Strategic Performance Drivers

• Record first quarter adjusted operating profit of $339 million was driven by disciplined execution in packaged meats and a successfully restructured hog production model.

• Packaged Meats volume grew 3.5%, or 1.3% excluding the early Easter timing, reflecting resilient demand for trusted brands despite cautious consumer spending.

• The vertically integrated model provided earnings durability by allowing profit migration across segments and ensuring consistent raw material supply for value-added products.

• Hog production returned to profitability through a strategic reduction in internally produced hogs, closure of underperforming farms, and improved genetics and nutrition.

• Operational efficiency gains and a culture of continuous improvement led to an 11% reduction in corporate expenses and optimized manufacturing cost structures.

• Strategic shift toward higher-margin value-added categories, such as converting holiday hams into lunch meat, expanded purchase occasions and unit velocity.

• Market share gains in 20 of 25 key retail subcategories were supported by a 5.5% increase in points of distribution and targeted brand investment.

Fiscal 2026 Outlook and Assumptions

• Management reaffirmed full-year guidance while acknowledging macro volatility from Middle East conflicts impacting freight, packaging, and agricultural input costs.

• The company expects Q2 packaged meats performance to be broadly similar to Q1, though year-over-year comparisons will be tougher due to the Easter pull-forward.

• Strategic focus remains on reaching a long-term goal of producing approximately 30% of fresh pork needs internally to balance supply assurance with cost risk.

• The acquisition of Nathan's Famous is now expected to close in the second half of 2026 following delays in the CFIUS review process due to a partial government shutdown.

• Future profitability is expected to be supported by the new Sioux Falls processing plant, designed to be the most modern and efficient facility in the network.

Operational Risks and Structural Adjustments

• Higher-than-expected input inflation is emerging in beef and turkey raw materials, as well as diesel and resin-based packaging costs.

• Fresh pork volume decreased 2.6% in Q1 due to temporary winter storm disruptions in East Coast operations and lower export volumes to China.

• A $155 million headwind in consolidated sales was attributed to nonrecurring hog production sales to joint venture partners in the prior year.

• Management is monitoring reports of increased disease pressure in the industry, including PERS and PDP, which may impact future hog supply dynamics.