SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
Jun. 28, 2026
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Smithfield Foods, Inc., together with its subsidiaries (“Smithfield,” “the Company,” “we,” “us” or “our”) produces a wide variety of fresh pork and packaged meats products primarily in the United States (“U.S.”) and markets them both domestically and internationally. We operate in a cyclical industry and our results are significantly affected by fluctuations in commodity prices for meat, livestock (primarily hogs) and grains. We are an indirect, majority-owned subsidiary of Hong Kong-based WH Group Limited (“WH Group”). These statements and notes should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K filed for the fiscal year ended December 28, 2025, which include a comprehensive description of our significant accounting policies and other information that is not included herein. Seasonality Sales, profitability and cash flow generation and use are impacted on a quarterly basis by the seasonal nature of our business. Our sales and profitability are generally higher in the fourth quarter due to the Thanksgiving and Christmas holidays. In addition, the timing of the Easter holiday can affect the comparability of our first and second quarters on both a quarter-to-quarter and year-over-year basis. We typically build inventories of certain products in anticipation of seasonal demand fluctuations, as periods of higher sales for hams occur during major holidays, while sales of ribs, smoked sausages and hot dogs are generally higher during the summer months. Hog prices also exhibit seasonal patterns, tending to rise as hog supplies decrease during the summer and decline as supplies increase during the fall and winter. These fluctuations are driven by lower farrowing performance during the winter and slower animal growth rates during the summer, which can impact our cost structure and profitability throughout the year. Our cash use is highest in the first quarter, primarily due to working capital needs related to payments to certain suppliers that are typically deferred in the fourth quarter. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”), which require us to make estimates and use assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. It is possible that actual results could differ materially from those estimates. 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. Our elected fiscal year is the 52-week or 53-week period which ends on the Sunday nearest to December 31. 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. Principles of Consolidation The condensed consolidated financial statements include the accounts of all wholly-owned subsidiaries, as well as majority-owned subsidiaries and other entities for which we have a controlling financial interest. All intercompany transactions and accounts have been eliminated. We evaluate contractual, equity and other variable interests in entities that may be deemed variable interest entities (“VIE”). We consolidate a VIE if we determine that we are the VIE’s primary beneficiary. A VIE’s primary beneficiary has both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Cash and Cash Equivalents We maintain a cash management structure with one of our banking institutions that incorporates a master netting arrangement. This structure utilizes concentration accounts, automated sweep mechanisms and zero‑balance disbursement accounts to fund disbursements, such as payroll and accounts payable. All accounts under this structure are netted and presented in either cash and cash equivalents or accounts payable on the condensed consolidated balance sheet depending on whether the net balance is positive or in an overdraft position. As of June 28, 2026 and December 28, 2025, the net overdraft balances were $23 million and $29 million, respectively, which were presented in accounts payable on the condensed consolidated balance sheets. Recently Issued Accounting Pronouncements New Accounting Pronouncements Recently Adopted In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which simplifies the estimation of credit losses on current accounts receivable and contract assets arising from transactions accounted for under ASC 606. We adopted the update in the first quarter of 2026. The standard did not impact our financial position, results of operations or cash flows. New Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance is intended to provide investors with more disaggregated information about certain line items presented in the consolidated statement of income. The update is effective for our annual report on Form 10-K for fiscal year 2027 and subsequent interim periods, with early adoption permitted. The new disclosures are required to be applied prospectively with an option for retrospective application. The update will not impact our financial position, results of operations or cash flows. In May 2025, the FASB issued ASU 2025-03 Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which aims to improve consistency in identifying the accounting acquirer in business combinations involving VIEs. The update is effective for fiscal year 2027, including interim periods within that fiscal year, with early adoption permitted. Once adopted, this update will be applied prospectively to transactions within the scope of the guidance. In September 2025, the FASB issued ASU 2025-06 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), which streamlines the capitalization guidance for internal-use software and supersedes prior guidance on website development costs. The update is effective for fiscal year 2028, including interim periods within that fiscal year, with early adoption permitted. Once adopted, this update will be applied prospectively to software development projects initiated after adoption. In September 2025, the FASB issued ASU 2025-07 Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606), which clarifies the scope of derivative accounting and provides guidance on share-based noncash consideration in revenue contracts. The update is effective for fiscal year 2027, including interim periods within that fiscal year, with early adoption permitted. Once adopted, this update will be applied prospectively to contracts within the scope of the guidance. We do not expect the adoption of this standard to have a material impact on our financial position, results of operations or cash flows. In November 2025, the FASB issued ASU 2025‑09 Hedge Accounting Improvements, which enhances guidance related to hedge accounting, including provisions for component hedging. The update is effective for fiscal year 2027, including interim periods within that fiscal year, with early adoption permitted. Upon adoption, the update will be applied prospectively to open hedging relationships and to new hedges within the scope of the guidance. We do not expect the adoption of this standard to have a material impact on our financial position, results of operations or cash flows. In December 2025, the FASB issued ASU 2025‑10 Accounting for Government Grants, which provides authoritative guidance on the recognition, measurement, and disclosure of government grants. The update is effective for fiscal year 2029, including interim periods within that fiscal year, with early adoption permitted. We do not expect the adoption of this standard to have a material impact on our financial position, results of operations, or cash flows. In December 2025, the FASB issued ASU 2025‑11 Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies interim reporting requirements and enhances consistency in disclosures. The update is effective for fiscal year 2028, including interim periods within that fiscal year, with early adoption permitted. We do not expect the adoption of this standard to have a material impact on our financial position, results of operations, or cash flows, as the amendments primarily clarify existing guidance. In December 2025, the FASB issued ASU 2025‑12 Codification Improvements, which makes 33 incremental improvements to GAAP across a broad range of topics intended to address technical corrections, unintended application of the accounting standards codification, clarifications and other minor improvements. This update is effective for fiscal year 2027, including interim periods within that fiscal year, with early adoption permitted. We do not expect the adoption of this update to have a material impact on our financial position, results of operations, or cash flows. In May 2026, the FASB issued ASU 2026‑02 Environmental Credits and Environmental Credit Obligations (Topic 818), which establishes recognition, measurement, presentation, and disclosure requirements for environmental credits and environmental credit obligations. The update is effective for fiscal year 2028, including interim periods within that fiscal year, with early adoption permitted. We do not expect the adoption of this standard to have a material impact on our financial position, results of operations or cash flows.

Smithfield Foods, Inc., together with its subsidiaries (“Smithfield,” “the Company,” “we,” “us” or “our”) produces a wide variety of fresh pork and packaged meats products primarily in the United States (“U.S.”) and markets them both domestically and internationally. We operate in a cyclical industry and our results are significantly affected by fluctuations in commodity prices for meat, livestock (primarily hogs) and grains. We are an indirect, majority-owned subsidiary of Hong Kong-based WH Group Limited (“WH Group”).

These statements and notes should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K filed for the fiscal year ended December 28, 2025, which include a comprehensive description of our significant accounting policies and other information that is not included herein.

Sales, profitability and cash flow generation and use are impacted on a quarterly basis by the seasonal nature of our business. Our sales and profitability are generally higher in the fourth quarter due to the Thanksgiving and Christmas holidays. In addition, the timing of the Easter holiday can affect the comparability of our first and second quarters on both a quarter-to-quarter and year-over-year basis. We typically build inventories of certain products in anticipation of seasonal demand fluctuations, as periods of higher sales for hams occur during major holidays, while sales of ribs, smoked sausages and hot dogs are generally higher during the summer months.

Hog prices also exhibit seasonal patterns, tending to rise as hog supplies decrease during the summer and decline as supplies increase during the fall and winter. These fluctuations are driven by lower farrowing performance during the winter and slower animal growth rates during the summer, which can impact our cost structure and profitability throughout the year.

Our cash use is highest in the first quarter, primarily due to working capital needs related to payments to certain suppliers that are typically deferred in the fourth quarter.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”), which require us to make estimates and use assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. It is possible that actual results could differ materially from those estimates. 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.

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

The condensed consolidated financial statements include the accounts of all wholly-owned subsidiaries, as well as majority-owned subsidiaries and other entities for which we have a controlling financial interest. All intercompany transactions and accounts have been eliminated.

We evaluate contractual, equity and other variable interests in entities that may be deemed variable interest entities (“VIE”). We consolidate a VIE if we determine that we are the VIE’s primary beneficiary. A VIE’s primary beneficiary has both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

We maintain a cash management structure with one of our banking institutions that incorporates a master netting arrangement. This structure utilizes concentration accounts, automated sweep mechanisms and zero‑balance disbursement accounts to fund disbursements, such as payroll and accounts payable. All accounts under this structure are netted and presented in either cash and cash equivalents or accounts payable on the condensed consolidated balance sheet depending on whether the net balance is positive or in an overdraft position. As of June 28, 2026 and December 28, 2025, the net overdraft balances were $23 million and $29 million, respectively, which were presented in accounts payable on the condensed consolidated balance sheets.

In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which simplifies the estimation of credit losses on current accounts receivable and contract assets arising from transactions accounted for under ASC 606. We adopted the update in the first quarter of 2026. The standard did not impact our financial position, results of operations or cash flows.

In November 2024, the FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance is intended to provide investors with more disaggregated information about certain line items presented in the consolidated statement of income. The update is effective for our annual report on Form 10-K for fiscal year 2027 and subsequent interim periods, with early adoption permitted. The new disclosures are required to be applied prospectively with an option for retrospective application. The update will not impact our financial position, results of operations or cash flows.

In May 2025, the FASB issued ASU 2025-03 Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which aims to improve consistency in identifying the accounting acquirer in business combinations involving VIEs. The update is effective for fiscal year 2027, including interim periods within that fiscal year, with early adoption permitted. Once adopted, this update will be applied prospectively to transactions within the scope of the guidance.

In September 2025, the FASB issued ASU 2025-06 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), which streamlines the capitalization guidance for internal-use software and supersedes prior guidance on website development costs. The update is effective for fiscal year 2028, including interim periods within that fiscal year, with early adoption permitted. Once adopted, this update will be applied prospectively to software development projects initiated after adoption.

In September 2025, the FASB issued ASU 2025-07 Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606), which clarifies the scope of derivative accounting and provides guidance on share-based noncash consideration in revenue contracts. The update is effective for fiscal year 2027, including interim periods within that fiscal year, with early adoption permitted. Once adopted, this update will be applied prospectively to contracts within the scope of the guidance. We do not expect the adoption of this standard to have a material impact on our financial position, results of operations or cash flows.

In November 2025, the FASB issued ASU 2025‑09 Hedge Accounting Improvements, which enhances guidance related to hedge accounting, including provisions for component hedging. The update is effective for fiscal year 2027, including interim periods within that fiscal year, with early adoption permitted. Upon adoption, the update will be applied prospectively to open hedging relationships and to new hedges within the scope of the guidance. We do not expect the adoption of this standard to have a material impact on our financial position, results of operations or cash flows.

In December 2025, the FASB issued ASU 2025‑10 Accounting for Government Grants, which provides authoritative guidance on the recognition, measurement, and disclosure of government grants. The update is effective for fiscal year 2029, including interim periods within that fiscal year, with early adoption permitted. We do not expect the adoption of this standard to have a material impact on our financial position, results of operations, or cash flows.

In December 2025, the FASB issued ASU 2025‑11 Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies interim reporting requirements and enhances consistency in disclosures. The update is effective for fiscal year 2028, including interim periods within that fiscal year, with early adoption permitted. We do not expect the adoption of this standard to have a material impact on our financial position, results of operations, or cash flows, as the amendments primarily clarify existing guidance.

In December 2025, the FASB issued ASU 2025‑12 Codification Improvements, which makes 33 incremental improvements to GAAP across a broad range of topics intended to address technical corrections, unintended application of the accounting standards codification, clarifications and other minor improvements. This update is effective for fiscal year 2027, including interim periods within that fiscal year, with early adoption permitted. We do not expect the adoption of this update to have a material impact on our financial position, results of operations, or cash flows.

In May 2026, the FASB issued ASU 2026‑02 Environmental Credits and Environmental Credit Obligations (Topic 818), which establishes recognition, measurement, presentation, and disclosure requirements for environmental credits and environmental credit obligations. The update is effective for fiscal year 2028, including interim periods within that fiscal year, with early adoption permitted. We do not expect the adoption of this standard to have a material impact on our financial position, results of operations or cash flows.