SFD 10-K & 10-Q changes, risk factors and insider trading
Smithfield Foods Inc. · Nasdaq · Meat Packing Plants · CIK 91388 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We may be impacted by legislation targeting foreign ownership of land, or foreign ownership or operation of facilities, located in the U.S.”
Largest changes
“The U.S. has recently signaled its intention to change U.S. trade policy, including potentially renegotiating or terminating existing trade agreements and leveraging tariffs. For example, the current U.S. administration recently announced the implementation of a 25% additional tariff on imports from Canada and Mexico and a 20% additional tariff on imports from China. In response to the U.S. tariffs, China, Canada and Mexico each announced plans to put in place their own tariffs on American products. …”see in full comparison
“The U.S. has recently implemented significant changes to its trade policy, including renegotiating or terminating existing trade agreements and threatening and/or imposing new or additional tariffs on certain countries with which the U.S. has the largest trade deficits, including China. Either in response to U.S. actions or on their own initiative, China and other countries have imposed their own new and additional tariffs on products shipped from the U.S. …”see in full comparison
“An increasing number of states and the federal government are proposing or adopting legislation and/or regulations that prohibit or limit entities directly or indirectly controlled by individuals or entities based in the PRC, the Special Administrative Regions Hong Kong and Macau, and other jurisdictions deemed national security threats to the U.S., from acquiring or owning an interest in private agricultural land within the boundaries of the state, or pursuant to federal law. …”see in full comparison
In addition, developments or changes in the regulatory environment may have a material impact on our business. For example,see in full comparisonPresident Biden issuedan executive order issued in July 2021that, among other things,directed federal agencies to enforce antitrust laws more vigorouslythanandpastanadministrations,executivewhichordermay,issuedamonginotherDecemberthings,2025makedirectedacquisitionthetransactionsJusticemoreDepartmentchallenging.and Federal Trade Commission to pursue antitrust investigations across the food supply sector. As a subsidiary of a public company based outside of the U.S., we may also face heightened scrutiny in respect of potential acquisition transactions. See the section titled “Item 1. Business—Quality Assurance and Food Safety—Regulation” for further information on the regulations to which we are subject.
As a public company, we have significant requirements for enhanced financial reporting and internal controls. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environment, and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements, and harm our results of operations.see in full comparisonIn addition, we will be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting beginning with our second annual report. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business.
We are involved on an ongoing basis in litigation arising in the ordinary course of business or otherwise. For example, we have been named as one of 16 defendants in a series of purported class actions alleging antitrust violations in the pork industry. The plaintiffs in all of these cases also challenge the defendant pork producers’ use of benchmarking reports from defendant Agri Stats, Inc., alleging that the reports allowed the pork producers to share proprietary information and monitor each producer’s compliance with the supposed agreement to reduce supply. Payments in an aggregated amount of $194 million were made by us to settle all class claims against us by the direct purchasers, commercial and institutional indirect purchasers and consumer indirect purchasers. In addition to the class actions, we have been named as a defendant in similar claims and suits brought by a number of individual purchasers who opted out of their class and three states or commonwealths. We have entered into negotiations with many of these claimants and have settled certain of the pending non-class cases and related claims. Currently,see in full comparison2214 opt-out casesand one case by the State of New Mexicoremain pending against us. In addition, in July 2025, the Company received a civil investigative demand from the Attorney General for the state of Washington seeking information related to this antitrust litigation.
Full comparison: every changed paragraph (62)
•We are increasingly dependent on information technology,IT, and our business and reputation could suffer if we are unable to protect our information technologyIT systems against, or effectively respond to, cyberattacks, other cyber-incidents or security breaches or if our information technologyIT systems are otherwise disrupted.
•We may be impacted by legislation targeting foreign ownership of land, or foreign ownership or operation of facilities, located in the U.S.
•WH Group controls us, and their interests may conflict with ours or yours in the future.
•Our indebtedness could adversely affect our business, financial condition, and liquidity by limiting our ability to service debt, exposing us to interest rate risk on variable-rate borrowings, and permitting additional indebtedness that could further increase our financial leverage and related risks.
•Changes in relations between the U.S. and the People’s Republic of China (“PRC”), or in U.S. regulations concerning the PRC, may adversely impact our business, financial condition, results of operations, our ability to raise capital or the market price of our common stock.
•Failure to comply with requirements to design, implement, and maintain effective internal controls could have a material adverse effect on our business and stock price.
•We expect to continue paying regular dividends to our shareholders, but our ability to do so is subject to the discretion of our board and may be limited by our financial condition, our credit facilities, the indentures governing the notes we previously issued and applicable law.
Profitability in our industry is materially affected by the commodity prices of animal feed ingredients, such as grain, corn and soybean meal and wheat. The production of feed ingredients is positively or negatively affected due to various factors, primarily by the global level of supply inventories and demand for feed ingredients, the agricultural policies of the U.S. and other countries and weather patterns and climatic conditions throughout the world. Market prices for feed ingredients remain volatile. High prices for animal feed ingredients may have a material adverse effect on our operating results. In addition, geopolitical conflicts or other disruptions affecting global energy markets may increase fuel and transportation costs and may also contribute to higher prices for feed ingredients and other agricultural inputs. A significant decrease in pork prices for a sustained period of time could have a material adverse effect on our consolidated sales.
We attempt to manage certain of these risks through the use of our risk management and hedging programs. However, we may not be effective in doing so and, in any case, these programs may also limit our ability to realize gains from favorable commodity fluctuations. Additionally, a portion of our commodity derivative contracts are marked-to-market, such that the unrealized gains and losses are reported in earnings as incurred. This accounting treatment may cause significant volatility in our earnings. See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” and “Note 8: Derivative Financial Instruments” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for the effects of derivative instruments on our consolidated statements of income.
In addition, we rely on specific suppliers for the provision of certain ingredients and materials, including sodium for our hogs and sourcing of carbon dioxide. We purchase most of the seasonings for our Packaged Meats segment from a single company, Saratoga, with which we have entered into an exclusivity agreement regarding such seasonings. Saratoga also has a right of first refusal to supply us with any new seasoning or sauce products we need. We believe that we carry sufficient inventory of finished product and seasonings to overcome an interruption in the supply of seasonings from Saratoga; however, this may not be the case if alternate sources are unavailable or inadequate.
In addition, we rely on specific suppliers for the provision of certain ingredients and materials, including sodium for our hogs and sourcing of carbon dioxide. Any disruption in supply of ingredients or materials could affect our ongoing operations and our ability to fulfill demand. A disruption in our supply chain may require significant costs and resources to restore and may also force us to buy material at higher prices, which can substantially increase our costs. We may not be able to pass on all or part of the increased costs to customers in the form of price increases, in a timely manner or at all. Even if we are able to increase our selling prices, sustained price increases for our products may lead to sales declines and loss of market share, particularly if our competitors do not increase their prices.
Although we regularly conduct research and developmentR&D activities to develop new products that meet our standards for quality and appeal to consumer preferences, the success of our innovation and product development efforts is affected by our ability to anticipate changes in consumer preferences, the technical capability of our employees in developing and testing product prototypes, our ability to comply with applicable governmental regulations, and the success of our management, sales and marketing teams in introducing and marketing new products, including through current and new product categories.
Some of our competitors have greater scale, marketing resources, name recognition, research and developmentR&D capabilities and/or other resources (financial and otherwise) than we do, and some of the companies may be more innovative and able to bring new products to market faster and more quickly exploit and serve niche markets or new or burgeoning consumer preferences than us.
We rely on third-party service providers for many areas of our business, including transportation and cold storage. Failure by these third parties, including independent growers, to meet their contractual, regulatory and other obligations to us, or our failure to adequately monitor their performance, have in the past resulted in and could in the future result in additional costs to remediate errors made by such service providers. Depending on the function involved, such errors have in the past led to and can in the future lead to business disruption, systems performance degradation, processing inefficiencies or other systems disruptions, the loss of or damage to intellectual property or sensitive data through security breaches or otherwise, incorrect or adverse effects on financial reporting, litigation or remediation costs,costs and damage to our reputation, all of which can adversely affect our business. For example, should the refrigeration system fail at one of our third-party cold storage facilities, we could suffer the loss of some, or all, of our inventory. Should our contract manufacturers go out of business or suffer major equipment failure, we may lose the ability to produce sufficient quantities of our products for a period of time before establishing production with a new manufacturer. Any number of similar failures suffered by our service providers could prove damaging to our ongoing operations and our ability to fulfill demand.
We are increasingly dependent on information technology,IT, and our business and reputation could suffer if we are unable to protect our information technologyIT systems against, or effectively respond to, cyberattacks, other cyber-incidents or security breaches or if our information technologyIT systems are otherwise disrupted.
Information technologyIT is an important part of our business operations, and we increasingly rely on information technologyIT systems to manage business data and increase efficiencies in our production and distribution facilities and inventory management processes. We also use information technologyIT to process financial information and results of operations and to comply with regulatory, legal and tax requirements. In addition, we depend on information technologyIT for digital marketing and electronic communications among our facilities, personnel, customers and suppliers. Like other companies, our information technologyIT systems are vulnerable to a variety of disruptions, including, but not limited to, the process of upgrading or replacing software, databases or components thereof, natural disasters, terrorist attacks, telecommunications failures, computer viruses, cyberattacks, hackers, unauthorized access attempts and other security issues. Cyberattacks and other cyber-incidents are occurring more frequently, constantly evolving in nature, becoming more sophisticated and being made by groups and individuals with a wide range of motives and expertise. In particular, cyberattacks are increasingly utilizing artificial intelligence, making them more complex and harder to detect and defend against. Our security initiatives and disaster recovery plans to mitigate our exposure to these risks may not be adequate. Any significant failure of our systems, including failures that prevent our systems from functioning as intended or our failure to timely identify or appropriately respond to cyberattacks or other cyber-incidents, could cause transaction errors, processing inefficiencies, loss of customers and sales, have negative consequences on our employees and our business partners, have a negative impact on our operations and business reputation and expose us to liability, litigation and regulatory enforcement actions.
In addition, targeted cyberattacks or those that result from a security incident directed at a third-party vendor that we rely on have in the past created and can in the future create a risk of compromise to our internal systems, products and offerings, which have in the past resulted in and could in the future result in interruptions or delays that could disrupt our business operations. If our supply chain cybersecurity is compromised as a result of third-party action, employee error, malfeasance, stolen or fraudulently obtained log-in credentials or otherwise, our business may be harmed and we could incur significant liabilities. For example, we were informed by the third-party provider for our previously hosted consumer facing website that a security incident occurred on the third-party website hosting provider’s information technology (“IT”) systems in which an unauthorized party obtained certain information about certain of our customers who made purchases on its websites.
The costs to address cybersecurity risks or risks on information technologyIT failure, both before and after an incident, have in the past been and could in the future be significant, regardless of whether incidents result or resulted from an attack on us directly, or on third-party vendors upon which we rely. If we are unable to prevent security breaches, we may suffer financial and reputational damage or penalties because of the unauthorized disclosure of confidential information belonging to us or to our business partners, customers, consumers or suppliers. Finally, the disclosure of non-public information through external media channels could lead to the loss of intellectual property or damage our reputation and brand image. Any such incidents could subject us to government investigations and regulatory enforcement actions, litigation, potential liability, and damage to our brand and reputation or otherwise harm our business and operations.
We export our products to over 30 countries, including China, and we are engaged in a joint venture in Mexico. For the fiscal year ended December 29, 2024,2025, U.S. export sales accounted for 13%11% of our total sales. Because of the growing market share of U.S. pork products in the international markets, U.S. exporters are increasingly being affected by measures taken by importing countries to protect local producers.
•investigations or enforcement actions by foreign governments in jurisdictions where we do business related to alleged unfair trade practices;
The U.S. has recently implemented significant changes to its trade policy, including renegotiating or terminating existing trade agreements and threatening and/or imposing new or additional tariffs on certain countries with which the U.S. has the largest trade deficits, including China. Either in response to U.S. actions or on their own initiative, China and other countries have imposed their own new and additional tariffs on products shipped from the U.S. As of December 28, 2025, products we export to China faced tariffs that ranged from 25% to 47%, with most products subject to 47% tariff rates. If China were to significantly increase the tariff rates imposed on our products, whether in response to similar action by the U.S. or otherwise, we may have to reduce or even cease selling our products in China.
The U.S. has recently signaled its intention to change U.S. trade policy, including potentially renegotiating or terminating existing trade agreements and leveraging tariffs. For example, the current U.S. administration recently announced the implementation of a 25% additional tariff on imports from Canada and Mexico and a 20% additional tariff on imports from China. In response to the U.S. tariffs, China, Canada and Mexico each announced plans to put in place their own tariffs on American products. However, on March 6, 2025, President Trump announced that the proposed tariffs on imported goods from Canada and Mexico that are covered by the United States-Mexico-Canada Agreement will be suspended until April 2, 2025. China has responded by imposing an additional 15% tariff on U.S. chicken, wheat, corn and cotton products and an additional 10% tariff on pork, among other products, increasing the tariff rate on U.S. pork going into China from 37% to 47%.
We cannot predict future trade policy and regulations in the U.S. and other countries, the terms of any renegotiated trade agreements or treaties, or tariffs and their impact on our business. AContinuation of or escalations in trade wartension could have a significant adverse effect on world trade and macroeconomic markets at large. To the extent that trade tariffs and other restrictions imposed by the U.S. or other countries increase the price of, or limit the amount of, our products or raw materials used in our products imported into the U.S. or other countries, or create adverse tax consequences, the sales, cost or gross margin of our products may be adversely affected and the demand from our customers for products may be diminished. Uncertainty surrounding international trade policy and regulations as well as disputes and protectionist measures could also have an adverse effect on consumer confidence and spending.
As of FebruaryDecember 28, 2025, we had approximately 34,00032,000 employees in the U.S. and approximately 2,500 in Mexico, with approximately 46%44% of our total workforce covered by collective bargaining agreements or are members of labor unions. Our operations depend on the availability, retention and relative costs of labor and maintaining satisfactory relations with employees and the labor unions. Further, employee shortages can and do occur, particularly in rural areas where some of our operations are located. Labor relations issues arise from time to time, including issues in connection with union efforts to represent employees at our plants and with the negotiation of new collective bargaining agreements. If we fail to maintain satisfactory relations with our employees or with the labor unions, we may experience labor strikes, work stoppages or other labor disputes. Negotiation of collective bargaining agreements also could result in higher ongoing labor costs.
Goodwill is the excess amount of purchase consideration over the fair value of net assets acquired in a business combination. In evaluating the potential for impairment of goodwill, we make assumptions regarding future operating performance, business trends, and market and economic conditions. Such analyses further require us to make judgmental assumptions about sales, operating margins, growth rates, and discount rates. There are inherent uncertainties related to these factors and to management’s judgment in applying these factors to the assessment of goodwill recoverability. Goodwill reviews are prepared using estimates of the fair value of reporting units based on market multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”) and/or on the estimated present value of future cash flows. For indefinite life intangible assets, an impairment loss is recognized if the carrying amount of an indefinite life intangible asset exceeds the estimated fair value of that intangible asset. Identified intangible assets with definite lives are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.
In addition, our equity investments in joint ventures, partnerships and other entities, both within and outside the U.S., are periodically involved in modifying and amending their credit facilities and loan agreements. The ability of these entities to refinance or amend their facilities on a successful and satisfactory basis, and to comply with the covenants in their financing facilities, affects our assessment of the carrying value of any individual investment. As of December 29,28, 2024,2025, none of our equity investments represented more than 5% of our total consolidated assets. If we determine in the future that an investment is impaired, we would be required to record a non-cash impairment charge, which could substantially affect our reported earnings in the period of such charge. In addition, any such impairment charge would negatively impact our financial ratios and could limit our ability to obtain financing in the future. See “Note 9: Equity Method Investments” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a discussion of the accounting treatment of our equity investments.
We utilize intellectual property in our business. Our registered and unregistered trademarks are valuable assets that reflect the goodwill of our brands and consumers’ favorable perception of our products. We have invested a significant amount of money in establishing, promoting and protecting our brands. We also rely on patented and unpatented proprietary methods, processes and techniques in our manufacturing operations and copyright protection in our sales and marketing materials to develop and maintain our competitive position. Our continued success depends, to a significant degree, upon our ability to protect and preserve our intellectual property rights. In certain jurisdictions, we receive access to third-party intellectual property. In particular, we have a license agreement with Nathan’s Famous for the exclusive right to manufacture, distribute, market and sell “Nathan’s Famous” branded hot dogs and sausages in refrigerated consumer packages to be resold through retail channels within the U.S. until March 2032. We have entered into a merger agreement to acquire all of the outstanding shares of Nathan’s, but we cannot assure you that we will be able to satisfy the conditions necessary to complete that acquisition, including obtaining the approval of CFIUS. If we are unable to complete the acquisition of Nathan’s, we cannot assure you that we will be able to maintain or renew the license agreement with Nathan’s Famous or enter into new license agreement with third-party owners of intellectual property on reasonable terms, or at all.Nathan’s, We also license certain of our trademarks and other intellectual property for use by third parties. In an effort to preserve our trademark rights, we enter into license agreements with these third parties that govern the use of our trademarks and contain limitations on their use. We cannot assure you that our efforts to police the use of our trademarks by our licensees will be sufficient to ensure that our licensees abide by the terms of their licenses. In the event that our licensees fail to do so, our trademark rights could be diluted.
We are subject to federal, state, and local tax laws and regulations in the U.S. The application and interpretation of these laws in different jurisdictions affect our operations in complex ways and are subject to change, and some changes may be retroactively applied. Our future effective tax rates and the value of our deferred tax assets and liabilities could be adversely affected by changes in tax laws. Furthermore, the European carve-out may result in incremental tax liability to us. The U.S. and U.S. states and localities are also actively considering changes to existing tax laws that, if enacted, could increase our tax obligations or require us to change the manner in which we operate our business. For more information on the European carve-out, see “Note 3: Discontinued Operations” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
In addition, developments or changes in the regulatory environment may have a material impact on our business. For example, President Biden issued an executive order issued in July 2021 that, among other things, directed federal agencies to enforce antitrust laws more vigorously thanand pastan administrations,executive whichorder may,issued amongin otherDecember things,2025 makedirected acquisitionthe transactionsJustice moreDepartment challenging.and Federal Trade Commission to pursue antitrust investigations across the food supply sector. As a subsidiary of a public company based outside of the U.S., we may also face heightened scrutiny in respect of potential acquisition transactions. See the section titled “Item 1. Business—Quality Assurance and Food Safety—Regulation” for further information on the regulations to which we are subject.
A number of states have adopted legislation that prohibits or restricts the ability of meat packers, or in some cases corporations generally, from owning livestock or engaging in farming. In addition, the U.S. Congress has in the past consideredconsidered, and may in the future consider, federal legislation that would banrestrict or prohibit meat packers from owning livestock.livestock or otherwise participating in certain livestock production activities. For example, legislation recently has been proposed in Congress that would impose additional restrictions on meat packer ownership of certain livestock or vertical integration within the meat industry. We cannot assure you that such or similar legislation affecting our operations will not be adopted at the federal or state levels in the future. Such legislation, if adopted and applicable to our current operations and not successfully challenged or settled, could have a material adverse impact on our operations and our financial statements.
An increasing number of states are proposing or adopting legislation that prohibits or limits entities directly or indirectly controlled by individuals or entities based in the People’s Republic of China (“PRC”) from acquiring or owning an interest in private agricultural land within the boundaries of their state. In some cases, the adopted or proposed legislation goes beyond private agricultural land to include any land, meaning land on which we currently maintain production plants or other facilities could be covered by the legislation. We cannot assure you that such or similar legislation affecting our operations will not be adopted in additional states in the future. Such legislation, if adopted and applicable to our current operations and not successfully challenged or settled, could require us to divest land that is critical to our operations and could have a material adverse impact on our operations and our financial statements.
In addition, the State of California enacted the Farm Animal Confinement Initiative (“Proposition 12”),12, which became enforceable on July 1, 2023. Proposition 12 prohibits the sale within the state of certain uncooked pork produced from breeding sows or their offspring unless the animals have been housed in confinement systems that meet certain minimum standards and other conditions are met. Similarly, Massachusetts Question 3 prohibits the sale of certain pork products within the State of Massachusetts, as well as the shipment of certain pork products through the state, unless the products came from animals that were also housed in confinement systems that meet certain minimum standards. Our sales into California and into or through Massachusetts accounted for approximately 6% of our consolidated sales for the year ended December 29,28, 2024,2025, and approximately 17%19% of those sales into California and into or through Massachusetts were subject to either Proposition 12 in California or Question 3 in Massachusetts.
We may be impacted by legislation targeting foreign ownership of land, or foreign ownership or operation of facilities, located in the U.S.
An increasing number of states and the federal government are proposing or adopting legislation and/or regulations that prohibit or limit entities directly or indirectly controlled by individuals or entities based in the PRC, the Special Administrative Regions Hong Kong and Macau, and other jurisdictions deemed national security threats to the U.S., from acquiring or owning an interest in private agricultural land within the boundaries of the state, or pursuant to federal law. In some cases, the adopted or proposed legislation or regulation goes beyond private agricultural land to include any land, including land on which we currently maintain production plants or other facilities. For example, the State of Indiana has enacted legislation that will be effective on July 1, 2026 that prohibits companies owned or controlled directly or indirectly by individuals domiciled in the PRC or majority owned by such individuals, from purchasing or otherwise acquiring an interest in real property in Indiana other than pursuant to a lease with not more than a two-year duration. In addition, there have been preliminary legislative proposals in Congress that seek to regulate the operations of certain foreign-owned entities. More recently, additional legislative proposals have been introduced in Congress that would impose restrictions on foreign ownership of U.S. meat packing companies or other participants in the U.S. agricultural supply chain. We cannot assure you that federal or state legislation and/or regulation impacting our ownership of land, or ownership and operation of facilities, will not be proposed or enacted in the future. We currently own 87,000 acres of land in the U.S. (having sold over 40,000 acres in 2024 and 2,500 acres in 2025) on which many of our production, processing and distribution facilities are located. Such legislation or regulation, if adopted and applicable to our current operations, including such facilities, and not successfully challenged, could require us to divest land or operations that are critical to our business, which would have a material adverse impact on our operations and our financial statements going forward.
We are involved on an ongoing basis in litigation arising in the ordinary course of business or otherwise. For example, we have been named as one of 16 defendants in a series of purported class actions alleging antitrust violations in the pork industry. The plaintiffs in all of these cases also challenge the defendant pork producers’ use of benchmarking reports from defendant Agri Stats, Inc., alleging that the reports allowed the pork producers to share proprietary information and monitor each producer’s compliance with the supposed agreement to reduce supply. Payments in an aggregated amount of $194 million were made by us to settle all class claims against us by the direct purchasers, commercial and institutional indirect purchasers and consumer indirect purchasers. In addition to the class actions, we have been named as a defendant in similar claims and suits brought by a number of individual purchasers who opted out of their class and three states or commonwealths. We have entered into negotiations with many of these claimants and have settled certain of the pending non-class cases and related claims. Currently, 2214 opt-out cases and one case by the State of New Mexico remain pending against us. In addition, in July 2025, the Company received a civil investigative demand from the Attorney General for the state of Washington seeking information related to this antitrust litigation.
The U.S. and many non-U.S. jurisdictions have laws designed to protect national security or to restrict foreign direct investment. In the U.S., the Committee on Foreign Investment in the U.S. (“CFIUS”) has the authority to review transactions that afford foreign investors the ability to “control” a U.S. business, as well as certain non-controlling investments. If CFIUS identifies a national security risk arising from a particular transaction, it can impose mitigation measures and can also intervene to prohibit the transaction or order a divestment if the transaction has already closed. Many non-U.S. jurisdictions restrict foreign investment in assets important to national security by taking steps including, but not limited to, placing limitations, restrictions or conditions on foreign equity investment, implementing investment screening or approval mechanisms and restricting the employment of foreigners as key personnel. These U.S. and foreign laws could limit our ability to invest in certain businesses or joint ventures or impose burdensome notification requirements, operational restrictions or delays in pursuing and consummating transactions.
Certain of our acquisitions or investments may be subject to review and approval by CFIUS or any non-U.S. equivalents thereof based on our ownership structure and scope of operations. We also may seek approval from CFIUS even where not technically required, as we have done for our proposed acquisition of Nathan’s. This may have outsized impacts on transaction certainty, timing, feasibility and cost, and could prevent us from maintaining or pursuing acquisition or investment opportunities that we otherwise would have maintained or pursued. CFIUS or any non-U.S. equivalents thereof may seek to impose limitations, conditions or restrictions on or prohibit one or more of our acquisitions or investments, which may adversely affect our flexibility in structuring or financing certain acquisition transactions. In addition, CFIUS is actively pursuing transactions that were not notified to it voluntarily and may ask questions regarding, or impose restrictions, conditions or limitations on, transactions post-closing. Although CFIUS reviews (and in some cases mitigates) foreign investment originating from various countries, it has placed significant focus on reviews involving investors either directly or indirectly controlled by individuals or entities based in the PRC. As a result, acquisitions or investments undertaken by us could be subject to heightened CFIUS scrutiny compared to acquisitions or investments made by other foreign investors. These risks have increased and may continue to increase due to geopolitical, policy or regulatory developments, particularly with regard to U.S.-PRC relations. On February 21, 2025, President Trump issued a National Security Memorandum on America First Investment Policy directing CFIUS to impose greater scrutiny on acquisitions or investments by PRC-affiliated persons, including a call to “restrict PRC-affiliated persons from investing in U.S. technology, critical infrastructure, healthcare, agriculture, energy, raw materials or other strategic sectors.”
In addition, new environmental issues could arise that would cause currently unanticipated investigations, assessments or expenditures. U.S. federal, international, state and local authorities may, from time to time, adopt revisions to environmental rules and regulations with which we must comply. New or more stringent laws or regulations that impose additional requirements on our operations or on us could increase the cost of doing business for us. For example, in January 2024, the EPA published draft revised Effluent Limitations Guidelines (“ELGs”) for wastewater discharges of meat and poultry facilities. The draft proposal includesincluded a number of options for revised ELGs that the EPA iswas evaluating. For existing direct dischargers of wastewater, including meat processors such as us, the EPA’s preferred option is the imposition of more stringent effluent limitations for nitrogen and ammonia and, for the first time, limitations for phosphorus. This option would also establish, for the first time, pretreatment standards for oil and grease, total suspended solids and biochemical oxygen demand for these dischargers. In addition,While the EPA is proposing an amendment to add E. coli bacteria limitations for direct dischargers. Another optionwithdrew the EPAproposed ELGs in August 2025, litigation challenging this action is considering would extend the nitrogen and phosphorus limitations to indirect dischargers, which would also cover many of our facilities.ongoing.
The EPA conducted a number of public hearings on the proposed ELGs in January and March 2024. It is unclear when the EPA will issue final ELGs or to what extent they will differ from what the EPA has proposed. In addition, the new U.S. administration may elect to change, or abandon, the ELGs. Significant upgrades related to our direct and indirect wastewater discharge streams, including to treatment systems at our Sioux City and Denison, Iowa, Sioux Falls, South Dakota and Tar Heel, North Carolina centers,facilities, would be required to meet the standards asthat were proposed, which we estimate would require material capital expenditures in the aggregate.
The increasing concern over climate change also has resulted and may continue to result in more state, regional, federal, and/or global legal and regulatory requirements including changes to energy policies, increased mandatory climate-related disclosure, carbon pricing regulations or carbon taxes. For example, in March 2024 the SEC published its final rules to enhance and standardize climate-related disclosures, requiring covered entities, including us, to disclose certain climate-related metrics and GHG emissions data, information about climate-related targets and goals and climate-related risks and obtain attestation requirements. The rules arewere currentlysubsequently stayedwithdrawn pending the resolution of litigation challenging the rules, althoughby the new administration has stated that it will deliberate and determine appropriate next steps in light of the new administration’s position.administration. At this time, we cannot predict the costs of implementation or any potential adverse impacts resulting from the newsimilar rules, should they be proposed and become effective. However, we may incur increased costs relating to the assessment and disclosure of climate-related risks and targets. We may also be subject to increased litigation risks related to disclosures made pursuant to any federal or state reporting requirements or voluntary climate-related reporting, which could materially and adversely affect our future results of operations and financial condition.
Collecting, measuring and analyzing information relating to our GHG emissions or impacts of climate change on our business is costly, time-consuming, and dependent on third-party cooperation and such information may ultimately be unreliable. Furthermore, methodologies for measuring, tracking and reporting on such matters are evolving, and may be ambiguous and subject to rapid change, which may require our processes, benchmarks, baselines and controls for such data to evolve as well. Organizational changes may result in data recalculations. Quantifying GHG emissions within the boundaries of a business is a relatively nascent exercise, and we, like other companies in our industry, have refined and updated our methodologies following prior publication of data. For example, there have been inconsistent practices across many U.S. pork/poultry and dairy producers in quantifying our GHG emissions where biogas eligible for carbon reduction credits is also produced on farms. We have revised baselines and previously reported GHG emissions for our U.S. operations, as well as our carbon reduction goals, as a result of guidance clarifying the accounting for biogas credits in this context. Our GHG footprint has also changed as a result of closure or sale of plants, acquisition of new plants and reduction of farm operations. Furthermore, like many peer companies, our data collection, analysis and reporting capabilities have developed from a starting point with very limited established guidance or methodology. See “Item 1. Business—Sustainability.” We have engaged a third-party consultant to conductprepare a reviewlimited assurance of the GHG emissions attributable to our worldwide businesses, our energy use and our value chain,chain to ensure their accuracy and that analysis is ongoing. We expect additional changes to themeet methodologiespotential toregulatory quantify our GHG emissions and possibly our climate-related goals as a result of this work.requirements.
As of December 29,28, 2024,2025, we had, on a consolidated basis, $2,002$2,003 million of outstanding total debt and finance lease obligations and $2,303$2,298 million of undrawn capacity including $2,100 million under the Senior Revolving Credit Facility (as defined in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facilities—Senior Unsecured Revolving Credit Facility”) and $203 million$198 million under the Securitization Facility (as defined in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facilities—Accounts Receivable Securitization Facility”) (after giving effect to $22$27 million of issued but undrawn letters of credit).
Our indebtedness may increase from time to time for various reasons, including fluctuations in operating results, working capital needs, capital expendituresexpenditures, dividends and potential acquisitions or joint ventures. In addition, due to the volatile nature of the commodities markets, we may need to borrow significant amounts to cover any margin calls under our risk management and hedging programs. DuringOver fiscalthe yearpast 2024,three marginyears, depositsthe posted by us ranged from $(11) million to $97 million (negative amounts representing margin deposits we have received from our brokers). The average daily amount on deposit with our brokers during fiscal year 2024 was $27 million. As of December 29, 2024, our netmaximum amount of margin deposits held onby depositour brokers and counterparties at any given time was $60$121 million.
Our Senior Revolving Credit Facility and Securitization Facility have variable interest rates. Market interest rates have increasedfluctuated over the past several years and may increase in the future as a result of action by the U.S. Federal Reserve and other factors, and as a result, variable-rate debt may create higher debt service requirements, which would adversely affect our cash flow. If we draw upon our variable rate indebtedness and interest rates increase, our debt service obligations on our variable rate indebtedness would increase even though the amount borrowed would remain the same.
In particular, our borrowings under the Senior Revolving Credit Facility bear interest at the Secured Overnight Financing Rate (“SOFR”), or the Eurocurrency Rate (as defined in the Senior Revolving Credit Facility), plus a margin ranging from 0.875% to 1.50% per annum, or, at our election, at a base rate plus a margin ranging from 0.00% to 0.50% per annum, in each case depending on our senior unsecured debt rating. To the extent we draw from our Senior Revolving Credit Facility, we may subject to interest rate risk which could cause our debt service obligations to increase. We may also enter into additional variable rate indebtedness in the future.
There can also be no assurance that SOFR or the Eurocurrency Rate will perform in the same way as the Senior Revolving Credit Facility’s original benchmark London interbank Offered Rates (“LIBOR”) would have at any time, including as a result of changes in interest and yield rates in the market, market volatility or global or regional economic, financial, political, regulatory, judicial or other events.
Despite current indebtedness levels and restrictive covenants, we expect to incur additional indebtedness and may incur other indebtedness to finance our operations and other capital needs. Although the agreements governing our indebtedness contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of thresholds, qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. If additional debt is incurred, the related risks that we now face as a result of our leverage would intensify.
•our director nominees be selected, or recommended for our board’s selection, by a nominating and governance committee comprised solely of independent directors; and
•the compensation of our executive officers be determined, or recommended to our board for determination, by a compensation committee comprised solely of independent directors; anddirectors.
•an annual performance evaluation of the nominating and governance and compensation committees be performed.
For so long as WH Group owns, in the aggregate, a majority of our then outstanding shares of our common stock, WH Group shall havehas the right to designate, for inclusion in the slate of directors nominated by our board for election to our board, a majority of the directors on our board and control the composition of our board and the approval of actions requiring shareholder approval through its voting power. Even when WH Group ceases to own a majority of our then outstanding shares of common stock, for so long as WH Group continues to own, in the aggregate, at least 10% of our then outstanding shares of common stock, WH Group shall beis entitled to designate, for inclusion in the slate of directors nominated by the board for election to our board, a number of the total number of directors entitled to serve on the board proportionate to the percentage of our outstanding common stock owned by WH Group, rounded up to the nearest whole number. In addition, our amended and restated articles of incorporation providesprovide that at any time that WH Group owns at least a majority of our then outstanding shares of common stock, shareholders are permitted to take action by written consent. For the purpose of determining ownership of our common stock for these purposes, references to WH Group include WH Group, its successors by way of merger or transfer of all or substantially all of its assets, any entity that is 50% beneficially owned by WH Group, and any entity that acquires a majority of our then outstanding shares of common stock directly from any of the foregoing that is a shareholder of our company.
The U.S. government, including its agencies such as the SEC, hasand state and local governments have made statements and taken certain actions that have led to, and may in the future make statements or take actions that would lead to, changes in relations between the U.S. and the PRC, which statements and actions could impact companies, including us, with connections to the PRC. In particular, the U.S. may in the future impose policies on or increase scrutiny of companies having operations in the PRC, such as WH Group, or companies in the U.S. withU.S.with significant PRC ownership. These could restrict or negatively impact our business or our ability to access the U.S. capital markets. More broadly, changes in political conditions in the PRC and changes in the state of U.S.-PRC relations, including any tensions relating to potential military conflict between the PRC and Taiwan, are difficult to predict and could lead to policies or regulations that adversely affect our business, financial condition or results of operations on account of our controlling shareholder’s ties to the PRC. Furthermore, continued or increased tension in U.S.-PRCU.S. PRC relations or any deterioration in political or trade relations between the U.S. and the PRC may lead to negative investor sentiment towards companies controlled by shareholders with significant ties to the PRC, which could make our common stock less attractive to U.S. investors and affect the market price of our common stock.
WH Group is listed on The Stock Exchange of Hong Kong Limited and is therefore subject to the applicable Hong Kong laws and regulations, including but not limited to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “HKEx Listing Rules.Rules”). Under the HKEx Listing Rules, WH Group is obligated to obtain approval from its board of directors and/or shareholders for certain transactions in which we, as a subsidiary of WH Group, engage, such as the purchase or sale of assets, mergers and acquisitions, lending, leasing of assets, donation or acceptance of assets, debt restructuring, license agreements, research and developmentR&D joint ventures, and transactions with connected persons (as defined under the HKEx Listing Rules) of WH Group, the value of which exceeds certain financial thresholds established by the applicable listing rules and/or otherwise not exempted under the applicable listing rules. In addition, the HKEx Listing Rules require our controlling shareholder to obtain shareholders’ approval for certain corporate actions that we undertake, including but not limited to (1i) any issuance of shares by us that results in a reduction of WH Group’s equity interest in us in excess of certain dilution thresholds and (2ii) the implementation of a share option and/or award scheme involving the issuance of new shares by us.
As a public company, we have significant requirements for enhanced financial reporting and internal controls. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environment, and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements, and harm our results of operations. In addition, we will be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting beginning with our second annual report. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business.
In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, we may encounter problems or delays in completing the remediation of any deficiencies identified by us or our independent registered public accounting firm in connection with the issuance of their attestation report.
Further, the global equity markets in general have recently experienced extreme price and volume fluctuations, including as a result of the COVID-19 pandemic, economic uncertainty and changes or anticipated changes in interest rates, inflation, and liquidity concerns at financial institutions thatand trade tensions among the U.S. and other countries. These fluctuations have been and in the future may be unrelated to our operating performance. Continued market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the value of our common stock. In addition, price volatility may be greater if the public float and trading volume of our common stock is low.
We have historically paid dividends to WH Group annually, along with special dividends in some years. WeFor initiallyfiscal expectyear 2026, we intend to pay annual cash dividends in an amount equal to 50%$1.25 per share of ourcommon net income, subject to the discretion of the board.stock. However, the payment of dividends and other distributions is at the discretion of our board and our board may, in its discretion, increase, decrease or eliminate the payment of dividends. Our ability to pay dividends on our common stock depends on many factors, including our results of operations, financial condition, earnings, liquidity and capital requirements, regulatory constraints, level of indebtedness, capital requirements, contractual restrictions,restrictions with respect to the payment of dividends, restrictions in our debt agreements and in any preferred stock, general business prospectsconditions and any other factors that our board may deem relevant.relevant in making such a determination. In particular, our ability to pay dividends on our common stock is limited by covenants in our credit facilities and the indentures governing the notes and may be further restricted by the terms of any future debt or preferred securities. Furthermore, Virginia law prohibits us from paying dividends or other distributions if, after giving effect to the dividend or other distribution, we would not be able to pay our debts as they become due in the usual course of business or our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if we were to be dissolved at the time of the dividend or other distribution, to satisfy the preferential rights of any then outstanding shares of our preferred stock. While we do not currently believe that these restrictions will impair our ability to continue to pay regular quarterly cash dividends, there can be no assurance that we will not need to reduce or eliminate the payment of dividends on our common stock in the future.
As of March 24, 2025,2026, WH Group beneficially owned approximately 92.7%87% of our outstanding shares of common stock. These shares are “restricted securities” as that term is defined in Rule 144 of the Securities Act (“Rule 144”) and we have granted WH Group certain registration rights with respect to its remaining shares of our common stock. WH Group is entitled to sell these shares in the public market only if the sale of such shares is registered with the SEC or if the sale of such shares qualifies for an exemption from registration under Rule 144 or any other applicable exemption under the Securities Act. We are unable to predict with certainty whether or when WH Group will sell shares of our common stock. We, our directors and our officers and WH Group have signed lock-up agreements with the underwriters of our IPO that, subject to certain customary exceptions, restrict the sale of the shares of our common stock and certain other securities held by them for 180 days following the effectiveness of our IPO. The representative of the underwriters may, in their sole discretion and at any time without notice, release all or any portion of the shares or securities subject to any such lock-up agreements.
In addition, pursuant to the registration rights agreement entered into between us and WH Group, WH Group has the right, subject to certain conditions, to require us to register the sale of its shares of our common stock under the Securities Act. By exercising its registration rights and selling a large number of shares, WH Group could cause the prevailing market price of our common stock to decline.
Upon the expiration of the lock-up agreements described above, all of such shares will be eligible for resale in a public market pursuant to Rule 144, subject to our compliance with the public information requirement and, in the case of shares held by WH Group, subject to volume, manner of sale and other limitations under Rule 144.
Management's Discussion & Analysis (MD&A)
New heading “Key Factors and Recent Developments Affecting Our Results of Operations and Financial Condition”
New heading “Initial Public Offering”
New heading “Geopolitical Conflicts and Market Volatility”
New heading “Employee Retention Tax Credits”
New heading “One Big Beautiful Bill”
New heading “Sioux Falls Plant Construction”
New heading “Restructuring and Optimization”
Removed heading “Key Factors Affecting Our Results of Operations and Financial Condition”
Removed heading “Recent Developments”
Largest changes
“Recent hostilities and geopolitical tensions in multiple regions, including the Middle East, Ukraine, and parts of Central and South America, have contributed to increased volatility in global oil, energy, commodity and transportation markets. Ongoing sanctions, export controls, and other governmental actions associated with these conflicts have impacted and may continue to impact the price and availability of oil and other key inputs. …”see in full comparison
“(5)Consists of accruals for the antitrust price-fixing and antitrust wage-fixing litigation matters that are described in “Note 18: Regulation and Contingencies” to the consolidated financial statements included in Part II, Item 8 of this Annual Report.”see in full comparison
“On July 22, 2025, we terminated an uncommitted $250 million accounts receivable monetization facility (“Monetization Facility”) and paid $232 million to participating banks to reacquire the outstanding balance of accounts receivable previously sold under the facility. The Monetization Facility was originally established to provide us with additional liquidity and working capital flexibility. In light of our liquidity position and internal capital resources as of July 22, 2025, we determined that the Monetization Facility was no longer cost-effective or necessary. …”see in full comparison
“Under the Securitization Facility, we and the SPV, as applicable, are subject to certain customary covenants, including, but not limited to, restrictions on our ability to sell, assign or otherwise dispose of any collateral or assign any right to receive income with respect thereto, use proceeds for any purpose other than those set forth in the Securitization Facility, make certain payments on junior indebtedness, incur debt or merge or consolidate, subject to certain exceptions set forth therein. …”see in full comparison
“(3)Consists of costs related to the closure of our Vernon, California processing facility, the closure and/or reduction of certain farms in Arizona, California, Missouri and Utah and certain residual operating and restructuring expenses, including the termination of a number of agreements with contract farmers, workforce reduction, and accelerated depreciation of machinery equipment with no future alternative use, due to discontinuation of operations in the West Coast and efforts to improve the cost structure of our Hog Production segment.”see in full comparison
Full comparison: every changed paragraph (236)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Annual Report on Form 10-K. This discussion and analysis includes the results of operations and financial conditions,condition, including year-over-year comparisons, for fiscal years 20242025 and 2023.2024. For discussion and analysis of fiscal year 2022,2023, including a year-over-year comparison of fiscal years 20232024 and 2022,2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” ofincluded in our finalAnnual prospectus,Report datedon JanuaryForm 27, 2025,10-K for ourfiscal IPO,year filed with the SEC under Rule 424(b) of the Securities Act on January 29, 2025.2024. The information reflects all normal recurring adjustments which we believe are necessary to present fairly the financial position and results of operations for all periods included. Totals and percentages may be affected by rounding. Certain prior period amounts have been reclassified to conform to the current period presentation.
We are an American food company that employs approximately 34,00032,000 people in the U.S. and 2,500 people in Mexico. We boast a portfolio of high-quality, iconic brands, such as Smithfield®, Eckrich® and Nathan’s Famous®, among many others. We are aan majorityindirect, ownedmajority-owned subsidiary of Hong Kong-based WH Group.
We conduct our operations through three reportable segments: Packaged Meats, Fresh Pork, and Hog Production. We also conduct operations thatthrough dotwo notother constitute reportableoperating segments, which include our Mexico and BioscienceBioscience, operations.which are aggregated and reported as “Other.”
Our fiscal year is the 52-week or 53-week period which ends on the Sunday nearest to December 31. Fiscal years 20242025 and 20232024 each consisted of 52-weeks.52 weeks.
Key Factors and Recent Developments Affecting Our Results of Operations and Financial Condition
The following are key factors that have influenced our results of operations in the past and/or may influence our results in the future.
The strategic initiatives we are executing across our segments are complemented and enabled by our strong balance sheet and ongoing operational investments, positioning us for future growth. We have several strategic initiatives to grow our business, reduce costs and enhance our profitability and margins. TheseFor include:a comprehensive discussion of our growth strategies, refer to “Item 1. Business—Our Growth Strategies in this Annual Report on Form 10-K.
•driving growth in our Packaged Meats segment;
•further enhancing the profitability of our Fresh Pork segment;
•continuing to invest in innovation;
•optimizing operational and supply chain efficiencies; and
•executing synergistic and complementary mergers and acquisitions.
For a more comprehensive discussion of our growth strategies, refer to “Item 1. Business—Our Growth Strategies” in this Annual Report on Form 10-K.
Key Factors Affecting Our Results of Operations and Financial Condition
The following are key factors that have influenced our results of operations in the past and may influence our results in the future.
We are focused on driving profitable growth through our Packaged Meats segment. Within the Packaged Meats segment, the primary factors impacting sales of our brands are household penetration, consumption levels, price point and product offerings. As a result, we have pursued strategies that we believe best align our products with consumer trends and behavior. We have shifted our portfolio towards a higher mix of value-added and margin accretive products while leveraging the breadth of our offerings to further penetrate across dayparts. We look to increase brand awareness and encourage consumer adoption of our products through product and packaging innovation and effective and appealing marketing strategies while maintaining our promise to consumers to offer high-quality products for every budget. We have also expanded to new categories and grown distribution of under-indexed brands in under-penetrated locations. In addition to the prior initiatives,addition, we also seek to increase sales in packaged meats products by driving volumes of our private label and foodservice products, by expanding our customer relationships and by offering quality selections across the value chain.
Our cost as a percentage of sales varies based on fluctuations of raw materialsmaterial prices, as well as manufacturing, distribution and marketing costs. Raw materials are the largest component of our total cost of goods sold, with feed ingredients and hogs accounting for the majority share. Approximately 80% of the raw materials used in the Packaged Meats segment is sourced internally from our Fresh Pork segment, and about half of the hogs used in the Fresh Pork segment are supplied by our Hog Production segment. In the Hog Production segment, in fiscal year 2024, approximately 60% of cost of goods sold was from animal feed, which is derived primarily from corn and soybean meal. The priceprices of feed ingredients, hogs and pork fluctuatesfluctuate based on market dynamics which can affect our margins. In addition, our distribution costs are affected by fuel prices, which also fluctuate based on market dynamics and may contribute to higher prices for feed ingredients and other inputs. We enter into hedging transactions for thesecommodities commoditiessuch as feed ingredients, hogs and fuel when we determine conditions are appropriate to mitigate the inherent price risks. While this hedging may limit our ability to participate in gains from favorable commodity fluctuations, it also reduces the risk of loss from adverse changes in raw material prices.
We continue to optimize the size of our hog production operations and procure a greater mix of hogs from independent suppliers with market-based supply agreements in order to supply our Fresh Pork segment. We have reduced the size of our internal hog production from a peak of 17.6 million head in 2019 to 14.6 million head in 2024, and we continue to explore opportunities for reduced internal production. We expect to produce approximately 11.511.1 million head in 2025, which would representrepresents approximately 40% of the hogs processed by our Fresh Pork segment. We continue to explore opportunities to reduce internal production over the medium term.
Initial Public Offering
On January 29, 2025, we completed our IPO of 26,086,958 shares of common stock, representing 7% of the total outstanding shares, at a price of $20.00 per share. We issued 13,043,479 shares of common stock bringing the total number of outstanding shares to 393,112,711. The remaining 13,043,479 shares of common stock were sold by WH Group, through its indirect wholly owned subsidiary SFDS UK, our only shareholder at the time. We received net proceeds from the IPO of $236 million after deducting underwriting discounts, commissions and fees. As a result of the IPO, our common stock is listed on the Nasdaq Global Select Market under the ticker “SFD.”
In connection with the IPO, we granted to certain of our directors and employees and certain directors and employees of WH Group: (1) options to purchase 9,822,467 shares of common stock with an exercise price equal to the IPO price of $20.00 per share with an aggregate grant date fair value of $30 million and (2) 1,527,000 restricted stock units (“RSUs”) with an aggregate grant date fair value of $31 million. The options and substantially all RSUs vest over a five year period, with 20% vesting each year. We recognized compensation expense totaling $9 million associated with these equity instruments in fiscal year 2025. Unrecognized compensation expense totaled $37 million as of December 28, 2025, which is expected to be recognized on a straight-line basis over the remaining vesting period of 4.1 years.
We export our products to over 30 countries, including China. Those exports primarily consist of fresh pork offal products. For fiscal year 2025, our export sales into China accounted for approximately 2% of our total sales. As of December 28, 2025, products we export to China faced tariffs that ranged from 25% to 47%, with most products subject to 47% tariff rates.
Trade relations between the U.S. and China are fluid. China previously had proposed imposing tariff rates on our products ranging from 140% to 172%, but implementation of those increased rates have been repeatedly paused. It is impossible for us to predict whether tariff rates imposed on our products by China will increase, decrease or stay the same, or whether China will ban imports from the U.S. altogether, and we will adjust our sales strategy accordingly.
Geopolitical Conflicts and Market Volatility
Recent hostilities and geopolitical tensions in multiple regions, including the Middle East, Ukraine, and parts of Central and South America, have contributed to increased volatility in global oil, energy, commodity and transportation markets. Ongoing sanctions, export controls, and other governmental actions associated with these conflicts have impacted and may continue to impact the price and availability of oil and other key inputs. Because energy prices directly influence freight, logistics and certain raw material costs across our supply chain, sustained volatility or disruptions may increase our operating costs. In addition, these conditions may disrupt trade flows and contribute to broader macroeconomic uncertainty, which could impact demand for our products. The duration and overall impact of these conflicts remain uncertain. We will continue to monitor developments and take measures to minimize the impact on our operations.
Litigation
Like other participants in our industry, we are subject to various laws and regulations administered by federal, state and other government entities, including the EPA and corresponding state agencies, as well as the USDA, the Grain Inspection, Packers and Stockyard Administration, the FDA, OSHA, the Commodity Futures Trading Commission and similar agencies in foreign countries.
We, from time-to-time, receive notices and inquiries from regulatory authorities and others asserting that we are not in compliance with such laws and regulations. In some instances, litigation ensues. In addition, individuals may initiate litigation against us.
As of December 28, 2025 and December 29, 2024, we had contingent liabilities totaling $149 million and $141 million, respectively, in accrued expenses and other current liabilities on the consolidated balance sheets related to litigation matters. Charges totaling $80 million were recorded in fiscal year 2025 and are included in selling, general and administrative expenses (“SG&A”) in the consolidated statements of income. We did not record any significant charges for litigation matters in fiscal year 2024. These matters will not affect our profits or losses in future periods unless our accruals prove to be insufficient or excessive. It is reasonably possible that a change in our estimates may occur in the near term and that our accruals could be insufficient. We are unable to estimate the amount of possible loss in excess of our accruals, which could be material.
Additionally, in the second quarter of 2025, we settled a claim against an insurance carrier and received $29 million in proceeds for the recovery of losses we incurred in connection with past litigation. As a result, we recognized a $29 million gain on the insurance recovery in the second quarter of 2025. The gain was recognized in operating gains in the consolidated statement of income and the proceeds were classified in operating activities in the consolidated statement of cash flows in the second quarter of 2025.
For further information related to our litigation matters, refer to “Note 19: Regulation and Contingencies” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Employee Retention Tax Credits
We export our products to over 30 countries, including China, Mexico and Canada, and we are engaged in a joint venture in Mexico. For the year ended December 29, 2024, U.S. export sales accounted for 13% of our total sales.
Because of the growing market share of U.S. pork products in the international markets, U.S. exporters are increasingly being affected by measures taken by importing countries to protect local producers. Our international sales and operations are subject to various risks related to economic or political uncertainties, including, but not limited to, the risks posed by the imposition of tariffs, quotas, trade barriers and other trade protection measures that may be taken by various countries.
In February 2025, the current U.S. administration issued executive orders announcing a 10% tariff on most imported goods from China and 25% tariffs on most imported goods from Mexico and Canada. The China tariff went into effect on February 4, 2025 and the tariffs on Mexico and Canada went into effect on March 4, 2025. The China tariff was increased by an additional 10% effective March 4, 2025. However, on March 6, 2025, President Trump announced that the proposed tariffs on imported goods from Canada and Mexico that are covered by the United States-Mexico-Canada Agreement will be suspended until April 2, 2025.
China responded by imposing an additional 15% tariff on U.S. chicken, wheat, corn and cotton products and an additional 10% tariff on pork, among other products, increasing the tariff rate on pork from 37% to 47%. Officials from Mexico and Canada have announced that they anticipate imposing retaliatory tariffs.
Our primary raw materials, including hogs, feed grains and meat, are sourced primarily in the U.S. Tariffs imposed on U.S. exports of these items could increase U.S. supplies of these items and therefore, reduce our raw material costs. On the other hand, the U.S. pork industry depends on free and open export markets to support growth. China, Mexico and Canada are three of our largest export markets. Tariffs imposed on U.S. pork exports could increase U.S. pork supplies, which would also affect the price of pork in the U.S. We could also experience a decrease in demand or lose customers due to anti-American sentiment. Any of the above could materially affect our business, financial condition and results of operations.
Recent Developments
The following events and transactions have had, and/or will have, an impact on our results of operations and/or financial condition:
Initial Public Offering. On January 29, 2025, we completed our IPO of 26,086,958 shares of common stock, which represents 7% of the total outstanding shares, at a price of $20.00 per share. We issued 13,043,479 shares of common stock bringing the total number of outstanding shares to 393,112,711. The remaining 13,043,479 shares of common stock were sold by our existing shareholder. Our existing shareholder granted the underwriters a 30-day option to purchase up to 3,913,042 additional shares of our common stock. On February 20, 2025, the underwriters partially exercised such option and purchased 2,506,936 additional shares of common stock from our existing shareholder. We received net proceeds from the IPO of approximately $236 million after deducting underwriting discounts, commissions and fees. As a result of the IPO, our common stock is listed on the Nasdaq Global Select Market under the ticker “SFD.”
In connection with the IPO, we granted to our directors and certain of our employees and certain directors and employees of WH Group:
•options to purchase 9,822,467 shares with an exercise price equal to the IPO price and an aggregate grant date fair value of $30 million; and
•1,527,000 restricted stock units (“RSUs”) with an aggregate grant date fair value of $31 million.
Both the options and RSUs vest over a five year period, with 20% vesting each year. We expect to recognize an aggregate of $49 million in compensation expense over the five-year vesting period of these awards, of which we estimate that the amount recognized in 2025 will be $9 million.
Altoona, Iowa Facility Closure. On August 30, 2024, we closed our Altoona, Iowa ham boning facility and consolidated production volume into other locations to improve manufacturing efficiencies. Costs associated with closing the plant primarily include operating lease assets and equipment that we disposed of prior to the expiration of the lease term or end of the asset’s useful life. The charges associated with the closing were not material. Altoona was accounted for in the Fresh Pork segment.
European Carve-Out. On August 26, 2024, we completed a carve-out and transfer of our European operations to WH Group. As a result, we derecognized the assets and liabilities of our former European operations through equity. No gain or loss was recognized on the transaction. The historical results of operations, assets and liabilities, and cash flows of the European operations have been condensed and reported as discontinued operations in the consolidated financial statements for all periods presented.
Dry Sausage Facility Acquisition. On July 30, 2024, we acquired a dry sausage production facility located in Nashville, Tennessee from Cargill Meat Solutions Corporation for $38 million. The acquisition is part of our strategy to grow our value-added packaged meats business and serve the growing demand for high-quality pepperoni, salami, charcuterie and other dry sausage products.
Employee Retention Tax Credit. In the second quarterquarters of 2025 and 2024, we recognized $86$10 million and $1$87 millionmillion, respectively, of employee retention creditstax credits, substantially all of which were classified in cost of sales and selling, general and administrative expenses (“SG&A”), respectively, in the consolidated statementstatements of income. For more information, see “Note 7: Employee Retention Tax Credits” to the consolidated financial statements included in Part II, Item 8 of this Annual Report.Report on Form 10-K.
One Big Beautiful Bill
On July 4, 2025, the Tax Relief for American Families and Workers Act of 2025 (commonly known as the “One Big Beautiful Bill” or “OBBB”) was signed into law. This comprehensive legislation made several significant changes to federal tax law, including:
•Permanently reinstating 100% bonus depreciation and adding 100% bonus deprecation for real property placed in service after January 19, 2025 and used in production activity.
•Permanently reinstating the immediate expensing of R&D in the U.S for years 2022 and beyond.
•Permanently restoring the EBITDA-based limitations for interest deduction under the IRS Tax Code.
In the third quarter of 2025, following the enactment of the OBBB, we reclassified approximately $77 million of deferred tax assets related to R&D capitalization to prepaid expenses and other current assets.
Sioux Falls Plant Construction
On February 16, 2026, we announced that we had initiated the approval process to construct a new state-of-the-art combined fresh pork and packaged meats processing facility in Sioux Falls, South Dakota. The proposed facility would replace our existing 117-year-old plant currently located in Sioux Falls, South Dakota. Our preliminary estimate of the proposed investment is up to $1.3 billion over the next three years. This investment is contingent on approval by the Company’s board of directors as well as permitting and other regulatory approvals. If approved, construction is anticipated to begin in the first half of 2027 with production estimated to commence by the end of 2028. Additionally, if the project moves forward, we plan to accelerate depreciation and may incur other incremental costs related to closing the existing plant, which are currently under evaluation.
Acquisitions
Nathan’s Famous
On January 20, 2026, we entered into an agreement to acquire all of the issued and outstanding shares of Nathan’s for $102.00 per share in cash. The acquisition is expected to be funded using cash on hand. Since March 2014, we have held an exclusive license to manufacture, distribute, market and sell “Nathan’s Famous” branded hot dogs, sausages, corned beef and certain other ancillary products through retail outlets in the U.S. and Canada and Sam’s Clubs in Mexico. The license is scheduled to expire in March 2032. The closing of the transaction is expected to occur in the first half of 2026, subject to satisfaction of certain conditions set forth in the merger agreement, including obtaining approval by the holders of a majority of the outstanding Nathan’s common stock, approval from CFIUS and other customary closing conditions.
Nashville, Tennessee Facility
What changed in the latest 10-Q
Risk Factors
Our business is subject to a variety of risks and uncertainties. Our risk factors are described in the “Risk Factors” section of our Annual Report on Form 10-K filed for the fiscal year ended December 28, 2025. There have been no material changes in our risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 28, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Second Quarter – 2026 vs. 2025”
New heading “First Six Months – 2026 vs. 2025”
New heading “Inter-segment Eliminations”
New heading “Second Quarter – 2026 vs. 2025”
New heading “First Six Months – 2026 vs. 2025”
New heading “Second Quarter – 2026 vs. 2025”
New heading “First Six Months – 2026 vs. 2025”
Largest changes
As ofsee in full comparisonMarchJune29,28, 2026 and December 28, 2025, we had contingent liabilities totaling $148 million and $149millionmillion, respectively, classified in accrued expenses and other current liabilities on the condensed consolidated balance sheets related to litigationmatters.matters, including those described below. We did not record any significant charges for litigation matters in thethreefirstmonthshalfendedofMarch2026.29,In2026theandsecondMarchquarter30,of2025.2025, we recorded charges totaling $80 million for litigation matters, including those described below, in SG&A in the condensed consolidated statements of income. These matters will not affect our profits or losses in future periods unless our accruals prove to be insufficient or excessive. It is reasonably possible that a change in our estimates may occur in the near term and that our accruals could be insufficient. We are unable to estimate the amount of possible loss in excess of our accruals, which could be material. Additionally, legal expenses incurred in our and our subsidiaries’ defense of these claims and any payments made to plaintiffs through unfavorable verdicts or otherwise could negatively impact our cash flows and our liquidity position.
“(5)Consists of employee termination benefits and restructuring costs associated with workforce reduction and administrative process optimization initiatives.”see in full comparison
Full comparison: every changed paragraph (125)
Our elected fiscal year is the 52-week or 53-week period which ends on the Sunday nearest to December 31. Each of the firstsecond quarters of fiscal years 2026 and 2025, which ended on MarchJune 29,28, 2026 and MarchJune 30,29, 2025, respectively, consisted of 13 weeks. Each of the first halves of fiscal years 2026 and 2025 consisted of 26 weeks.
We conduct our operations through three reportable segments: Packaged Meats, Fresh Pork and Hog Production. We also conduct operations through two other operating segments,our Mexico and Bioscience,Bioscience operating segments, which are aggregated and reported as “Other.”
The Packaged Meats segment consists of our U.S. operations that process fresh meat into a wide variety of packaged meats products, including bacon, sausage, hot dogs, deli and lunch meats, dry sausage products (such as pepperoni and genoa salami), ham products, ready-to-eat products and prepared foods (such as pre-cookedbacon, entrees, baconsausage and sausagepre-cooked entrées). Approximately 80% of the Packaged Meats segment’s raw materials are sourced from our Fresh Pork segment. We market our domestic packaged meats products under a strategic set of core brands, which include: Smithfield, Eckrich, Nathan’s Famous, Farmland, Armour, Farmer John, Kretschmar, Krakus, John Morrell, Cook’s, Gwaltney, Carando, Margherita, Curly’s and Smithfield Culinary. We also sell a sizeable portion of our packaged meats products as private label products. The majority of the Packaged Meats segment’s products are sold to retail and foodservice customers in the U.S.
The Hog Production segment consists of our hog production operations in the U.S., which produce and raise our hogs on numerous Company-owned farms and farms that are owned and operated by contract farmers. Nearly all of the hogs produced by this segment are processed by our Fresh Pork segment. The Hog Production segment also sells livestock feed and grains and provides transportation and other ancillary services to external customers. In fiscal year 2025 and through the firstsecond quarter of fiscal year 2026, approximately 60% of the Hog Production segment’s cost of goods sold was from animal feed, which is derived primarily from corn and soybean meal.
We export our products to over 30 countries, including China. Those exports primarily consist of fresh pork products. For the quarter ended MarchJune 29,28, 2026, our export sales into China accounted for approximately 2% of our total sales. As of MarchJune 29,28, 2026, products we export to China faced tariffs that ranged from 25% to 47%, with most products subject to 47% tariff rates.
Like other participants in our industry, we are subject to various laws and regulations administered by federal, state and other government entities, including the U.S. Environmental Protection Agency and corresponding state agencies, as well as the U.S. Department of Agriculture (“USDA”), the Grain Inspection, Packers and Stockyard Administration, the U.S. Food and Drug Administration, the U.S. Occupational Safety and Health Administration, the Commodity and Futures Trading Commission and similar agencies in foreign countries.
As of MarchJune 29,28, 2026 and December 28, 2025, we had contingent liabilities totaling $148 million and $149 millionmillion, respectively, classified in accrued expenses and other current liabilities on the condensed consolidated balance sheets related to litigation matters.matters, including those described below. We did not record any significant charges for litigation matters in the threefirst monthshalf endedof March2026. 29,In 2026the andsecond Marchquarter 30,of 2025.2025, we recorded charges totaling $80 million for litigation matters, including those described below, in SG&A in the condensed consolidated statements of income. These matters will not affect our profits or losses in future periods unless our accruals prove to be insufficient or excessive. It is reasonably possible that a change in our estimates may occur in the near term and that our accruals could be insufficient. We are unable to estimate the amount of possible loss in excess of our accruals, which could be material. Additionally, legal expenses incurred in our and our subsidiaries’ defense of these claims and any payments made to plaintiffs through unfavorable verdicts or otherwise could negatively impact our cash flows and our liquidity position.
On February 16, 2026, we announced that we had initiated the approval process to construct a new state-of-the-art combined fresh pork and packaged meats processing facility in Sioux Falls, South Dakota.Dakota, The proposed facilitywhich would replace our existing 117-year-old plant currently located in Sioux Falls, South Dakota.facility. Our preliminary estimate of the proposed investment is up to $1.3 billion over the next three years. This investment is contingent on approval by the Company’s board of directors as well as permitting and other regulatory approvals. If approved, construction is anticipated to begin in the first half of 2027 with production estimated to commence by the end of 2028. Additionally, if the project moves forward, we plan to accelerate depreciation and may incur other incremental costs related to closing the existing plant, which are currently under evaluation.
We also entered into separate agreements in the first quarter of 2026 to purchase land for the proposed Sioux Falls facility and sell our existing facility, each for $37 million. The land purchase for the new site closed on July 1, 2026. The purchase agreement includes a provision granting us the right to unwind the transaction if construction of the proposed Sioux Falls facility does not commence by October 1, 2027. The sale of the existing Sioux Falls facility is contingent upon transitioning operations to the proposed facility.
Nathan’s FamousFamous, Inc. Pending Acquisition
On January 20, 2026, we entered into an agreement to acquire all of the issued and outstanding shares of Nathan’s FamousFamous, Inc. (“Nathan’s”) for $102.00 per share in cash. The acquisition is expected to be funded using cash on hand. Since March 2014, we have held an exclusive license to manufacture, distribute, market and sell “Nathan’s Famous” branded hot dogs, sausages, corned beef and certain other ancillary products through retail outlets in the U.S. and Canada and Sam’s Clubs in Mexico. The license is scheduled to expire in March 2032. Completion of the transaction remains contingent upon meeting several conditions specified in the merger agreement.agreement, Thesewhich include securing approval from the holders of a majority of Nathan’s outstanding common stock, obtaining clearance from the Committee on Foreign Investment in the United States (“CFIUS”),States, and fulfilling other standard closing requirements. However, given the impact of the partial government shutdown on statutory deadlines for CFIUS’s review process, our anticipated closing timeline has shifted, and we nowWe expect the transaction to close in the second half of 2026.
On February 6, 2026, we announced our decision to exit our leased Springfield, Massachusetts dry sausage production facility by the end of August 2026 and consolidate production across our network, including at our recently acquired Nashville, Tennessee facility. The decision to close the Springfield facility is part of the Company’s ongoing efforts to optimize its manufacturing footprint and improve operational and cost efficiencies. In the first quarter of 2026, we recognized $2 million in accelerated depreciation and employee termination benefits in cost of sales in the condensed consolidated statement of income. We expect to recognize additional charges associated with the exit of the facility totaling approximately $8 million over the second and third quarters of fiscal year 2026.
During the second quarter and first half of 2026, we recognized $3 million and $6 million, respectively, in accelerated depreciation and employee termination benefits in cost of sales in the condensed consolidated statement of income. The lease terminates in March 2027 and we expect to recognize an additional $4 million in exit costs through the termination date.
In the fourth quarter of 2025, we commenced an initiative to modernize and optimize certain of our administrative and transactional processes. As part of this initiative, we will employ new and advanced technologies, including artificial intelligence and robotic process automation, that will allow us to drive significant improvements in operational efficiency and productivity. As a result of this initiative, during the second quarter and first half of 2026, we recognized $1$4 million and $5 million, respectively, in restructuring costs in selling, general and administrative expenses (“SG&A”) in the condensed consolidated statement of income in the first quarter of fiscal year 2026 and anticipate additional one-time restructuring costs totaling approximately $10$5 million for the remainder of fiscal year 2026.
Office Closures
In the second quarter of 2025, we announced a plan to close our satellite offices in Lisle, Illinois and Kansas City, Missouri and move work performed at those locations to our headquarters in Smithfield, Virginia. As a result, we estimated and accrued $4 million of employee termination benefit costs in SG&A in the consolidated statement of income in the second quarter of 2025 for personnel who are not expected to relocate. Subsequent office closure costs were not material.
The following discussion provides an analysis of our results of operations for the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025 and for the first half of 2026 compared to the first half of 2025.
Second Quarter – 2026 vs. 2025
Packaged Meats. Segment sales increaseddecreased by $125$56 million, or 6.2%,2.7%, primarily attributable to a 3.5%5.5% increasedecrease in sales volumevolume, andpartially offset by a 2.6%2.9% increase in our average sales price. The increasedecrease in volume was primarily attributable to higher holiday ham sales due to the timing of Easter,the Easter holiday, which occurred earlier in 20262026, asresulting comparedin lower volume of seasonal hams in the second quarter of 2026. The Easter holiday timing also favorably impacted sales mix year-over-year, which contributed to 2025. Thethe increase in average sales price was primarily due to higher raw material costs, which translated into higher sales prices of our packaged meats products.price.
Fresh Pork. Segment sales decreased by $21$72 million, or 1.1%,3.5%, primarily attributable to a 2.6%2.0% decrease in sales volume partially offset byand a 1.5% increasedecrease in our average sales price. The decrease in sales volume was primarily driven by a 2.1% decline in the number of hogs harvested. The increasedecrease in our average sales price is directionally aligned withoutperformed the 1.1%5.3% increasedecrease in the fresh pork cut-out values reported by the USDA, which averaged $0.96$0.97 per pound in the firstsecond quarter of 2026, primarilydriven dueby toweaker continuedbelly strongand demandham for pork despite a slight increase in U.S. pork production.markets.
Hog Production. Segment sales decreased by $69 million, or 8.2%, driven by the following factors:
Hog•A Production.$94 Segmentmillion year-over-year decrease in sales decreasedto Murphy Family Farms and VisionAg, primarily driven by $163 million, or 17.5%, primarily due to the one-timeinitial sale of commercial hog inventories in the firstsecond quarter of 2025 in connection with the formation of Murphy Family Farms and VisionAg. The number of market hogs sold decreased by 125,000, or 4.2%, year-over-year primarily due to the formation of these entities. These decreases were partially offset by:
•A 0.9% increase in our average market hog sales price, inclusive of the effects of hedging, driven by a higher lean hog price index published by the Chicago Mercantile Exchange (“CME”).
•A $7$14 million increasedecrease in othergrain sales to Murphyother Familythird Farms and VisionAg.parties.
These decreases were partially offset by a 9.0% increase in our average market hog sales price, inclusive of the effects of hedging, while the lean hog price index published by the Chicago Mercantile Exchange ("CME") decreased 3.3% year-over-year.
Other. Segment sales increased by $70$33 million, or 66.9%,27.6%, primarily due to a 63.5%33.2% increase in volume and a $24$16 million increase from the favorable impact of foreign currency translation, partially offset by a 9.9%13.7% decrease in the average sales price in our Mexico operations. Sales volume increased due to higher production driven by improved capacity utilization and higher sales of our Fresh Pork segment products through our Mexico operations.operations and improved capacity utilization. The decrease in average sales price was largely driven by lower market prices for fresh pork and live hogs in Mexico.
•Fresh Pork. The decrease in inter-segment sales by our Fresh Pork segment was primarily attributable to lower market values for fresh pork components sold to our Packaged Meats segment, partially offset by a 1.4% increase in inter-segment sales volume.
•Hog Production. The decrease in inter-segment sales by our Hog Production segment was primarily attributable to ourlower strategic initiative to optimize ourlive hog productionmarket operations, which reduced the number of hogs produced by our Hog Production segment.prices.
First Six Months – 2026 vs. 2025
Packaged Meats. Segment sales increased by $69 million, or 1.7%, primarily attributable to a 2.7% increase in average sales price, partially offset by a 1.0% decrease in sales volume. The increase in average sales price was primarily attributable higher raw material costs, which translated into higher sales prices of our packaged meats products. The decrease in volume was primarily attributable to cautious consumer spending and competitive pricing pressures.
Fresh Pork. Segment sales decreased by $94 million, or 2.3%, primarily attributable to a 2.3% decrease in sales volume driven by a decline in the number of hogs harvested. The average selling price remained consistent year-over-year.
Hog Production. Segment sales decreased by $232 million, or 13.1%, driven by the following factors:
•A $238 million decrease in sales to Murphy Family Farms and VisionAg, primarily driven by the initial sale of commercial hog inventories in the first half of 2025 in connection with the formation of these entities.
•A decrease in the number of market hogs sold of 150,000, or 2.6%, primarily due to the formation of Murphy Family Farms and VisionAg.
•A $13 million decrease in grain sales to other third parties.
These decreases were partially offset by a 4.9% increase in our average market hog sales price, inclusive of the effects of hedging, while the lean hog price index published by the CME decreased 1.5% year-over-year.
Other. Segment sales increased by $103 million, or 45.8%, primarily due to a 47.7% increase in volume and a $40 million increase from the impact of foreign currency translation, partially offset by a 15.4% decrease in average sales price in our Mexico operations. Sales volume increased due to higher sales of our Fresh Pork segment products through our Mexico operations and improved capacity utilization. The decrease in average sales price was largely driven by lower market prices for fresh pork and live hogs in Mexico.
Inter-segment Eliminations
•Fresh Pork. The decrease in inter-segment sales by our Fresh Pork segment was primarily attributable to lower market values for fresh pork components sold to our Packaged Meats segment, partially offset by a 2.8% increase in inter-segment sales volume.
•Hog Production. The decrease in inter-segment sales by our Hog Production segment was primarily attributable to our strategic initiative to optimize our hog production operations, which reduced the number of hogs produced by our Hog Production segment, as well as lower live hog market prices.
Second Quarter – 2026 vs. 2025
Packaged Meats. Cost of sales in our Packaged Meats segment increaseddecreased by $116$24 million, or 7.0%,1.4%, driven primarily by a $94$45 million increasedecrease in raw material costs andresulting higherfrom lower sales volume attributable to the timing of the Easter holiday. Additionally,This manufacturingdecrease andwas distributionpartially costs increasedoffset by $22 million due in part to the increasefollowing in sales volume.factors:
•A $15 million increase in manufacturing and distribution costs primarily driven by higher fuel and freight costs and other inflationary pressures.
Fresh Pork. Cost of sales in our Fresh Pork segment decreased by $12$52 million, or 0.6%,2.6%, driven primarily by a $17$59 million decrease in raw material costs, partially offset by a $5 million increase in manufacturing and distribution costs. The decrease in raw material costs was driven by the lower sales volume,volume partiallyand offset by higherlower market prices for live hogs.hogs, partially offset by the following factors:
•A $3 million increase in manufacturing costs.
Hog Production. Cost of sales in our Hog Production segment decreased by $111 million, or 13.7%, primarily due to:
•A $105 million decrease in cost of goods sold to Murphy Family Farms and VisionAg, primarily driven by the initial sale of commercial hog inventories in the first half of 2025 in connection with the formation of these entities.
•A $18 million decrease in cost of grain sold to other third parties.
•A $4 million decrease in the cost of breeding stock sales.
These decreases were partially offset by increases in raw material costs and operating costs of approximately $12 million and $4 million, respectively.
Other. Cost of sales in our Other segment increased by $42 million, or 39.4%, driven primarily by the following factors:
Hog Production. Cost of sales in our Hog Production segment decreased by $164 million, or 17.8%, primarily due the one-time sale of commercial hog inventories to Murphy Family Farms and VisionAg in the first quarter of 2025. Additionally, raw material costs decreased by $21 million largely attributable to the reduction in the size of our hog production operations.
Other.•An Cost of sales in our Other segment increased by $72 million, or 85.7%, driven primarily by a $53$18 million increase in raw material costs and a $14 million increase in manufacturing and distribution costs in our Mexico operations, mainlyprimarily attributable to the increase in sales volume and the impact of foreign currency translation.volume.
•A $15 million unfavorable impact from foreign currency translation.
•A $5 million increase in manufacturing and distribution costs in our Mexico operations, primarily attributable to the increase in sales volume.
First Six Months – 2026 vs. 2025
Packaged Meats. Cost of sales in our Packaged Meats segment increased by $92 million, or 2.7%, driven by the following factors:
•A $49 million increase in raw material costs.
•A $38 million increase in manufacturing and distribution costs primarily driven by higher fuel and freight costs and other inflationary pressures.
Fresh Pork. Cost of sales in our Fresh Pork segment decreased by $63 million, or 1.6%, primarily due to a $76 million decrease in raw material costs driven by the lower sales volume and lower market prices for live hogs, partially offset by the following factors:
SFD insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 3 filings (3 insiders, 3 trade dates, 165,364 shares, about $4.4M). Net open-market shares: -165,364 (purchases minus sales); net value about -$4.4M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-16 | France Steven |
Open-market sale | 82,825 | $26.82 | $2.2M |
| 2026-06-12 | Starling Raymond A |
Open-market sale | 3,960 | $26.78 | $106.0K |
| 2026-06-12 | France Steven |
Option exercise | 82,825 | $23.76 | $2.0M |
| 2026-06-09 | Hall Mark L. |
Open-market sale | 78,579 | $26.36 | $2.1M |
| 2026-06-09 | Hall Mark L. |
Option exercise | 78,579 | $20.00 | $1.6M |
| 2026-06-02 | Quelch John |
Grant/award | 6,915 | — | — |
| 2026-06-02 | Starling Raymond A |
Grant/award | 6,915 | — | — |
| 2026-06-02 | Gallagher Marie T. |
Grant/award | 6,915 | — | — |
| 2026-03-10 | Watts Keller D. |
Shares withheld for tax | 10,684 | $23.76 | $253.9K |
| 2026-03-10 | Westerbeek Kraig A. |
Grant/award | 34,319 | — | — |
| 2026-03-10 | Westerbeek Kraig A. |
Shares withheld for tax | 5,000 | $23.76 | $118.8K |
| 2026-03-10 | Sutton Doug |
Grant/award | 81,446 | — | — |
| 2026-03-10 | Sutton Doug |
Shares withheld for tax | 10,684 | $23.76 | $253.9K |
| 2026-03-10 | Smith Charles Shane |
Shares withheld for tax | 21,978 | $23.76 | $522.2K |
| 2026-03-10 | Smith Charles Shane |
Grant/award | 146,190 | — | — |
| 2026-03-10 | Owens Donovan |
Shares withheld for tax | 10,315 | $23.76 | $245.1K |
| 2026-03-10 | Owens Donovan |
Grant/award | 78,637 | — | — |
| 2026-03-10 | He Hank Shenghua |
Grant/award | 78,353 | — | — |
| 2026-03-10 | He Hank Shenghua |
Shares withheld for tax | 11,780 | $23.76 | $279.9K |
| 2026-03-10 | France Steven |
Grant/award | 93,305 | — | — |
| 2026-03-10 | France Steven |
Shares withheld for tax | 14,028 | $23.76 | $333.3K |
| 2026-03-10 | Checkovich Tennille J. |
Grant/award | 10,676 | — | — |
| 2026-03-10 | Checkovich Tennille J. |
Shares withheld for tax | 1,072 | $23.76 | $25.5K |
| 2026-03-10 | Bennett Isham Jay |
Shares withheld for tax | 1,632 | $23.76 | $38.8K |
| 2026-03-10 | Bennett Isham Jay |
Grant/award | 14,672 | — | — |
| 2026-03-10 | Hall Mark L. |
Grant/award | 78,353 | — | — |
| 2026-03-10 | Hall Mark L. |
Shares withheld for tax | 11,780 | $23.76 | $279.9K |
| 2026-01-28 | France Steven |
Shares withheld for tax | 3,848 | $23.65 | $91.0K |
| 2026-01-28 | Westerbeek Kraig A. |
Shares withheld for tax | 1,224 | $23.65 | $28.9K |
| 2026-01-28 | Sutton Doug |
Shares withheld for tax | 3,159 | $23.65 | $74.7K |
| 2026-01-28 | Smith Charles Shane |
Shares withheld for tax | 5,569 | $23.65 | $131.7K |
| 2026-01-28 | Owens Donovan |
Shares withheld for tax | 3,159 | $23.65 | $74.7K |
| 2026-01-28 | He Hank Shenghua |
Shares withheld for tax | 3,849 | $23.65 | $91.0K |
| 2026-01-28 | Checkovich Tennille J. |
Shares withheld for tax | 708 | $23.65 | $16.7K |
| 2026-01-28 | Bennett Isham Jay |
Shares withheld for tax | 992 | $23.65 | $23.5K |
| 2026-01-28 | Brobst Robert Allen Jr |
Shares withheld for tax | 822 | $23.65 | $19.4K |
| 2026-01-28 | Hall Mark L. |
Shares withheld for tax | 3,848 | $23.65 | $91.0K |
Well-known investors holding SFD (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Two Sigma Investments | 2026-06-30 | 4,238,865 | $102.8M | 0.08% | Added 1% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 4,112,981 | $99.8M | 0.03% | Added 268% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 1,042,592 | $25.3M | 0.06% | Added 2% |
| Millennium Management (Israel Englander) | 2026-06-30 | 926,610 | $22.5M | 0.02% | Reduced 16% |
| Renaissance Technologies | 2026-06-30 | 733,300 | $17.8M | 0.02% | Added 126% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 218,089 | $5.3M | 0.01% | Added 51% |
| D. E. Shaw & Co. | 2026-06-30 | 194,401 | $4.7M | 0.0% | Reduced 28% |
| Bridgewater Associates | 2026-06-30 | 93,092 | $2.6M | — | Sold out |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 81,771 | $2.3M | — | Sold out |