Cal-Maine Foods(CALM) - 2026 Q1 - Quarterly Results

Executive Summary & Highlights Cal-Maine Foods achieved its strongest first quarter in fiscal 2026, driven by significant financial growth and strategic expansion in specialty eggs and prepared foods Financial and Operating Highlights Cal-Maine Foods reported its strongest first quarter in company history for fiscal 2026, driven by significant growth in net sales, gross profit, operating income, and net income. Specialty eggs and prepared foods were key growth drivers, with the Echo Lake acquisition contributing substantially to prepared foods sales | Metric | Q1 FY2026 (Millions) | Change YoY | Q1 FY2025 (Millions) | | :-------------------------------- | :------------------- | :--------- | :------------------- | | Net Sales | $922.6 | +17.4% | $785.9 | | Shell Egg Sales | $789.4 | +6.5% | - | | Conventional Egg Sales | $505.9 | +4.4% | - | | Specialty Egg Sales | $283.5 | +10.4% | - | | Prepared Foods Sales | $83.9 | +839.1% | $8.9 | | Gross Profit | $311.3 | +25.9% | $247.2 | | Gross Profit Margin | 33.7% | - | - | | Operating Income | $249.2 | +33.3% | $187.0 | | Operating Income Margin | 27.0% | - | - | | Net Income | $199.3 | +32.9% | $149.6 | | Diluted EPS | $4.12 | +34.6% | $3.06 | | Net Cash Flow from Operations | $278.6 | +137.2% | - | - Specialty eggs and prepared foods combined accounted for 39.8% of net sales, up from 33.8% YoY[5] - Echo Lake acquisition contributed $70.5 million in sales[5] - Breeder flocks grew 46%, total chicks hatched rose 77%, and average layer hens expanded 10%, reflecting prior investments[5] - Declared a cash dividend of approximately $66.5 million, or $1.37 per share[5] CEO Commentary CEO Sherman Miller highlighted the strongest first quarter in company history, attributing success to higher specialty egg sales, expansion of the prepared foods platform, and solid conventional egg performance. He emphasized Cal-Maine Foods' position as a unique combination of value and growth, driven by strategic priorities - Cal-Maine Foods delivered its strongest first quarter in company history, supported by higher specialty egg sales, prepared foods expansion, and solid conventional egg performance[4] - The company is positioned as a uniquely attractive combination of both value and growth in the food sector[4] Quarterly Results Overview This section details Cal-Maine Foods' Q1 FY2026 financial performance, highlighting significant increases in net sales and gross profit, primarily driven by specialty eggs and prepared foods Net Sales and Revenue Breakdown Net sales increased by 17.4% to $922.6 million, with total shell egg sales up 6.5% due to higher volume and selling prices. Specialty eggs drove a greater portion of shell egg sales, reflecting an ongoing mix shift, while prepared foods sales saw an extraordinary increase primarily due to the Echo Lake Foods acquisition | Category | Q1 FY2026 Sales (Millions) | YoY Change | Volume Change | Price Change | | :------------------- | :------------------------- | :--------- | :------------ | :----------- | | Net Sales | $922.6 | +17.4% | - | - | | Total Shell Egg Sales | $789.4 | +6.5% | +2.5% | +3.9% | | Conventional Egg Sales | $505.9 | +4.4% | Flat | +4.7% | | Specialty Egg Sales | $283.5 | +10.4% | +7.5% | +2.6% | | Prepared Foods Sales | $83.9 | +839.1% | - | - | - Shell egg sales represented 85.6% of total net sales, indicating diversification towards prepared foods[6] - Specialty eggs accounted for 35.9% of total shell egg sales, a 130-basis point increase, reflecting an ongoing mix shift[6][7] - The acquisition of Echo Lake Foods contributed $70.5 million to net sales[6] Profitability Analysis Gross profit increased by 25.9% to $311.3 million, primarily driven by higher shell egg selling prices, growth in specialty egg sales volume, lower feed costs, and contributions from the Echo Lake Foods acquisition | Metric | Q1 FY2026 (Millions) | Q1 FY2025 (Millions) | YoY Change | | :----------- | :------------------- | :------------------- | :--------- | | Gross Profit | $311.3 | $247.2 | +25.9% | - Key drivers for gross profit increase include 3.9% higher shell egg selling prices, 7.5% growth in specialty egg sales volume, 4.3% lower feed costs, and contributions from the Echo Lake Foods acquisition[8] Strategic Priorities Powering Growth Cal-Maine Foods is actively expanding specialty egg and prepared food platforms, pursuing disciplined M&A, and leveraging operational excellence to drive sustained growth Expanding Specialty Eggs and Prepared Foods Cal-Maine Foods is actively expanding its specialty egg and prepared foods platforms, which together accounted for nearly 40% of net sales. Specialty eggs showed broad-based growth across channels, and the company maintains a strong portfolio of national and regional brands, including Eggland's Best® as the 1 branded specialty egg - Specialty eggs represented 30.7% of net sales, and prepared foods contributed 9.1% of sales in Q1 FY2026, totaling nearly 40% of net sales[11] - Specialty egg sales delivered double-digit dollar and volume increases in cage-free and pasture-raised categories, with strong growth across retail, foodservice, and private-label programs[12] - Cal-Maine Foods' brand portfolio includes Eggland's Best®, Land O'Lakes®, Farmhouse Eggs®, 4-Grain®, Sunups®, Sunny Meadow®, MeadowCreek Foods®, and Crepini®, with Eggland's Best® maintaining its 1 branded specialty egg position[13][25] Pursuing Disciplined, Accretive M&A The company leverages its strong balance sheet and cash flow for disciplined M&A, targeting acquisitions like Echo Lake Foods and Crepini Foods that enhance mix, improve margin, and build capabilities. The Echo Lake acquisition is exceeding expectations, leading to an incremental $14.8 million investment in a new high-speed pancake production line - Cal-Maine's M&A strategy focuses on strengthening financial returns and advancing its consumer-driven growth by targeting assets that enhance mix, improve margin profile, and build capabilities[14][15] - The acquisition of Echo Lake Foods is on track to exceed financial and operational expectations[16] - An incremental $14.8 million is being invested in a new high-speed pancake production line at the Burlington, Wisconsin facility, adding 12 million pounds of annual pancake capacity[16] Leveraging Operational and Financial Excellence Cal-Maine Foods maintains a vertically integrated model focused on quality, safety, supply reliability, and efficiency. Ongoing modernization initiatives and the 'Cal-Maine Way' drive operational execution, supported by a robust balance sheet that provides capital allocation flexibility - The company's vertically integrated model ensures quality, safety, supply reliability, and efficiency, reinforced by in-line facilities and modernization initiatives[17] - The 'Cal-Maine Way' combines best practices, process innovation, and talent development to drive consistent operational execution[17] - A robust balance sheet provides strategic advantage and full flexibility for dynamic capital allocation[17] Supply and Demand Dynamics U.S. egg consumption is robust, driven by health and convenience trends, while the national table-egg flock recovers from HPAI, necessitating significant biosecurity investments - U.S. egg consumption is driven by growing demand for protein, increased focus on health and wellness, affordability, and population expansion[18] - Specialty eggs and prepared food categories are capturing greater market share due to consumer preference for enhanced attributes and convenience[18] - The national table-egg flock is recovering from Highly Pathogenic Avian Influenza (HPAI) but remains below historical levels, emphasizing the importance of biosecurity[19] - Cal-Maine has invested over $80 million since 2015 in advanced technology, equipment, and procedures to safeguard flock health and mitigate HPAI risks[19] Looking Forward Cal-Maine Foods anticipates a compelling long-term growth trajectory, underpinned by its scale, vertical integration, diversification, and strategic focus on specialty eggs and prepared foods - The company foresees a clear and compelling long-term growth trajectory by continuing to execute its strategic priorities