What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-11 compared with 2026-04-28 · 300 added, 142 removed, 445 unchanged (50% of the section changed)

8 unchanged sentences

Our elected fiscal year is the 52-week or 53-week period which ends on the Sunday nearest to December 31.

Each of the first quarters of fiscal years 2026 and 2025, which ended on March 29, 2026 and March 30, 2025, respectively, consisted of 13 weeks.

Each of the second quarters of fiscal years 2026 and 2025, which ended on June 28, 2026 and June 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, Mexico and Bioscience, which are aggregated and reported as “Other.”

We also conduct operations through our Mexico and Bioscience operating segments, which are aggregated and reported as “Other.”

Packaged Meats Segment

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-cooked entrees, bacon and sausage).

Approximately 80% of the Packaged Meats segment’s raw materials are sourced from our Fresh Pork segment.

13 unchanged sentences

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 the first 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.

In fiscal year 2025 and through the second 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.

Key Factors and Recent Developments Affecting Our Results of Operations and Financial Condition

40 unchanged sentences

Those exports primarily consist of fresh pork products.

For the quarter ended March 29, 2026, our export sales into China accounted for approximately 2% of our total sales.

As of March 29, 2026, products we export to China faced tariffs that ranged from 25% to 47%, with most products subject to 47% tariff rates.

For the quarter ended June 28, 2026, our export sales into China accounted for approximately 2% of our total sales.

As of June 28, 2026, 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.

12 unchanged sentences

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.

Department of Agriculture (“USDA”), the U.S.

Food and Drug Administration, the U.S.

3 unchanged sentences

In addition, individuals may initiate litigation against us.

As of March 29, 2026 and December 28, 2025, we had contingent liabilities totaling $149 million in accrued expenses and other current liabilities on the condensed consolidated balance sheets related to litigation matters.

We did not record any significant charges for litigation matters in the three months ended March 29, 2026 and March 30, 2025.

As of June 28, 2026 and December 28, 2025, we had contingent liabilities totaling $148 million and $149 million, respectively, classified in accrued expenses and other current liabilities on the condensed consolidated balance sheets related to litigation matters, including those described below.

We did not record any significant charges for litigation matters in the first half of 2026.

In the second quarter of 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.

1 unchanged sentence

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.

For further information related to our litigation matters, refer to “Note 18:

1 unchanged sentence

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.

2 unchanged sentences

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.

Nathan’s Famous Pending Acquisition

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 Famous, Inc.

Pending Acquisition

On January 20, 2026, we entered into an agreement to acquire all of the issued and outstanding shares of Nathan’s Famous, Inc.

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The license is scheduled to expire in March 2032.

Completion of the transaction remains contingent upon meeting several conditions specified in the merger agreement.

These 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”), 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 now expect the transaction to close in the second half of 2026.

Completion of the transaction remains contingent upon meeting several conditions specified in the merger agreement, which 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, and fulfilling other standard closing requirements.

We expect the transaction to close in the second half of 2026.

Restructuring and Optimization

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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.

Administrative Process Optimization

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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, we recognized $1 million 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 million for the remainder of fiscal year 2026.

As a result of this initiative, during the second quarter and first half of 2026, we recognized $4 million and $5 million, respectively, in restructuring costs in selling, general and administrative expenses (“SG&A”) in the condensed consolidated statement of income and anticipate additional one-time restructuring costs totaling approximately $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.

Workforce Reduction

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Consolidated Results

Three Months Ended

March 29, 2026 March 30, 2025 $ Change % Change

(in millions)

Three Months Ended Six Months Ended

June 28, 2026 June 29, 2025 $ Change % Change June 28, 2026 June 29, 2025 $ Change % Change

(in millions) (in millions)

Sales $ 3,700 $ 3,786 $ (87) (2.3) % $ 7,500 $ 7,558 $ (57) (0.8) %

5 unchanged sentences

Interest expense, net 8 11 (3) (24.3) % 16 22 (6) (26.5) %

Non-operating losses 1 6 (5) (79.8) %

Non-operating (gains) losses (17) (4) (13) 288.7 % (16) 2 (18) NM

Income before income taxes 299 254 45 17.9 % 623 558 65 11.6 %

Income tax expense 64 62 1 2.0 % 135 134 1 1.1 %

Loss from equity method investments 2 5 (3) (63.0) %

(Income) loss from equity method investments (4) 3 (7) NM (2) 8 (10) NM

Net income 239 188 51 27.2 % 489 415 74 17.7 %

Net income attributable to noncontrolling interests 4 4 — 1.6 %

Net income attributable to noncontrolling interests 1 — 1 NM 5 4 1 31.0 %

Net income attributable to Smithfield $ 238 $ 188 $ 50 26.6 % $ 484 $ 412 $ 72 17.6 %

Operating Profit (Loss) and Operating Profit Margin by Segment

Three Months Ended

March 29, 2026 March 30, 2025 Change % Change

(in millions, except percentages and basis points)

Operating profit:

Three Months Ended Six Months Ended

June 28, 2026 June 29, 2025 Change % Change June 28, 2026 June 29, 2025 Change % Change

(in millions, except percentages and basis points) (in millions, except percentages and basis points)

Operating profit (loss):

Packaged Meats $ 265 $ 301 $ (36) (12.0) % $ 540 $ 567 $ (27) (4.7) %

1 unchanged sentence

Hog Production 64 22 42 192.2 % 68 23 45 196.3 %

Other 12 14 (3) (18.4) %

Other (2) 7 (9) NM 10 22 (12) (55.9) %

Corporate expenses (27) (26) (1) (3.9) % (53) (55) 2 4.0 %

2 unchanged sentences

Operating profit $ 290 $ 260 $ 30 11.6 % $ 623 $ 582 $ 41 7.1 %

Operating profit margin:

Packaged Meats 12.8 % 13.1 % (32) bps

Fresh Pork 3.9 % 4.0 % (13) bps

Hog Production 0.5 % 0.1 % 41 bps

Other 6.7 % 13.7 % (700) bps

Consolidated 8.7 % 8.5 % 22 bps

Operating profit (loss) margin:

Packaged Meats 13.1 % 14.5 % (139) bps 12.9 % 13.8 % (87) bps

Fresh Pork 0.7 % 1.7 % (98) bps 2.3 % 2.8 % (54) bps

Hog Production 8.3 % 2.6 % 572 bps 4.4 % 1.3 % 314 bps

Other (1.4) % 6.1 % (747) bps 2.9 % 9.6 % (671) bps

Consolidated 7.8 % 6.9 % 98 bps 8.3 % 7.7 % 61 bps

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Results of Operations Analysis

The following discussion provides an analysis of our results of operations for the first quarter of 2026 compared to the first quarter of 2025.

Three Months Ended

March 29, 2026 March 30, 2025 $ Change % Change

(in millions)

The following discussion provides an analysis of our results of operations for the second quarter of 2026 compared to the second quarter of 2025 and for the first half of 2026 compared to the first half of 2025.

Three Months Ended Six Months Ended

June 28, 2026 June 29, 2025 $ Change % Change June 28, 2026 June 29, 2025 $ Change % Change

(in millions) (in millions)

Sales by segment:

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Consolidated sales $ 3,700 $ 3,786 $ (87) (2.3) % $ 7,500 $ 7,558 $ (57) (0.8) %

Second Quarter – 2026 vs.

Packaged Meats.

Segment sales increased by $125 million, or 6.2%, primarily attributable to a 3.5% increase in sales volume and a 2.6% increase in our average sales price.

The increase in volume was primarily attributable to higher holiday ham sales due to the timing of Easter, which occurred earlier in 2026 as compared to 2025.

increase in average sales price was primarily due to higher raw material costs, which translated into higher sales prices of our packaged meats products.

Segment sales decreased by $56 million, or 2.7%, primarily attributable to a 5.5% decrease in sales volume, partially offset by a 2.9% increase in our average sales price.

The decrease in volume was primarily driven by a 2.1% decline in the number of hogs harvested.

The increase in our average sales price is directionally aligned with the 1.1% increase in the fresh pork cut-out values reported by the USDA, which averaged $0.96 per pound in the first quarter of 2026, primarily due to continued strong demand for pork despite a slight increase in U.S.

pork production.

The decrease in volume was primarily attributable to the timing of the Easter holiday, which occurred earlier in 2026, resulting in 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 the increase in average sales price.

Segment sales decreased by $72 million, or 3.5%, primarily attributable to a 2.0% decrease in sales volume and a 1.5% decrease in our average sales price.

The decrease in sales volume was primarily driven by a decline in the number of hogs harvested.

The decrease in our average sales price outperformed the 5.3% decrease in the fresh pork cut-out values reported by the USDA, which averaged $0.97 per pound in the second quarter of 2026, driven by weaker belly and ham markets.

Hog Production .

Segment sales decreased by $163 million, or 17.5%, primarily due to the one-time sale of commercial hog inventories in the first 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 million increase in other sales to Murphy Family Farms and VisionAg.

Segment sales increased by $70 million, or 66.9%, due to a 63.5% increase in volume and a $24 million increase from the favorable impact of foreign currency translation, partially offset by a 9.9% 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.

Segment sales decreased by $69 million, or 8.2%, driven by the following factors:

• A $94 million year-over-year decrease in sales to Murphy Family Farms and VisionAg, primarily driven by the initial sale of commercial hog inventories in the second quarter of 2025 in connection with the formation of these entities.

• A $14 million decrease in grain sales to other third 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.

Segment sales increased by $33 million, or 27.6%, primarily due to a 33.2% increase in volume and a $16 million increase from the impact of foreign currency translation, partially offset by a 13.7% 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 1.4% increase in inter-segment sales volume.

• Hog Production.

The decrease in inter-segment sales by our Hog Production segment was attributable to our strategic initiative to optimize our hog production operations, which reduced the number of hogs produced by our Hog Production segment.

The decrease in inter-segment sales by our Hog Production segment was primarily attributable to lower live hog market prices.

First Six Months – 2026 vs.

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.

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.

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.

• 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.

Cost of Sales

Three Months Ended

March 29, 2026 March 30, 2025 $ Change % Change

(in millions)

Three Months Ended Six Months Ended

June 28, 2026 June 29, 2025 $ Change % Change June 28, 2026 June 29, 2025 $ Change % Change

(in millions) (in millions)

Packaged Meats

4 unchanged sentences

149 107 42 39.4 % 305 191 114 59.8 %

5 9 (4) (46.2) %

Unallocated 12 11 1 10.9 % 17 20 (3) (14.8) %

Inter-segment eliminations (1,257) (1,334) 77 (5.8) % (2,559) (2,656) 96 (3.6) %

Cost of sales $ 3,221 $ 3,288 $ (66) (2.0) % $ 6,510 $ 6,549 $ (39) (0.6) %

Second Quarter – 2026 vs.

Packaged Meats.

Cost of sales in our Packaged Meats segment increased by $116 million, or 7.0%, driven primarily by a $94 million increase in raw material costs and higher sales volume attributable to the timing of the Easter holiday.

Additionally, manufacturing and distribution costs increased by $22 million due in part to the increase in sales volume.

Cost of sales in our Fresh Pork segment decreased by $12 million, or 0.6%, driven primarily by a $17 million decrease in raw material costs, partially offset by a $5 million increase in manufacturing and distribution

The decrease in raw material costs was driven by lower sales volume, partially offset by higher market prices for live hogs.

Cost of sales in our Packaged Meats segment decreased by $24 million, or 1.4%, driven primarily by a $45 million decrease in raw material costs resulting from lower sales volume attributable to the timing of the Easter holiday.

This decrease was partially offset by the following factors:

• A $15 million increase in manufacturing and distribution costs primarily driven by higher fuel and freight costs and other inflationary pressures.

• The impact of $5 million in employee retention tax credits recognized in the second quarter of 2025.

Cost of sales in our Fresh Pork segment decreased by $52 million, or 2.6%, driven primarily by a $59 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:

• The impact of $5 million in employee retention tax credits recognized in the second quarter of 2025.

• A $3 million increase in manufacturing costs.

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.

Cost of sales in our Other segment increased by $72 million, or 85.7%, driven primarily by a $53 million increase in raw material costs and a $14 million increase in manufacturing and distribution costs in our Mexico operations, mainly attributable to the increase in sales volume and the impact of foreign currency translation.

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.

Cost of sales in our Other segment increased by $42 million, or 39.4%, driven primarily by the following factors:

• An $18 million increase in raw material costs in our Mexico operations, primarily attributable the increase in sales 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.

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.

• The impact of $5 million in employee retention tax credits recognized in the second quarter of 2025.

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:

• A $10 million increase in manufacturing costs driven by inflationary pressures, partially offset by the decrease in sales volume.

• The impact of $5 million in employee retention tax credits recognized in the second quarter of 2025.

Hog Production.

Cost of sales in our Hog Production segment decreased by $275 million, or 15.9%, primarily due to the following factors, which more than offset an increase of approximately $10 million in operating costs:

• A $241 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 $19 million decrease in cost of grain sold to other third parties.

• A decrease of approximately $16 million in raw material costs due in part to the decrease in market hog volume.

• A $9 million decrease in the cost of breeding stock sales.

Cost of sales in our Other segments increased by $114 million, or 59.8%, driven primarily by the following factors:

• A $57 million increase in raw material costs in our Mexico operations, primarily attributable the increase in sales volume.

• A $36 million unfavorable impact from foreign currency translation.

• A $13 million increase in manufacturing and distribution costs in our Mexico operations, primarily attributable to the increase in sales volume.

Selling, General and Administrative Expenses

Three Months Ended

March 29, 2026 March 30, 2025 $ Change % Change

(in millions)

Three Months Ended Six Months Ended

June 28, 2026 June 29, 2025 $ Change % Change June 28, 2026 June 29, 2025 $ Change % Change

(in millions) (in millions)

Packaged Meats

3 unchanged sentences

10 10 — (0.7) % 20 22 (2) (9.4) %

6 6 — 8.2 % 13 12 1 7.2 %

Corporate expenses

2 unchanged sentences

Selling, general and administrative expenses $ 191 $ 268 $ (78) (28.9) % $ 371 $ 465 $ (95) (20.3) %

SG&A decreased by $17 million, or 8.6%, driven by a continued focus on cost reduction and disciplined spending, partially offset by a $4 million increase in marketing and advertising expense.

Additionally, the first quarter of 2025 included a $6 million charge for employee termination benefits associated with a workforce reduction initiative, which was not allocated to our business segments.

Second Quarter – 2026 vs.

SG&A decreased by $78 million, or 28.9%, driven primarily by accruals for litigation charges totaling $80 million in the second quarter of 2025, partially offset by a $4 million increase in marketing and advertising expenses.

First Six Months – 2026 vs.

SG&A decreased by $95 million, or 20.3%, driven primarily by the following factors, which were partially offset by an $8 million increase in marketing and advertising expenses:

• Litigation-related charges totaling $80 million were recorded in the second quarter of 2025, which were not allocated to our operating segments.

• A $5 million decrease in charges associated with our workforce reduction and administrative optimization initiatives and decision to close our satellite offices in Lisle, Illinois and Kansas City, Missouri, which were not allocated to our operating segments.

• Continued focus on cost reduction and disciplined spending across the entire business.

Operating Gains

The following table provides details of operating gains.

Three Months Ended

March 29, 2026 March 30, 2025

Three Months Ended Six Months Ended

June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025

(in millions)

Gain on disposal of assets $ (1) $ (2)

Gains on disposal of assets $ (2) $ (1) $ (3) $ (3)

Insurance recoveries (1)

— (29) — (35)

Other operating gains (1) (1) (1) (1)

1 unchanged sentence

________________

(1) Consists of a gain recognized in connection with a settlement of an insurance claim associated with property damage.

Non-Operating Losses

(1) Consists of a gain recognized in the second quarter of 2025 related to the settlement of a claim against an insurance carrier for losses incurred in connection with past litigation and a gain recognized in the first quarter of 2025 in connection with a settlement of an insurance claim associated with property damage.

Non-Operating (Gains) Losses

The following table provides details of non-operating (gains) losses.

Three Months Ended

March 29, 2026 March 30, 2025

Three Months Ended Six Months Ended

June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025

(in millions)

Loss on assets held in rabbi trusts (1)

Gains on assets held in rabbi trusts (1)

$ (15) $ (8) $ (13) $ (6)

Net pension and postretirement benefits cost (2)

Other non-operating gains (3) — (4) —

Non-operating losses $ 1 $ 6

Non-operating (gains) losses $ (17) $ (4) $ (16) $ 2

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Income Tax Expense

Income tax expense remained consistent while our effective tax rate decreased to 22.2% for the first quarter of 2026 compared to 23.6% for the first quarter 2025.

The decrease was primarily driven by changes in interest accruals for unrecognized tax benefits.

Income tax expense was relatively consistent year-over-year while our effective tax rate decreased to 21.3% for the second quarter of 2026 compared to 24.6% for the same period in 2025, and to 21.8% for the first half of 2026, compared to 24.0% for the first half of 2025.

These decreases were primarily driven by favorable tax settlements recognized in the second quarter of 2026.

(Income) Loss From Equity Method Investments

(Income) loss from equity method investments shifted to income of $4 million and $2 million in the second quarter and first half of 2026, respectively, compared to losses of $3 million and $8 million in the comparable periods of 2025, reflecting improved performance at Monarch Bio Energy, LLC and Murphy Family Farms.

Liquidity and Capital Resources

Our sources of liquidity include cash and cash equivalents on hand together with availability under our committed revolving credit facilities.

As of March 29, 2026, we had $3,683 million of available liquidity consisting of $1,386 million in cash and cash equivalents and $2,298 million of availability under our committed credit facilities.

As of June 28, 2026, we had $3,648 million of available liquidity consisting of $1,350 million in cash and cash equivalents and $2,298 million of availability under our committed credit facilities.

We believe that our current liquidity position is strong and that our cash flows from operations and availability under our credit facilities will be sufficient to meet our working capital needs and financial obligations and commitments for at least the next twelve months.

Credit Facilities

March 29, 2026

June 28, 2026

Facility Capacity Borrowing

9 unchanged sentences

We maintain a $2,100 million senior unsecured revolving credit facility (“Senior Revolving Credit Facility”), which matures in February 2030 with the option to extend the maturity date for up to two one-year periods, subject to obtaining the lenders’ consent and satisfaction of certain other conditions.

The Senior Revolving Credit Facility bears interest at the Secured Overnight Financing Rate 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 ratings.

The Senior Revolving Credit Facility also contains financial maintenance covenants requiring us to maintain a maximum total consolidated leverage ratio (ratio of consolidated funded debt to consolidated capitalization, each as defined in the Senior Revolving Credit Facility) of 0.50 to 1.00 (which we may elect to increase to 0.55 to 1.00 with respect to any fiscal quarter in which a material acquisition is consummated and the immediately following three consecutive fiscal quarters, subject to certain restrictions) and a minimum interest

coverage ratio (ratio of earnings before interest, taxes, depreciation and amortization (“EBITDA”) to consolidated interest expense, each as defined in the Senior Revolving Credit Facility) of 3.50 to 1.00.

The Senior Revolving Credit Facility

bears interest at the Secured Overnight Financing Rate 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 ratings.

Our Senior Revolving Credit Facility contains customary covenants, including, but not limited to, restrictions on our ability and that of our subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets subject to their security interest, or enter into transactions with affiliates, each subject to certain exceptions as set forth therein.

6 unchanged sentences

However, the accounts receivable owned by the SPV are separate and distinct from our other assets and are not available to our other creditors should we become insolvent.

As of March 29, 2026, the SPV held $694 million of accounts receivable.

As of June 28, 2026, the SPV held $647 million of accounts receivable.

We must maintain certain ratios related to the collection of our receivables as a condition of the Securitization Facility agreement.

As of March 29, 2026, we had $27 million in letters of credit issued under the Securitization Facility.

As of June 28, 2026, we had $27 million in letters of credit issued under the Securitization Facility.

None of the letters of credit were drawn upon.

Cash Flows From Operating Activities

Three Months Ended

March 29, 2026 March 30, 2025

Six Months Ended

June 28, 2026 June 29, 2025

(in millions)

1 unchanged sentence

Net income $ 489 $ 415

Adjustments to reconcile net income to net cash flows used in operating activities:

Adjustments to reconcile net income to net cash flows from operating activities:

Depreciation and amortization 169 165

4 unchanged sentences

Change in accrued expenses and other current liabilities (9) (49)

Net cash flows used in operating activities $ (65) $ (166)

The decrease in net cash flows used in operating activities year-over-year was primarily driven by changes in working capital and higher earnings.

Other (18) (27)

Net cash flows from operating activities $ 204 $ 108

The increase in net cash flows from operating activities year-over-year was primarily driven by higher earnings and changes in working capital.

The following describes the significant changes in working capital:

• Accounts receivable.

Accounts receivable increased in the first quarter of 2026 primarily driven by the timing of the Easter holiday.

Sales to Murphy Family Farms and VisionAg also contributed to the increases in both time periods with a larger impact in the first quarter of 2025 related to the one-time sales of commercial hog inventories in connection with the formation of these entities.

Accounts receivable increased in the first half of 2025 primarily due to the sale of commercial hog inventories and feed to Murphy Family Farms and VisionAg in connection with the formation of these entities.

• Inventories .

Both periods reflect higher meat inventories and lower hog and feed inventories.

Meat inventories increased in each period primarily due to a seasonal build in advance of the summer grilling season.

Additionally, meat inventories were higher at the end of the first quarter of 2025 due to the later timing of the Easter holiday.

Hog inventories declined in both periods as a result of Hog Production

Reform, with a more pronounced impact in the first quarter of 2025.

Inventories decreased in the first half of 2025 primarily due to the sale of commercial hog inventories to Murphy Family Farms and VisionAg in connection with the formation of these entities.

Both periods reflect higher meat inventories and lower feed inventories.

Meat inventories increased in each period primarily due to the seasonal build in advance of the summer grilling and holiday seasons.

Feed inventories decreased in both periods due to the normal consumption of grain purchased during the prior-year harvest.

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Payments to certain farmers for these purchases are deferred until the first quarter of the following year.

These deferred payments were higher in the first half of 2026 compared to the first half of 2025.

• Accrued expenses and other current liabilities.

Accrued expenses and other current liabilities decrease seasonally in the first quarter each year due to payout of variable compensation earned in prior years.

The decrease in both periods was partially offset by increases in current income taxes payable.

The year-over-year change is attributable to a lower variable compensation payout and a larger increase to income taxes payable in the first quarter of 2026.

The change in both periods is primarily attributable to derivative gains and losses that are deferred in accumulated other comprehensive loss and subsequently reclassified into earnings as the underlying transactions affect earnings.

The year-over-year change is primarily attributable to lower variable compensation payments in the first quarter of 2026 and an accrual for litigation matters in the first half of 2025.

Cash Flows From Investing Activities

Three Months Ended

March 29, 2026 March 30, 2025

Six Months Ended

June 28, 2026 June 29, 2025

(in millions)

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Cash Flows From Financing Activities

Three Months Ended

March 29, 2026 March 30, 2025

Six Months Ended

June 28, 2026 June 29, 2025

(in millions)

Cash flows from financing activities:

Payment of dividends $ (246) $ (197)

Net proceeds from issuance of common stock — 236

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The Company remains in a strong financial position due to its robust cash flows, liquidity, and solid balance sheet.

We plan to continue to support the business in 2026 through capital expenditures in the range of $350 million to $450 million, inclusive of profit improvement projects, such as packaged meats capacity expansion and automation, as well as repairs and maintenance.

We plan to continue to support the business through capital expenditures in the range of $350 million to $450 million in 2026, inclusive of profit improvement projects, such as packaged meats capacity expansion and automation, as well as repairs and maintenance.

If approved by our board of directors and completed on the expected schedule, we estimate that our investment in a new fresh pork and packaged meats processing facility in Sioux Falls, South Dakota will be up to $1.3 billion over the next three years.

Nathan’s Famous

We expect to pay approximately $450 to $500 million for our pending acquisition of Nathan’s, including transaction costs and the payoff of assumed debt.

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Returning cash to shareholders in the form of dividends is also a top priority for the Company.

On March 23, 2026, our Board declared a quarterly cash dividend of $0.3125 per share of common stock, which was paid on April 21, 2026, to shareholders of record on April 7, 2026.

On July 30, 2026, our Board declared a quarterly cash dividend of $0.3125 per share of common stock, which will be paid on August 27, 2026, to shareholders of record as of August 13, 2026.

We anticipate the remaining quarterly dividends in fiscal year 2026 will be unchanged, resulting in an annual dividend rate in fiscal year 2026 of $1.25 per share.

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The noncontrolling interest (“NCI”) holders in Granjas Carroll de Mexico, S.

de C.V., (commonly known as “Altosano”) currently have the right to exercise a put option that would obligate us to redeem 40% of their interest.

(commonly known as “Altosano”) currently have the right to exercise a put option that would obligate us to redeem 40% of their interest.

After December 31, 2027 the NCI holders in Altosano have the right to exercise a put option for the remainder of their interest.

The redemption value for the NCI is fair value.

As of March 29, 2026, the value of the NCI on our condensed consolidated balance sheet was $311 million.

As of June 28, 2026, the value of the NCI on our condensed consolidated balance sheet was $311 million.

Contingent Losses

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Conversely, when the value of our open derivative contracts increases, our brokers may be required to deliver margin deposits to us for a portion of the increase.

the past twelve quarters, the maximum amount of margin deposits held by our brokers and counterparties at any given time was $121 million.

Over the past twelve quarters, the maximum amount of margin deposits held by our brokers and counterparties at any given time was $121 million.

The effects, positive or negative, on liquidity resulting from our risk management activities historically have tended to be mitigated by offsetting changes in cash prices in our core business.

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As such, adjusted net income attributable to Smithfield and adjusted net income per diluted common share attributable to Smithfield are not intended to be alternatives to net income, net income per diluted common share or any other performance measures derived in accordance with GAAP and should not be used by investors or other users of our financial statements in isolation for formulating decisions as they exclude a number of important cash and non-cash charges.

Three Months Ended Affected income statement

March 29, 2026 March 30, 2025

Three Months Ended Six Months Ended Affected Income Statement

June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025

(in millions, except per share data)

Net income attributable to Smithfield $ 238 $ 188 $ 484 $ 412

Incremental costs from destruction of property (1)

Plant closures (1)

3 — 6 2 Cost of sales

Plant closures 2 1 Cost of sales

Reduction in workforce and optimization (2)

1 unchanged sentence

— — — 2 Cost of sales

Incremental costs from destruction of property (3)

— — 3 — Cost of sales

Litigation charges — 73 — 73 SG&A

Office closures (4)

Hog Production Reform — — — 2 Cost of sales

Hog Production Reform (1) — (1) (1) Operating gains

Employee retention tax credits (5)

— (10) — (10) Cost of sales

Insurance recoveries (6)

— (29) — (35) Operating gains

Other 1 — 1 — SG&A

Income tax effect of non-GAAP adjustments (7)

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________________

(1) Consists primarily of accelerated depreciation charges, retention and severance costs and other incremental costs associated with our decision to exit our leased Springfield, Massachusetts dry sausage production facility.

(2) Consists of employee termination benefits and restructuring costs associated with workforce reduction and administrative process optimization initiatives.

Total severance costs round up to $9 million for the first half of 2025.

(3) Consists of incremental costs from the destruction of property in connection with a fire at a sow farm in Laverne, Oklahoma.

(2) Consists of severance and restructuring costs associated with workforce reduction and administrative process optimization initiatives.

Total severance costs round up to $9 million for the first quarter of 2025.

(3) Consists of a gain recognized in connection with the settlement of an insurance claim associated with property damage.

(4) Consists of employee termination benefit costs and other closure costs associated with the planned closure of our satellite offices in Lisle, Illinois and Kansas City, Missouri.

(5) Represents the recognition of employee retention tax credits received under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.

(6) Consists of gains recognized in connection with settlements of insurance claims associated with past litigation and property damage.

(7) Represents the tax effects of the non-GAAP adjustments based on a statutory tax rate of 25.7%.

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As such, EBITDA, adjusted EBITDA and adjusted EBITDA margin are not intended to be alternatives to net income or any other performance measures derived in accordance with GAAP and should not be used by investors or other users of our financial statements in isolation for formulating decisions as they exclude a number of important cash and non-cash charges.

Three Months Ended Twelve Months Ended Affected Income Statement Account

March 29, 2026 March 30, 2025 March 29, 2026 December 28, 2025

Three Months Ended Six Months Ended Twelve Months Ended Affected Income Statement Account

June 28, 2026 June 29, 2025 June 28, 2026 June 29, 2025 June 28, 2026 December 28, 2025

(in millions, except percentages)

5 unchanged sentences

EBITDA $ 396 $ 344 $ 809 $ 736 $ 1,726 $ 1,654

Litigation charges — — 73 73 SG&A

Reduction in workforce and optimization (1)

4 — 5 6 8 9 SG&A

Reduction in workforce and optimization (1)

— — — 2 — 2 Cost of sales

Office closures (2)

Incremental costs from destruction of property (2)

2 unchanged sentences

1 — 1 1 1 1 Cost of sales

Office closures (4)

1 4 1 4 1 4 SG&A

Litigation charges — 73 — 73 — 73 SG&A

Hog Production Reform (5)

8 unchanged sentences

— — — — (17) (17) Non-operating gains

Other 1 — 1 — 1 — SG&A

Adjusted EBITDA $ 403 $ 381 $ 820 $ 777 $ 1,720 $ 1,677

2 unchanged sentences

________________

(1) Consists of severance and restructuring costs associated with workforce reduction and administrative process optimization initiatives.

Total severance costs round up to $9 million and $12 million for the first quarter of 2025 and fiscal year 2025, respectively.

(2) Consists of severance costs associated with the planned closure of our satellite offices in Lisle, Illinois and Kansas City, Missouri.

(1) Consists of employee termination benefits and restructuring costs associated with workforce reduction and administrative process optimization initiatives.

Total severance costs round up to $9 million and $12 million for the first half of 2025 and fiscal year 2025, respectively.

(2) Consists of incremental costs from the destruction of property in connection with a fire at a sow farm in Laverne, Oklahoma.

(3) Excludes accelerated depreciation charges as such amounts are included in the depreciation and amortization line in this table.

(4) Consists of employee termination benefit costs and other closure costs associated with the planned closure of our satellite offices in Lisle, Illinois and Kansas City, Missouri.

(5) Consists of contract termination costs, loss on asset disposals, employee termination benefits and other exit costs associated with our Hog Production Reform initiative.

Excludes accelerated depreciation charges as such amounts are included in the depreciation and amortization line in this table.

(6) Fiscal year 2025 and twelve months ended March 29, 2025 includes a $3 million gain on the sale of certain of our hog farms in Missouri.

(7) Represents the recognition of employee retention tax credits received under the Coronavirus Aid, Relief, and Economic Security Act.

(6) Fiscal year 2025 and twelve months ended June 28, 2026 include a $3 million gain on the sale of certain of our hog farms in Missouri.

(7) Represents the recognition of employee retention tax credits received under the CARES Act.

(8) Consists of gains recognized in connection with settlements of insurance claims associated with past litigation and property damage.

3 unchanged sentences

Net debt and the ratio of net debt to adjusted EBITDA are non-GAAP measures.

We believe net debt is a useful measure as it helps to give investors a clear understanding of our financial position.

We believe net debt is a useful measure as it helps to

give investors a clear understanding of our financial position.

Net debt is also used to calculate certain leverage ratios.

We believe the ratio of net debt to adjusted EBITDA is a useful measure as it monitors the sustainability of our debt levels and our ability to take on additional debt against adjusted EBITDA, which is used as an operating

performance measure.

We believe these non-GAAP measures provide a more comparable year-over-year analysis.

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Adjusted Operating Profit and Adjusted Operating Profit Margin

The following table provides a reconciliation of operating profit to adjusted operating profit.

The following tables provide a reconciliation of operating profit to adjusted operating profit.

Adjusted operating profit and adjusted operating profit margin are non-GAAP measures.

2 unchanged sentences

Three Months Ended

March 29, 2026 March 30, 2025

June 28, 2026 Packaged

Meats Fresh Pork Hog

Production Other (1)

Corporate (2)

Unallocated (3)

(in millions, except percentages)

Operating profit $ 333 $

Incremental costs from destruction of property (1)

Operating profit (loss) $ 265 $ 14 $ 64 $ (2) $ (27) $ (24) $ 290

Reduction in workforce and optimization (4)

— — — — — 4 4

Plant closures (5)

— — — — — 3 3

Office closures (6)

— — — — — 1 1

Hog Production Reform — — — — — (1) (1)

Other — — — — — 1 1

Adjusted operating profit (loss) $ 265 $ 14 $ 64 $ (2) $ (27) $ (15) $ 300

Operating profit (loss) margin 13.1 % 0.7 % 8.3 % (1.4) % NM NM 7.8 %

Adjusted operating profit (loss) margin 13.1 % 0.7 % 8.3 % (1.4) % NM NM 8.1 %

Three Months Ended

June 29, 2025 Packaged

Meats Fresh Pork Hog

Production Other (1)

Corporate (2)

Unallocated (3)

(in millions, except percentages)

Operating profit (loss) $ 301 $ 35 $ 22 $ 7 $ (26) $ (80) $ 260

Litigation charges — — — — — 73 73

Office closures (6)

— — — — — 4 4

Employee retention tax credits (7)

(5) (5) — — — — (10)

Insurance recoveries (8)

— — — — — (29) (29)

Adjusted operating profit (loss) $ 296 $ 30 $ 22 $ 7 $ (26) $ (31) $ 298

Operating profit margin 14.5 % 1.7 % 2.6 % 6.1 % NM NM 6.9 %

Adjusted operating profit margin 14.2 % 1.4 % 2.6 % 6.1 % NM NM 7.9 %

_______________________________________________

(1) Consists of our Mexico and Bioscience operations.

(2) Represents general corporate expenses for management and administration of the business.

(3) We do not allocate certain items to our operating segments such as litigation charges, exit and disposal costs, insurance recoveries, gains and losses on the sale of property, plant and equipment and other assets, accelerated depreciation, and employee termination benefits, among others.

(4) Consists of employee termination benefits and restructuring costs associated with workforce reduction and administrative process optimization initiatives.

(5) Consists primarily of accelerated depreciation charges, retention and severance costs and other incremental costs associated with our decision to exit our leased Springfield, Massachusetts dry sausage production facility.

(6) Consists of employee termination benefit costs and other closure costs associated with the planned closure of our satellite offices in Lisle, Illinois and Kansas City, Missouri.

(7) Represents the recognition of employee retention tax credits received under the CARES Act.

(8) Consists of a gain recognized for the settlement of an insurance claim associated with past litigation.

Six Months Ended

June 28, 2026 Packaged

Meats Fresh Pork Hog

Production Other (1)

Corporate (2)

Unallocated (3)

(in millions, except percentages)

Operating profit (loss) $ 540 $ 92 $ 68 $ 10 $ (53) $ (35) $ 623

Plant closures (4)

— — — — — 6 6

Reduction in workforce and optimization (5)

— — — — — 5 5

Incremental costs from destruction of property (6)

— — — — — 3 3

Office closures (7)

— — — — — 1 1

Hog Production Reform — — — — — (1) (1)

Other — — — — — 1 1

Adjusted operating profit (loss) $ 540 $ 92 $ 68 $ 10 $ (53) $ (19) $ 638

Operating profit margin 12.9 % 2.3 % 4.4 % 2.9 % NM NM 8.3 %

Adjusted operating profit margin 12.9 % 2.3 % 4.4 % 2.9 % NM NM 8.5 %

Six Months Ended

June 29, 2025

Packaged Meats

Corporate (2)

Unallocated (3)

(in millions, except percentages)

Operating profit (loss)

Litigation charges —

Reduction in workforce and optimization (5)

Office closures (7)

Plant closures —

Hog Production Reform —

Employee retention tax credits (8)

Insurance recoveries (9)

Adjusted operating profit $ 339 $ 326

Adjusted operating profit (loss) $

Operating profit margin 13.8

1 unchanged sentence

_______________________________________________

(1) Consists of our Mexico and Bioscience operations.

(2) Represents general corporate expenses for management and administration of the business.

(4) Consists primarily of accelerated depreciation charges, retention and severance costs and other incremental costs associated with our decision to exit our leased Springfield, Massachusetts dry sausage production facility.

(5) Consists of employee termination benefits and restructuring costs associated with workforce reduction and administrative process optimization initiatives.

(6) Consists of incremental costs from the destruction of property in connection with a fire at a sow farm in Laverne, Oklahoma.

(2) Consists of severance and restructuring costs associated with workforce reduction and administrative process optimization initiatives.

(3) Consists of a gain recognized in connection with the settlement of an insurance claim associated with property damage.

(7) Consists of employee termination benefit costs and other closure costs associated with the planned closure of our satellite offices in Lisle, Illinois and Kansas City, Missouri.

(8) Represents the recognition of employee retention tax credits received under the CARES Act.

(9) Consists of gains recognized in connection with settlements of insurance claims associated with past litigation and property damage.

Critical Accounting Estimates

7 unchanged sentences

Recently Issued Accounting Pronouncements

For a description of recently issues accounting pronouncements, refer to “Note 1:

For a description of recently issued accounting pronouncements, refer to “Note 1:

Summary of Significant Accounting Policies” to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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• risks arising from the Company’s global operations, including geopolitical risk, exchange rate risk, legal, tax, and regulatory risk, and risks associated with trade policies, export and import controls, and tariffs;

• our ability to execute on acquisitions, joint ventures and divestitures, including our pending acquisition of Nathan’s Famous, which remains subject to regulatory approval and other customary closing conditions;

• our ability to execute on acquisitions, joint ventures and divestitures, including our pending acquisition of Nathan’s, which remains subject to regulatory approval and other customary closing conditions;

• legal, regulatory, or market measures to address climate change and our ability to achieve our climate-related goals and strategies;

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The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made.

We undertake no obligation to update any forward-looking statements made in this

Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.

We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis