Cal-Maine Foods Inc.
09/30/2026 | Press release | Distributed by Public on 09/30/2026 04:14
Quarterly Report for Quarter Ending August 29, 2026 (Form 10-Q)
ITEM2.MANAGEMENT'S
DISCUSSION
ANDANALYSISOFFINANCIALCONDITIONANDRESULTSOF
OPERATIONS
The following
"Management'sDiscussionand Analysisof FinancialConditionand Results of Operations"
is provided to assist
readersin understandingtheCompany'sfinancialperformanceduring theperiodspresentedandsignificanttrendsthatmay
impacttheCompany'sfutureperformance.Thefollowing shouldbereadin conjunctionwith Management'sDiscussion and
Analysis of FinancialConditionand Resultsof Operationsincluded inPart II Item7 of the Company'sAnnualReporton Form
10-K forits fiscal yearended May30, 2026(the "2026AnnualReport"), andthe accompanyingfinancialstatementsandnotes
includedin PartIIItem8 ofthe2026AnnualReportandin
Part I Item 1
of this QuarterlyReporton Form 10-Q ("Quarterly
Report").
This QuarterlyReportcontainsnumerousforward-looking statementswithin themeaningof Section27A of theSecurities Act
of1933(the"Securities Act")andSection21EoftheSecurities ExchangeAct of1934(the"ExchangeAct") relatingtoour
business,includingpotentialfuturesupplyofanddemandforourproducts,potentialfuturecornandsoybeanprice trends,
potentialfutureimpactonourbusinessofhighlypathogenicavianinfluenza("HPAI"),estimatedfutureproductiondata,
expectedconstructionschedules,projectedconstructioncosts, potentialfutureimpacton our businessof inflationandchanging
interestrates,potentialfutureimpactonourbusinessofnewlegislation,rulesorpolicies,potentialoutcomesoflegal
proceedings,includinglosscontingencyaccrualsandfactorsthatmayresultinchangesintheamountsrecorded,other
projectedoperatingdata,including anticipatedresults of operationsand financialcondition,andpotentialfuturecashreturnsto
stockholdersincluding thetiming andamountofanyrepurchasesunderour sharerepurchaseprogram.Such forward-looking
statementsareidentifiedbytheuseofwordssuchas"believes,""intends,""expects,""hopes,""may,""should,""plans,"
"projected,""contemplates,""anticipates,"orsimilarwords.Actualoutcomesorresultscoulddiffermateriallyfromthose
projectedin the forward-looking statements.The forward-looking statementsare basedon management'scurrent intent,belief,
expectations,estimates, andprojectionsregarding the Companyandits industry. Thesestatementsare notguaranteesof future
performanceand involve risks,uncertainties, assumptions,and other factorsthatare difficultto predict andmaybe beyondour
control.Thefactorsthatcouldcauseactualresults to differmateriallyfromthose projectedin the forward-looking statements
include,amongothers,(i) changesinwholesaleshell eggmarketprices,(ii) changesinthedemandforshell eggsandour
preparedfoodsofferings,(iii) increases infeedcostsfor our shell egg operationsas well as increases in inputcosts forprepared
foods,(iv) ourabilitytopredictandmeetdemandforcage-freeandotherspecialtyeggs, (v)the risks andhazardsinherent in
shell egg, eggproducts andprepared foodsoperations(including, asapplicable, disease,pests,weather conditions,and potential
forproductrecall), including butnotlimited tothecurrentoutbreakofHPAIaffectingpoultryin theU.S.,Canadaandother
countries thatwas first detectedin commercialflocks inthe U.S.in February2022 andthat impactedour flocksin the thirdand
fourthquartersoffiscal2024andagainin March2026,(vi) risks, changes,or obligationsthatcould result fromour recentor
future acquisitionof new flocksor businesses,such asour acquisitionof Echo LakeFoods completedJune 2, 2025,andrisks or
changesthatmaycauseconditionstocompletinga pendingacquisitionnot tobe met,(vii)our ability tosuccessfully integrate
andmanagerecentlyacquiredbusinesses,likeEchoLakeFoods,andrealizetheexpectedbenefitsofsuchacquisitions,
includingsynergies,costsavings,reductioninearningsvolatility,marginexpansion,financialreturns,expandedcustomer
relationships,or salesor growthopportunities,(viii) our abilitytoproduce,supplyanddistribute shell eggs and preparedfoods
efficientlyand reliably,(ix) ourability to competeeffectivelywith existingcompetitorsand new marketentrants,retain existing
customers,acquirenew customersandgrow our productmix including our preparedfoodsproductofferings, (x) the impactsof
government,customerandconsumerreactionstohigh marketprices foreggs, including, withoutlimitation,potentialnew or
expandedgovernmentregulations, (xi) risks relating to potentialchangesin inflation, interestrates andtradeandtariffpolicies,
(xii) the lossor expirationofanyregistered trademarksor otherintellectualpropertythatwe use in our business, (xiii) adverse
resultsinpendinglitigationandotherlegalmatters,and(xiv) global instability,including asaresult ofgeopoliticalconflicts
andotheruncertaintiesand(xv) therisk factorsset forthin Part I Item1A Risk Factors ofour 2026AnnualReport, aswellas
thoseincludedin otherreportswe file fromtimetotimewith the Securities andExchangeCommission(the "SEC") (including
ourQuarterlyReportsonForm10-QandCurrentReportsonForm8-K). Theactualtiming,numberandvalueofshares
repurchasedunderoursharerepurchaseprogramwill bedeterminedbymanagementin its discretionandwilldependona
numberoffactors,includingbutnotlimitedto,themarketprice ofourCommonStockandgeneralmarketandeconomic
conditions.Thesharerepurchaseprogrammaybesuspended,modifiedordiscontinuedatanytimewithoutpriornotice.
Readers arecautionednot to placeunduereliance onforward-looking statementsbecause,while webelieve the assumptionson
which theforward-looking statementsare based are reasonable,there canbe no assurancethat these forward-looking statements
willproveto be accurate.Further, forward-looking statementsincluded herein aremadeonly asof therespective datesthereof,
or if nodateis stated, asof thedatehereof. Exceptas otherwise requiredby law, we disclaimanyintent or obligationtoupdate
publicly theseforward-looking statements,whether becauseof new information,futureevents, or otherwise.
Index
COMPANYOVERVIEW
Cal-MaineFoods,Inc.("Cal-MaineFoods,"the"Company,""we," "us,""our")is thelargest egg companyin theU.S.anda
leadingplayerin theegg-basedfoodindustry,headquarteredin Ridgeland,Mississippi. With astrong nationalfootprint,Cal-
MaineFoods providesnutritious, affordable,andsustainableprotein tomillions of householdsevery day.
TheCompany'sshelleggportfoliospansthefulleggvalueladder-fromconventionaltospecialty,includingcage-free,
nutritionallyenhanced,organic,brown,pasture-raisedandfree-rangeeggs-servingretail,foodservice,andindustrial
customersnationwide.Cal-MaineFoodsalsoparticipatesinthegrowing preparedfoodssector,withofferingssuchaspre-
cookedegg patties, omelets,foldedandscrambledegg formats,hard-cookedeggs, pancakes,waffles,andspecialtywraps. Our
brandedportfolioincludesEggland'sBest®,LandO'Lakes®,FarmhouseEggs®,4Grain®, Sunups®,Van's®,MeadowCreek
Foods®, andCrepini®.
WesellourproductstoadiversegroupofcustomerslocatedthroughoutthemajorityoftheU.S., includingnationaland
regionalgrocerystorechains,clubstores, companiesservicing independentsupermarketsin theU.S., foodservicedistributors
servingrestaurants,conveniencestores,healthcareandeducationfacilities,andhotelsandfoodmanufacturersandother
customersthatuseour productsas ingredients or inputsin further processing,andwe aim tomaintainefficient,state-of-the-art
operationslocatedclose to our customers.
Our fiscal yearends on theSaturdayclosest to May 31.Eachof thethree-monthperiods endedon August 29,2026andAugust
30,2025included 13weeks. Allreferencesherein to afiscal yearor quartermeansour fiscal yearor quarter,as applicable,and
all referencesto ayearmeana calendaryear.
Ourstrategyincludesthreeprimarypriorities: expandingspecialtyshell eggs andpreparedfoods,pursuing disciplinedgrowth
through acquisitionsandleveraging our scale,vertical integration,operationalexcellence andfinancialstrength.
Ouroperatingresults aremateriallyimpactedbymarketprices foreggs andfeedgrains (cornandsoybeanmeal),which are
highlyvolatile,independentofeachother,andoutofourcontrol.Generally,highermarketprices foreggs haveapositive
impacton our financialresults while higher marketprices for feedgrains havea negativeimpacton our financialresults.
Wesell our shell eggs undermarket-based,hybrid,andcost-pluspricing arrangements.Hybrid arrangementsincorporateboth
wholesalemarketprices andproductioncosts.Cost-plusarrangementsarebasedon productioncosts andinclude grain-based
pricing. Approximatelyhalfofourconventionalshell egg salesarepriced basedonwholesalemarketprices. Theremaining
approximatelyhalfare priced underhybrid andcost-plus arrangements,with grain-based pricing representing oneformof cost-
plus pricing.Mostofourspecialtyshell egg salesarepriced basedonproductioncosts,althoughsome cage-free eggs are sold
undermarket-basedarrangements.As aresult,specialtyshell egg pricesgenerallyfluctuateless thanconventionalshell egg
prices.We donot sell eggsdirectly toconsumersor set retail egg prices.
Retailsalesofshelleggshistoricallyhavebeenhighestduringthefallandwintermonthsandlowestduringthesummer
months.Prices forshell eggs fluctuatein responsetoseasonaldemandfactorsanda naturalincrease in egg productionduring
thespring andearlysummer.Historically,shell eggpricestendtoincreasewiththestartoftheschoolyearandtendtobe
highest priortoholidayperiods, particularlyThanksgiving, ChristmasandEaster.As a result, we havehistorically experienced,
andmayexperiencein thefuture,lower shell egg selling prices, sales volumes andshell eggsales (andhaveincurred, andmay
incurin thefuture,netlosses) in ourfirst andfourthfiscalquartersendingin August/SeptemberandMay/June,respectively.
For example,we incurred anet loss in thefourth quarterof fiscal 2026 andfirst quarterof fiscal2027.Additionally,demandfor
specialtyshell eggsmayincreasewhenconventionalshell egg prices aresignificantlyhigher, resulting inhigher salesvolume
forspecialtyshell eggs.Becauseoftheseasonalandquarterlyfluctuations,comparisonsofoursalesandoperatingresults
betweendifferentquarterswithin a single fiscal yearare notnecessarily meaningfulcomparisons.
Our industryhasbeengreatlyimpactedbyseveraloutbreaksofHPAIin recent years.Followingthe HPAIoutbreaksin 2015,
there were noreportedsignificant outbreaksof HPAIin the commercialtableegg layer flocks untilFebruary throughDecember
2022.Thereafter,there were no HPAIcases affectingcommerciallayers until November2023.Since 2023,outbreaksof HPAI
havecontinuedtooccurin U.S. poultryflocks.In2024and2025,40.2million and45.2million commerciallayerhensand
pullets weredepopulatedduetoHPAI,respectively.To datein 2026, throughSeptember28, 2026,19.2 million layer hensand
pullets havebeen depopulateddue toHPAI.However,the recentrecovery ofthe layerhen populationin the U.S. appearsto be
outweighingthe impactof depopulation.
Index
An importantcompetitiveadvantagefor Cal-Maine Foodsis our ability to meetour customers'evolving needswith a favorable
mix ofbrandedandprivate-label productsof conventionalandspecialtyshell eggs,including cage-free, nutritionallyenhanced,
organic,brown, pasture-raised andfree-range eggs, as well aspreparedfoodsandegg products.
TheCompanypreviouslyoperatedas oneoperatingandreportablesegment. Effectivein the fourthquarterof fiscal2026,the
Companydeterminedits operationsareorganizedintothreereportableoperatingsegments:(1) ConventionalShell Eggs; (2)
SpecialtyShell Eggs; and(3) PreparedFoods.As we expandedourpreparedfoodsproductofferingsthroughoutfiscal2026,
theseoperatingsegmentsalignwithhowtheCompany'smanagementreviews operatingresults andmakesdecisionsabout
resourceallocationandstrategic initiatives. All priorfiscal yearperiods havebeen recastto reflect thenew reportablesegments.
Forfurtherinformationonourreportablesegments,see
Note 9 - Segment Reporting
in PartI, Item1. NotestoCondensed
ConsolidatedFinancialStatements.
ACQUISITIONS
Throughoutour history,we haveacquiredother businessesin our industry.Since 1989,we haveacquiredandintegrated28
businesses.Duringthelastcompletedfiscalyearandtodateinfiscal2027,wehavemadethefollowingsignificant
acquisitions.
EffectiveJuly 10,2026,theCompanyacquiredtheEggland'sBest®franchiseterritory intheNortheastfor$25 million. The
acquisitiongives theCompanytheexclusiveright todistributeandsell
Egg-Land'sBest®
and
LandO' Lakes®
brandedeggs
in Maine,Massachusetts,New Hampshire,RhodeIsland,andselect key areasin Vermont,New York, andConnecticut.
EffectiveMay12, 2026,we acquiredcertainassetsof theVan'sFoods ("Van's")business ofSaraLee Frozen Bakery,LLC for
approximately$24.8million. Theassetsacquiredareexpectedtohelpsupportourstrategytodiversifyourbusinessmodel,
grow in preparedfoodsbusiness-to-retail, anddeliver greater valueacross thesupply chain.
EffectiveMarch2, 2026,we acquiredthe shell egg, eggproducts,andpreparedfoodsassetsof CreightonBrothers LLCandits
affiliateCrystalLakeLLC(collectively,"Creighton"),forapproximately$129.3million.Theacquiredassetsinclude
commercialshell egg productionandgrading withcapacityofapproximately3.2 million layers, including 500 thousandcage-
freelayers,and865thousandpullets, afeedmill, and1,007acresofland,aswell as anegg productsandhard-cookedegg
processing facilitylocatednearWarsaw,Indiana.The transactionexpandsthe geographicscale ofour shell eggplatformwhile
also addingnearbyliquid egg capacitythatwe believe willstrengthenour integratedvaluechain.
EffectiveOctober10,2025,weacquiredcertainassetsofCleanEgg, LLC("CleanEgg") basedinLangwood,Texas,for
approximately$23.7 million. The assetsacquiredincluded 677 thousandbrown cage-free andfree-range layersandpullets, and
other inventory,machineryandequipmentrelatedto its contractproductionandegg processing business.
EffectiveJune 2, 2025,we acquiredEcho LakeFoods, LLC andcertainrelated companies(collectively"Echo Lake Foods")for
approximately$289.5million.EchoLakeFoodsis basedinBurlington,Wisconsinandproduces,packages,marketsand
distributesprepared foods,includingpre-cooked eggpatties, omelets,folded andscrambled egg formats,pancakesandwaffles.
Theacquisitionhasexpandedourpreparedfoodsproductline andcustomerbase.Ourpreviouslyannouncedprojectsto
increase efficiencyandexpandproductioncapacityare ongoing andexpectedto continuethroughoutmid to latefiscal 2027.
EXECUTIVEOVERVIEW
Forthefirst quarteroffiscal2027,we recognizednetsalesof$539.6million andanetloss of$56.2million. Werecordeda
gross profit of$403thousandcomparedto $311.3million for the first quarterof fiscal2026.The decreasein gross profit was a
result ofadecreasein thenetaverageselling price ofshell eggs, primarily conventionalshell eggprices, andto alesser extent,
a decreasein volumesof specialtyeggs sold and preparedfoodsales.
Ouraverageconventionalshell eggpriceper dozenforthefirst quarteroffiscal2027declined59.3%comparedtothefirst
quarteroffiscal2026.Averagespecialtyshell egg price per dozen declined10.7%comparedto thefirst quarterof fiscal2026.
Egg priceshavedeclinedwith therepopulationoftheegg layerflockduring fiscal2026.According totheUSDA, the sizeof
thelayerhenflockwas318.7million hensatSeptember1, 2026,comparedtothefive-yearaverageof312.1million hens.
AmericanEgg BoardestimatestheU.S. laying flockasofJune2026at336-343million hens, basedon producerassessment
datacollectedacrossthecommercialegg industry,materiallyaboveUSDA'spublishedestimateandfurtherindicativeof
abundantegg supplies.AccordingtotheUSDA, egg-typechickshatchedduring August2026totaled50.8million, down12
percentfromAugust 2025.
Index
In
the firstquarter offiscal 2027, preparedfoodsaccountedfor $63.0million or 11.7% ofour net sales.Preparedfoodsales for
thefirst quarteroffiscal2027decreased$9.4million, compared tothe first quarterof fiscal2026, primarilydue totemporary
reductionsin productionvolumesaswe continueourproductionexpansionandoptimizationeffortsthatbeganin mid-fiscal
2026.
Wholesaleshell egg prices arevolatile,cyclical, andimpactedbyanumberoffactors,including consumerdemand,seasonal
fluctuations,thenumberandproductivityoflaying hensin theU.S., outbreaksofagriculturaldiseasessuchasHPAI,severe
weatherpatternsandretailers go-to-marketstrategiesandhowtheymanagetheir inventories. Webelieve the recentdecline in
wholesaleegg pricesprimarilyreflectsimprovedegg supply,following disruptionsassociatedwith HPAIin fiscalyear2025.
Comparedtothefirstquarterofthepriorfiscalyear,improvedpipelineavailabilityappearstohavereducedtheneedfor
acceleratedpurchasingor inventorybuilds byretailers andfoodserviceoperators.As aresult, wholesaleshell egg prices have
declined,while retailshell egg priceshaveadjustedmore gradually.
RESULTSOF OPERATIONS
CONSOLIDATEDRESULTS
ThirteenWeeksEnded
2027 Comparedto
2026 Comparedto
August 29,2026
August 30,2025
August 31,2024
2026% Change
2025% Change
Net sales
$
539,607
$
922,602
$
785,871
(41.5)
%
17.4
%
Operatingincome(loss)
(82,165)
249,184
186,957
(133.0)
33.3
Totalother income
7,969
14,081
10,996
(43.4)
28.1
Incometaxexpense(benefit)
(17,992)
64,158
48,363
(128.0)
32.7
Less:Net income(loss)
attributableto noncontrolling
interest
2,411
(233)
(386)
(1,134.8)
(39.6)
Net income(loss) attributable
to Cal-Maine Foods,Inc.
$
(58,615)
$
199,340
$
149,976
(129.4)
%
32.9
%
Net Sales
Net salesforthefirst quarteroffiscalyear2027was$539.6million comparedto$922.6million in thefirst quarteroffiscal
2026,adecreaseof$383.0million or 41.5%.Thedecreasewasprimarilyduetothedecreasein pricesfor conventionalshell
eggs, asthelayerpopulationrecoveredfromthe HPAIoutbreaks.For further discussion,refer to "SegmentResults" within this
section.
Net salesforthefirst quarteroffiscalyear2026was$922.6million comparedto$785.9million in thefirst quarteroffiscal
2025,
an
increaseof$136.7millionor17.4%.TheincreasewasprimarilyduetoacquisitionswithinourPreparedFoods
segmentas well asanincrease in specialtyvolumesandincreases in prices for conventionalandspecialtyshell eggs.
OperatingIncome(Loss)
For thefirst quarterof fiscal2027, operatingloss was $82.2million comparedto operatingincomeof $249.2million in the first
quarteroffiscal2026,adecreaseof$331.3million, or 133.0%.Thedecreasewas primarily attributableto theloss within our
ConventionalShell Eggs segment asthe salesprice declinedfromthe comparableprior year period.
For the firstquarter offiscal 2026, operating incomewas $249.2million comparedto operatingincomeof $187.0million in the
first quarteroffiscal2025,anincreaseof$62.2million, or 33.3%. Theincreasewasprimarilyattributabletotheincreaseof
sales prices forconventionalandspecialtyshell eggsandcontributionsfromour preparedfoodssegment.
Index
Other Income(Expense)
Totalotherincome(expense)consistsofitemsnotdirectly chargedto,or relatedto,operationssuchasinterestincomeand
expense,equityin income or loss ofunconsolidatedentities, andpatronagedividends, amongother items.Patronagedividends
are paidto us fromour membershipin the EB cooperative.
Werecordedinterestincomeof$8.3million in thefirst quarterof fiscal2027, comparedto $13.0million in the first quarterof
fiscal 2026, primarilydue to loweraveragecash andcash equivalentsandinvestmentsecurities available-for-sale balances.We
recordedinterestexpenseof$247thousandand$150thousandinthefirstquarteroffiscal2027and2026,respectively,
primarilyrelatedto commitmentfees underour Credit Facility (definedbelow).
For thefirst quarteroffiscal 2026,we earned$13.0million of interest incomecomparedto $9.9million for the sameperiod
of
fiscal 2025,primarilydue to higher averagecash andcash equivalentsand investmentsecurities available-for-sale balancesand
higher yields.Werecorded interestexpenseof $150 thousandand $160thousandfor thefirst quartersof fiscal2026and2025,
respectively,primarilyrelatedto commitmentfees underour Credit Facility.
IncomeTaxes
For the firstquarter offiscal 2027, we recognized a pre-taxloss of $74.2million, comparedto pre-taxincomeof $263.3million
inthefirstquarteroffiscal2026.Werecordedanincometaxbenefitof$18.0million forthefirst quarteroffiscal2027,
reflecting aneffectivetaxrateof24.2%. For thefirst quarterof fiscal2026, we recordedincometaxexpenseof $64.2million,
reflecting aneffectivetaxrateof24.4%. For thefirst quarterof fiscal2025,we recorded incometaxexpense
of
$48.4million,
reflecting aneffectivetaxrate of24.4%.
Itemscausingoureffectivetaxrate todiffer fromthe federalstatutoryincometaxrate of21% arestateincometaxes,certain
federaltaxcredits andcertainitems includedin income or loss for financialreporting purposesthatare notincluded in taxable
incomeor lossfor incometaxpurposes, including taxexemptinterest income,certainnondeductibleexpenses,andnet income
or lossattributableto noncontrollinginterest.
Net Income(Loss) Attributableto NoncontrollingInterest
Net incomeattributabletononcontrollinginterestwas$2.4million forthefirst quarteroffiscal2027comparedto netloss
of
$233thousandand$386thousandforthefirstquarteroffiscal2026and2025,respectively.Theincreasein netincome
attributabletononcontrollinginterestcomparedtothefirst quarterof fiscal2026was dueto a547%increase in salesvolume
fromour jointventureCrepini Foods inconnectionwith our ongoing expansionproject.
Net Income(Loss) Attributableto Cal-Maine Foods,Inc.
Net lossattributabletoCal-MaineFoods,Inc.forthefirst quarteroffiscal2027was$58.6million, or $1.26per basicshare,
comparedto Net income attributableto Cal-Maine Foods,Inc. of$199.3million, or $4.13 per basicand$4.12per diluted share
forthefirst quarterof fiscal2026, andnet incomeattributableto Cal-Maine Foods,Inc. forthe first quarterof fiscal2025was
$150.0million, or $3.08per basic and$3.06per diluted share.
SEGMENTRESULTS
ConventionalShell Eggs
ThirteenWeeksEnded
2027 Comparedto
2026 Comparedto
August 29,2026
August 30,2025
August 31,2024
2026% Change
2025% Change
Net sales
$
201,683
$
498,433
$
472,350
(59.5)
%
5.5
%
Cost ofsales
250,481
312,205
308,879
(19.8)
1.1
Selling, generaland
administrative
22,247
17,992
17,956
23.6
0.2
Segment income(loss)
$
(71,045)
$
168,236
$
145,515
(142.2)
%
15.6
%
Index
First Quarter- Fiscal 2027comparedto fiscal 2026
-
Net salesdecreased$296.8million, or 59.5%comparedto thefirst quarterof fiscal2026, primarilydue toa decrease
of
59.3%inpricesforconventionalshelleggs,resultingina$293.3milliondecreaseinnetsales.Volumesfor
conventionalshell eggs were relativelyflatcomparedto thefirst quarterof fiscal2026.
-
Costofsalesdecreased$61.7million, or 19.8%comparedto thefirst quarterof fiscal2026, primarilydue toa 19.2%
decrease inthe cost perdozen sold.Cost per dozensold decreasedprimarilydue to a 53.9%decreasein the price and
a
30.6% decreasein volumeof outsideegg purchasescomparedto theprior period.
-
Selling,general, andadministrativeexpensesincreased$4.3million, or 23.6%comparedtothefirst quarterof fiscal
2026,due to
a $
3.2million increasein deliveryexpensesprimarilyduetorising fuel costsaswell as theadditionof
Creighton.
First Quarter- Fiscal 2026comparedto fiscal 2025
-
Net salesincreased$26.1million, or 5.5%comparedto thefirst quarterof fiscal2025, primarilydue toanincrease of
2.8%in pricesforconventionalshell eggs, resulting in a$13.7million increasein netsales, aswell as anincreaseof
2.6% inconventionalshell egg dozens sold, resultingin a$12.4million increasein net sales.
-
Costofsalesincreased$3.3million, or1.1%comparedtothefirst quarteroffiscal2025,primarilyduetoa2.6%
increase indozenssold,partiallyoffsetby a1.5% decreasein cost per dozensold.
SpecialtyShell Eggs
ThirteenWeeksEnded
2027 Comparedto
2026 Comparedto
August 29,2026
August 30,2025
August 31,2024
2026% Change
2025% Change
Net sales
$
236,932
$
275,590
$
247,706
(14.0)
%
11.3
%
Cost ofsales
197,623
184,575
168,890
7.1
9.3
Selling, generaland
administrative
24,372
26,819
24,923
(9.1)
7.6
Segment income
$
14,937
$
64,196
$
53,893
(76.7)
%
19.1
%
First Quarter- Fiscal 2027comparedto fiscal 2026
-
Net salesdecreased$38.7 million,or 14.0%comparedto the first quarterof fiscal2026, primarilydue toa decreaseof
10.7%in pricesofspecialtyshell eggs, resulting in a$28.3million decreasein netsalesaswellas
a
3.8%decreasein
specialtydozenssold, resulting ina$10.4million decreasein netsales. The prior-yearperiod benefitedfromatypical
pricing relationshipsbetweenconventionalandspecialtyshell eggs thattemporarilyaccelerateddemandforcertain
specialtyshelleggcategories.Duringthefirstquarteroffiscal2027,lower volumesreflectedamorehistorically
typicaldemandrelationshipacross theconventionalandshell eggcategories.
-
Costofsalesincreased$13.0million, or 7.1%comparedto thefirst quarterof fiscal2026, primarilydue toan11.3%
increasein thecostper dozensold attributableto increasefeedandproductioncosts, partiallyoffsetby
a
decreaseof
3.8%in sales volume.
-
Selling, general,andadministrativeexpensesdecreased$2.4million, or 9.1%comparedtothefirst quarteroffiscal
2026,primarilyduetoa$3.2million marketingexpensereimbursement,partiallyoffsetby higher delivery costsdue
to rising fuel.
First Quarter- Fiscal 2026comparedto fiscal 2025
-
Net salesincreased$27.9 million,or 11.3%comparedto the first quarterof fiscal 2025, primarilydue to an increaseof
8.5%in specialtydozenssold, resulting ina$21.1million increasein netsalesaswell as a2.5% increasein prices of
specialtyshell eggs, resultingin a$6.8 millionincrease innet sales.
Index
-
Costofsalesincreased$15.7million, or 9.3%comparedtothefirst quarteroffiscal2025, primarilydue toan8.5%
increase insales volume.
-
Selling, general,andadministrativeexpensesincreased$1.9million, or 7.6%comparedtothefirst quarteroffiscal
2026,primarily dueto a$1.3 million increasein deliverycharges asspecialty dozenssold increased8.5% comparedto
fiscal 2025.
PreparedFoods
ThirteenWeeksEnded
2027 Comparedto
2026 Comparedto
August 29,2026
August 30,2025
August 31,2024
2026% Change
2025% Change
Net sales
$
62,995
$
72,368
$
-
(13.0)
%
N.M.
%
Cost ofsales
48,346
53,471
-
(9.6)
N.M.
Selling, generaland
administrative
6,807
5,676
-
19.9
N.M.
Segment income
$
7,842
$
13,221
$
-
(40.7)
%
N.M.
%
N.M. -Not Meaningful
First Quarter- Fiscal 2027comparedto fiscal 2026
-
Netsalesdecreased$9.4million, or13.0%comparedtothefirstquarteroffiscal2026,primarilyduetoa19.3%
decreasein poundssold, whichhada$14.0million impactonnetsales, partiallyoffsetbya7.9%increasein price,
whichhada$4.6million impactonnetsales.Thedecreasein volumesis primarilyduetotemporaryreductionsin
productionvolumesas we continueour productionexpansionprojectsandproductionoptimizationeffortsthatbegan
in mid-fiscal 2026.
-
Costofsalesdecreased$5.1million,or 9.6%comparedtothe first quarterof fiscal2026, primarilydue todecreased
sales volumeof 19.3%,partiallyoffsetby a12.1% increasein the cost perpoundsold, due tohigher operating coststo
supportour productioncapacityexpansionprojectsandlower sales volumes.
-
Selling, general,andadministrativeexpensesincreased$1.1million, comparedtothefirstquarteroffiscal2026,
primarilydue toincreaseddelivery chargesdue torising fuel costs.
UnallocatedIncome(Expenses)
ThirteenWeeksEnded
2027 Comparedto
2026 Comparedto
August 29,2026
August 30,2025
August 31,2024
2026% Change
2025% Change
Other - segmentincome(loss)
$
(8,374)
$
12,219
$
2,874
(168.5)
%
325.2
%
UnallocatedcorporateSG&A
(a)
(24,609)
(16,072)
(16,996)
53.1
(5.4)
Gain (loss)on involuntary
conversions
-
7,488
(146)
(100.0)
(5,228.8)
Gain (loss)on disposalof
fixed assets
(916)
(104)
1,817
780.8
(105.7)
(a)
Unallocatedcorporateselling,generalandadministrative("SG&A")expensesprimarilyconsistsofunallocated
corporateoverheadcosts,administrativeexpenses,andamortizationthatarenotdirectly relatedor allocatedto the
operatingsegments.
Index
First Quarter- Fiscal 2027comparedto fiscal 2026
-
Other -segmentloss was$8.4million,
a
decreaseof$20.6million, or 168.5%comparedto thefirst quarterof fiscal
2026.Thedecreasewasprimarilyduetoa65.3%decreasein egg productssalesprices, partiallyoffsetbya56.2%
increase inegg productsvolumes.
-
UnallocatedcorporateSG&A increased$8.5million, or 53.1%, comparedto thefirst quarterof fiscal2026, primarily
duetoanincreaseininsuranceexpensesandanincreaseinlegalandprofessionalfees,partiallyoffsetbya$2.5
million reductionin contingentliability earn-out forFassio.
-
In
thefirstquarteroffiscal2026,we recognized
a
$7.5million gainoninvoluntaryconversionsrelatedtobusiness
interruptioninsurancerecoveriesassociatedwith a weather-related eventthatoccurred in fiscal2021.
First Quarter- Fiscal 2026comparedto fiscal 2025
-
Other -segmentincomeincreased$9.3million, or 325.2%comparedtothefirst quarterof fiscal2025.The increase
was primarilydue toa 35.9%increase in egg productssales price andan8.3% increasein eggproductssales volume.
-
UnallocatedcorporateSG&A decreased$924 thousand,or 5.4%, comparedto thefirst quarterof fiscal2025,due toa
decreasein insuranceexpense,slightly offsetbyhigher legal andprofessionalfees aswellas additionalamortization
of intangiblesthatwere acquiredfromour acquisitionin the first quarterof fiscal2026.
LIQUIDITY ANDCAPITALRESOURCES
WorkingCapitalandCurrent Ratio
Our working capitalwas $1.3billion at August 29, 2026,comparedto $1.4billion at May30, 2026.The calculationof working
capitalis definedascurrentassetsless currentliabilities. Our currentratiowas7.7atAugust 29,2026and
at
May30,2026.
The currentratio is calculatedby dividing current assetsby currentliabilities.
CashFlows Provided by(Used In)OperatingActivities
For thethirteenweeks endedAugust 29,2026,$101.4million in net cashwas usedin operatingactivities, comparedto $278.6
million providedbyoperatingactivitiesforthecomparableperiodin fiscal2026.Thedecreasein cashflow fromoperating
activitiesresultedprimarilyfromadecreaseincashcollectionsfromcustomersasaresult ofdecreasedprices ofshell eggs
comparedto theprior fiscal yearperiod.
CashFlows Provided by(Used in)InvestingActivities
ForthethirteenweeksendedAugust29,2026,$110.7million innetcashwasprovidedbyinvestingactivities,primarily
relatingtosales
of
investmentsecurities, comparedto$409.7million usedin investingactivitiesin thesameperiodoffiscal
2026,primarilyrelatedtotheEchoLakeacquisition.Purchasesofinvestmentsecurities were $49.6 million during the thirteen
weeks endedAugust 29,2026,andsalesandmaturitiesofinvestmentsecurities were $211.8million. Sales andmaturitiesof
investmentsecuritieswere $181.1million in theprior fiscalyearperiodwhile purchasesofinvestmentsecurities were $270.3
million duringtheperiod.CashpaidfortheEBfranchiseterritoryacquisitionwas$25million inthethirteenweeks ended
August 29,2026.Cashpaidforbusinessacquisitions,net was$275.3million in the prior-year period, relatedto theEcho Lake
acquisition.Purchasesofproperty,plantandequipmentwere $26.6million and $45.3million in the first quarterof fiscal2027
and2026, respectively,primarily reflecting progresson our constructionprojects.
CashFlows Used in FinancingActivities
Forthethirteenweeks endedAugust 29,2026,$5.1million in netcashwasusedin financingactivities,comparedto$114.2
million usedin financingactivitiesin thesameprior fiscalyearperiod,primarilyrelating topaymentofdividendsin thefirst
quarteroffiscal2026.Purchasesofcommonstockbytreasurywere $5.1million during thethirteen weeksendedAugust 29,
2026,primarilyduetotherepurchaseofcommonstockundertheCompany'ssharerepurchaseprogram.Therewereno
dividends paidin the first quarterof fiscal2027,comparedto $114.2million paid in the sameperiod offiscal 2026.
Index
Net Changein CashandCashEquivalents
As ofAugust 29,2026,cash,cashequivalentsandrestrictedcashincreased$4.2million since May30, 2026,comparedto
a
decreaseof$245.3millionduringthesameperiodoffiscal2026.Theincreaseduringthefirstquarteroffiscal2027is
primarilydue tosale andmaturitiesof investmentsecurities, offsetby thecashused in operations.The decreaseduring the first
quarterof fiscal2026was primarily dueto theuse ofcashfor theEcho LakeFoods.
Credit Facility
OnNovember15,2021,weenteredintoanAmendedandRestatedCreditAgreementthatprovidedforaseniorsecured
revolving creditfacility,in aninitial aggregate principal amountof upto $250million with a five-yearterm expiring November
31, 2026.
On August31,2026,we enteredintoa SecondAmendedandRestatedCredit Agreement effectiveas ofthatdate(the "Credit
Agreement"),which amendedand restatedthe Company'sAmended andRestatedCredit Agreement, datedNovember 15,2021
(asamendedfromtimetotime). TheCredit Agreementprovidesus withasenior unsecuredrevolving creditfacilitywith an
initial aggregateprincipalamountofupto$250million (the"Revolver"),including a$25million sublimit forthe issuanceof
standbylettersofcreditanda$25million sublimitforswingline loans(collectively,the"CreditFacility").Inaddition,the
Credit Facilityincludesanaccordionfeaturepermittingus, withthe consentof theadministrativeagent,to increasethe Credit
Facilitybyupto$250million intheaggregatewithoneormoreincrementalseniortermloansor anincreasein revolving
commitmentsundertheRevolver.TheCreditFacilityhasatermoffiveyearsandwillmatureonAugust 31,2031.As of
September30,2026,noamountswereborrowedundertheCreditFacilityandwe had$5.9million in outstandingstandby
letters ofcredit issuedunderourCredit Facility for thebenefitof certaininsurancecompanies.Refer toPart I, Item1. Notes to
CondensedConsolidatedFinancials,
Note 11 - Subsequent Events
, for furtherinformationregarding the Credit Facility andthe
Credit Agreement.
Share RepurchaseProgram
InFebruary2025,theCompany'sBoardofDirectors (the"Board")approveda$500million share repurchaseprogram.The
sharerepurchaseprogramauthorizestheCompany,in management'sdiscretion, torepurchasesharesofourcommonstock
fromtimetotimeforanaggregatepurchasepriceupto$500million (exclusiveofanyfees,taxes,commissionsor other
expensesrelatedtosuchrepurchases),subjectto marketconditionsandother factors.The actualtiming, numberandvalueof
sharesrepurchasedundertheprogramwill bedeterminedbymanagementin its discretionandwilldependonanumberof
factors,including, butnotlimited to, the marketprice of our commonstock andgeneral marketandeconomicconditions.The
Companyrepurchased66,601during thefirst quarterof fiscal2027andno sharesduring the first quarterof fiscal2026under
theprogram.As oftheend ofthe first quarterof fiscal2027, we hadremaining authorizationto purchaseup to$315.7million
undertherepurchaseprogram.See
Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
forfurther
information.Subsequenttothefirstquarteroffiscal2027,theCompanyrepurchasedanadditional$14.9million in shares
under theprogramas ofSeptember24, 2026.
The Companyexpects to strategicallyandopportunisticallyrepurchaseshares fromtime to timethrough solicited or unsolicited
transactionsin theopenmarket,in privately negotiatedtransactionsor by othermeansin accordancewith securities laws. The
Companyexpectsthatsharerepurchasesundertheprogramwillbefundedfromexisting cashbalancesandfuturefree cash
flow.The sharerepurchaseprogram doesnot obligatethe Companyto repurchase anyspecific amountof shares,does nothave
anexpiration date,andmaybe suspended,modifiedor discontinuedatanytime withoutprior notice.
Dividends
Inaccordancewith our variabledividend policy,we willnot paya cashdividend toholders ofour CommonStock with respect
toour first quarterof fiscal2027. TheCompanywillnot paya dividendfor asubsequentprofitablequarteruntil the Company
is profitableonacumulativebasiscomputedfromthedateof thelast quarterin which a dividendwas paid.At the endof the
first quarteroffiscal2027,theamountofcumulativelosses to be recoveredbeforepaymentof adividend was$94.5million.
RefertoPart I, Item1. Notes to CondensedConsolidatedFinancials,
Note 1 - Summary of Significant Accounting Policies
, for
furtherinformationregarding our variabledividend policy.
MaterialCashRequirements
Materialcashrequirementsforoperatingactivitiesprimarilyconsistoffeedingredients, processing, packagingandwarehouse
costs,employeerelatedcosts,maintenancecapitalexpendituresandothergeneraloperatingexpenses.Ourmaterialcash
Index
requirementsforgrowth capitalexpendituresconsist primarily ofour constructionprojectsto increaseour productioncapacity
ofpreparedfoodsandcage-freeshell egg production.We believe ourcurrent cashbalances,investments,projectedcashflows
fromoperations,andavailableborrowings underourCredit Facilitywillbesufficienttofundourcashneedsforatleastthe
next 12 monthsand to fundour capitalcommitmentscurrently in place thereafter.Future acquisitionsof businessesmayrequire
additionalfinancing.
IMPACTOF RECENTLYISSUED ACCOUNTINGSTANDARDS
For informationon changes in accountingprinciplesand new accountingprinciples,see "
New AccountingPronouncements and
Policies"
in
Note 1 - Summary of Significant Accounting Policies
oftheNotestoCondensedConsolidatedFinancial
Statementsincluded in this QuarterlyReport.
CRITICALACCOUNTINGESTIMATES
Critical accountingestimatesarethoseestimatesmadein accordancewith U.S. generallyacceptedaccountingprinciples that
involveasignificantlevel ofestimationuncertaintyandhavehador arereasonablylikely tohaveamaterialimpacton our
financialconditionor resultsofoperations.Therehavebeennochangestoourcritical accountingestimatesidentifiedin our
2026AnnualReport.
Cal-Maine Foods Inc. published this content on September 30, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on September 30, 2026 at 10:14 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]