efforts are showing returns. Eckridge cooked dinner sausage volume increased 7.8%, versus the third quarter of 2024, which was more than five times the category growth. Next, product innovation. Innovation is an important pillar of our Package Meets Growth strategy. We continuously develop new concepts to address emerging consumer trends. These new products target consumers through line extensions of our trusted brands, new flavors, and more convenient packaging and sizing options. On October 1st, we launched our Smithfield Mike's Hot Honey Bacon, a sweet heat innovation that merges our signature honey smoked bacon with Mike's Hot Honey's iconic flavor. The product taps into the fast-growing sweet heat trend and strengthens our connection with younger consumers. It also serves as a strong proof point of how Smithfield is modernizing the category and driving brand relevance through innovation. This exciting new launch is the spotlight of Smithfield's We Speak Fork brand campaign. Another great example of an innovative product that aligns with evolving consumer preference for new flavors is our Curley's Ready in Minutes Barbecue Meals. Curley's is the number three brand in refrigerated barbecue meats and enjoyed the number one year-over-year volume share increase during the third quarter at 1.4 points. The growth for Curly's is being aided by innovation from our new world flavors, such as Korean barbecue pulled pork, chimichurri pork carnitas, and Thai sweet chili pulled chicken. Innovation is also a key driver of our 13.5% increase in food service sales into third quarter versus the third quarter of last year. Despite high food away from home inflation, our innovative new offerings are attracting food service customers. Year-to-date, our food service sales increased over 10%, with 3% volume growth. Key food service innovations include our Smithfield ready-to-eat bacon, as well as 55 new limited-time offers. We have introduced a cross-value-added package meets categories. We are giving customers and consumers reasons to keep coming back. In summary, our packaged meat segment is successfully driving volume and profitability by improving our product mix, offering value, building brand awareness, and delivering on product innovation. Now let's talk about our second core growth strategy, increasing our fresh pork segment profitability. We are focused on growing fresh pork operating profit by maximizing the net realizable value of each hog and driving best-in-class operating efficiency. A key to effective whole hog utilization is developing multiple channels as outlets for our fresh pork products and operating with agility across these channels. The execution of our strategy is why our third quarter results outpace the significant compression in industry market spread. At a time when volume in consumer staples is challenged, our fresh pork segment delivered 5% volume growth in the U.S. retail channel. This was driven by consumers' desire for quality protein in their diets. We saw U.S. retail profit enhanced by value-added case-ready items. We also increased profitability in our pet food and pharmaceutical channels. These channels offer alternatives to certain export markets for some of our products. Our fresh pork segment continue to deliver operating efficiencies and cost savings, which also help mitigate the impact of the compressed market spread on segment profitability. Now to our strategy to optimize our hog production segment. I'm proud of the team's work to achieve a best-in-class cost structure on our retained farms. Over the past several years, we have sold underperforming farms and improved our genetics, our nutrition and feed procurement, and herd health. While we still have work to do, we are pleased with our progress to date, and we are already demonstrating the power of our vertically integrated model with our more streamlined hog production operations. Improved sow productivity and feed conversion are key contributors to our cost savings versus last year. we still have more room to benefit from continued optimization. We expect our raising costs will continue to trend lower from the benefit of our reform measures and our genetics and overall herd health initiatives. This year, our hog production segment is on track to produce under 11.5 million hogs, which represents about 40% of our fresh pork segment's processing needs. Over the medium term, we remain focused on actively resizing our business to reduce to approximately 30% the number of pods we produce ourselves. We believe this will provide a sufficient, assured supply of high-quality raw materials to our fresh pork segment while reducing the impact of commodity fluctuations on our consolidated results. Next, our strategy to optimize operations and deliver operating efficiencies in manufacturing, supply chain, distribution, procurement, and SG&A. Each year, we look for cost savings to offset inflation. We also dedicate a large portion of our capital investments toward automation, waste elimination, and throughput maximization. Automation has enabled us to redeploy labor to higher value activities, as well as to reduce our overall labor count. We also continue to refine and optimize our transportation and logistics activities. Through these strategies, we continue to lower our overall operating costs. Finally, we continue to evaluate opportunistic M&A in North America to support our growth strategies. We will remain disciplined in evaluating complementary and synergistic opportunities for our package meets business. In summary, we delivered a record third quarter result through solid execution across all segments. Our packaged meat segment is demonstrating resilience in today's market, underscoring our ability to grow share and expand profitability over the long term. Our fresh pork and high production segments support the packaged meat segment with an assured supply of quality protein. And our disciplined operating approach continues to help us navigate a dynamic macro environment. With that, I will turn it over to Mark to review our financials in more detail.