In a release dated October 1^st, Cal-Maine Foods Inc. (CALM) announced results for the 1^st Quarter FY 2025 ending August 31^st 2024. This post summarizes data provided in the Company release and the concurrently filed SEC 10-Q Report.

Cal-Maine Foods exceeded analysts’ estimates on revenue by 11 percent but the Company was apparently short on EPS.

It is noted that market conditions during Q1 2025 were favorable with an average unit revenue of $2.39 per dozen for all eggs, compared with Q1 2023 attaining a corresponding price of $1.59 per dozen. 

Cal-Maine represents a bellwether for the shell egg sector as the only public-quoted, pure-play egg company in the industry, supplying close to 20 percent of domestic shell egg consumption. The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as $ x 1,000 except EPS)

Notes: $1.2 million ‘other income,’(excluding interest income). Q1 2025 compared to $0.1 million in Q1 FY2024:

$9.8 million interest income, Q1 2025 compared to $7.3 million Q1 2024

$0.4 million loss on non-controlling interest Q1 2025 compared to $0.5 million Q1 FY203.

ISE America acquisition in Q1 2025: for $111.5 million comprised 4.7 million hens, (1.2 million cage-free)

pullets, housing, packing plants and other facilities on 4,000 acres in MD., NJ., DE. and SC. representing

a unit expenditure of $25/hen with established markets

CALM Trailing P/E =13.2

52-Week Range in Share Price: $42.25 to $77.11 50-day Moving average $70.82

Market Close, Tuesday, October 1^st $76.84 pre-release.

Post release, after-hours, 20H00 almost unchanged at $76.90.

In reviewing the CALM Q1 2025 report and the SEC 10-Q submission the following values represent key data for the most recent Quarter (Q1 FY 2024 and percentage differences in parentheses):-

• Shell egg sales attained $741,513 million in Q1 2025. Shell eggs comprised 94.3 percent of total shell egg revenue. ($443,961 million, in Q1 2023, based on 96.7 percent of shell egg revenue). (Sales value for shell eggs was up 7.9% reflecting higher average unit value).

• Dozen shell eggs sold (thousands): 309,979 (273,126; +13.5%)
• Average selling price of all shell eggs: $2.39 per dozen; ($1.59 per dozen; +50.3%).
• Average selling price of specialty eggs (excluding co-pack): $2.34 cents per dozen; ($2.28 per dozen; +2.6%).
• Average selling price of generic eggs: $2.42 cents per dozen; ($1.24 cents per dozen; +95.1%).
• Differential between specialty eggs and generic eggs: -$0.08 cents per dozen; (+$1.04 per dozen; -107.7%)
• Specialty eggs as a proportion of volume sold: 35.4%; (33.5%; -5.7%)
• Specialty eggs as a proportion of sales value: 34.2%; (47.7%; -28.3 %)
• Proportion of eggs sold that were produced by Cal-Maine and their contract flocks in Q1 2025: 86.1% (91.7%; -6.1%).
• Egg product sales in Q1 2025 attained $35.2 million or 4.5% of sales value at a unit price of $1.667 per lb. For Q1 2024, sales attained $22.2 million representing 4.8 percent of revenue with a unit price of $1.15 per lb.
• Cal-Maine Foods maintained a flock of 39.9 million hens on average (Capacity 48 million) during FY 2024 with 11.8 million pullets (capacity 12.7 million) plus parent breeders representing under two percent of the total flock. 

The following observations relate to the comparison of Q1 2025 with the corresponding Q1 2024:-

• Cal-Maine Foods was not affected by the 2022-2023 HPAI epornitic during FY 2022 or FY 2023. During Late December 2023 (Q3 FY 2024) the Chase, KS. Complex comprising 1.5 million hens and 240,000 pullets, representing 3.3% of the total flock was depopulated as a result of HPAI. On April 1^st 2024 (Q4 2024) the Farwell, TX complex was diagnosed with HPAI, requiring depopulation of 1.6 million hens and 0.34 million pullets.
• Q1 2025 represented a more favorable marketing comparison to Q1 2024 based on higher prices for shell eggs, as U.S. flocks were subjected to HPAI depletion, coupled with higher than normal seasonal consumer demand. Average shell egg price obtained by Cal-Maine was 50.3 percent lower than in Q1 2024.
• Comparing Q1 2025 with Q1 2024 gross profit was positively influenced by higher unit revenue for generic eggs but with no benefit from specialty eggs. The 17.3 percent lower feed cost to 49.4 cents per dozen was complemented by a 4.1 percent lower farm production costs attaining 42.0 cents per dozen,
• In a market characterized by high unit prices for generics, the relative contribution of specialty eggs is less important to net earnings in contrast to a down-market for conventional eggs. Normality will be restored in Q2 with generic eggs at a lower unit price and margin compared to specialty eggs as flocks are replaced. This is subject to the non-return of HPAI, anticipated during late fall months

In commenting on Q1 results Sherman Miller, president and CEO of Cal-Maine Foods, stated, “Our financial and operating results for the first quarter mark a strong start to fiscal 2025 for Cal-Maine Foods. These results reflect favorable demand for shell eggs during most of the quarter and significantly higher market prices compared with the first quarter last year. At the same time, the national egg supply has declined due to the recent outbreaks of highly pathogenic avian influenza (“HPAI”). As of September 1, 2024, the total U.S. hen population fell approximately 4.5% below the five-year average to 307.6 million layers. We have worked hard to increase our production and purchase more eggs from outside suppliers, and our team did an outstanding job bringing more eggs to the market despite this low-supply environment. Our higher volumes and sales were supported by the additional production capacity from recent acquisitions as well as consistent organic growth. Our operations ran well as we continued to extend our market reach and supply the demands of our valued customers.

Miller continued “We believe that today’s consumers are looking for affordable and nutritious protein options and that our shell eggs and egg products meet that need. In addition, our ability to offer a diverse product mix has been a distinct competitive advantage for Cal-Maine Foods. We strive to meet evolving consumer demand and provide choices that include conventional, cage-free, organic, brown, free-range, pasture- raised and nutritionally enhanced eggs. We have also expanded our product portfolio to include value- added egg products through our previous investment in Meadowcreek Foods, LLC for hard-cooked eggs and our recent strategic investment in Crepini Foods LLC (“Crepini”), a new venture offering egg products and prepared foods. We have a unique opportunity to leverage the established Crepini brand of quality products, including egg wraps, protein pancakes, crepes and wrap-ups, and extend our market reach to major retailers across the country. We believe there are significant opportunities to use our scale and offer additional choices through value-added egg products to our established customer base.

Miller concluded, “We are proud of our ability to consistently execute our growth strategy in a dynamic environment with favorable results. As the largest producer and distributor of fresh shell eggs in the U.S., we are mindful of our critical role in supporting the nation’s food supply with a differentiated product mix. As such, we continue to expand our capacity, including cage-free and other specialty egg production, through investments in innovative, scale-driven products and facilities. We have also identified opportunities to enhance our product portfolio through strategic acquisitions and joint ventures. We are fortunate to have a strong balance sheet and a disciplined capital allocation strategy that supports our growth objectives. Above all, we are focused on meeting the needs of our valued customers with quality products and outstanding support and service. We look forward to the opportunities ahead for Cal-Maine Foods.”

The 10-Q Report documented approved capital investment of $135.9 million for cage-free conversions, in FY 2025 through FY 2026 Of this total $115.4 million has been committed with $20.5 million to be expended.