Cal-Maine Foods Reports Results for Fourth Quarter and Fiscal 2024

Rhea-AI Summary

Cal-Maine Foods (NASDAQ: CALM) reported solid Q4 fiscal 2024 results amid challenging industry conditions. Key highlights include:

- Q4 net sales: $640.8 million
- Q4 net income: $113.2 million ($2.32 per diluted share)
- Fiscal year 2024 net sales: $2.3 billion
- Fiscal year 2024 net income: $277.9 million ($5.69 per diluted share)
- Cash dividend: $0.77 per share

The company faced HPAI outbreaks but continued to meet customer demands. Cal-Maine completed two asset acquisitions in fiscal 2024 and one after the fiscal year-end, enhancing market reach. Q4 farm production costs per dozen decreased 14.3% year-over-year, primarily due to lower feed costs. The company remains focused on expanding production capacity for specialty and cage-free eggs to meet consumer demand trends.

Positive

• Q4 net income increased to $113.2 million from $110.9 million year-over-year
• Q4 farm production costs per dozen decreased 14.3% compared to the prior-year period
• Specialty egg volumes increased 2.5% in Q4 compared to the same period last year
• Completed two strategic asset acquisitions in fiscal 2024, enhancing market reach
• Feed costs per dozen decreased 24.9% in Q4 and 18.6% for the full fiscal year

Negative

• Q4 net sales decreased to $640.8 million from $688.7 million year-over-year
• Fiscal year 2024 net sales decreased to $2.3 billion from $3.1 billion in fiscal 2023
• Fiscal year 2024 net income decreased to $277.9 million from $758.0 million in fiscal 2023
• Experienced HPAI outbreaks resulting in depopulation of approximately 3.1 million laying hens and 577,000 pullets
• Conventional egg sales volume declined 7.0% in Q4 compared to the same period last year

Insights

Financial Analyst

Cal-Maine Foods, Inc. reported a mixed set of results for both the fourth quarter and the fiscal year 2024. While net sales and income were impressive, they showed a decline compared to the previous fiscal year. Specifically, the company's net sales for fiscal 2024 were $2.3 billion, down from $3.1 billion in fiscal 2023. Similarly, the net income dropped significantly from $758.0 million to $277.9 million. This decline in sales revenue is largely attributed to lower average selling prices for both conventional and specialty eggs, exacerbated by the shorter fiscal year (52 weeks compared to 53 weeks in the previous year).

One of the noteworthy aspects is the company's ability to lower its farm production costs per dozen by 14.3 in the fourth quarter compared to the prior year, largely due to favorable commodity pricing for feed ingredients. This improvement in cost structure is a silver lining that may help mitigate some of the negative impacts of lower sales volumes and prices.

The acquisitions mentioned, such as the assets of Fassio Egg Farms and certain properties from Tyson Foods, indicate a strong focus on growth and expansion. These moves are expected to enhance market reach and diversify product offerings, which could be beneficial over the long term.

Market Research Analyst

From a market perspective, Cal-Maine Foods' performance reflects broader industry trends, such as the volatility in egg prices and the impact of the Highly Pathogenic Avian Influenza (HPAI). The company's ability to navigate these challenges while still maintaining a strong market presence is commendable. The decrease in net sales and income aligns with the anticipated correction in egg prices following record highs in fiscal 2023. However, the company's strategic acquisitions and investments in repurposing facilities indicate a proactive approach to future-proofing its operations.

Additionally, the increase in specialty egg volumes by 2.5 for the fourth quarter shows a shifting consumer preference towards these products, which typically command higher margins. This trend is expected to continue, providing a buffer against the fluctuations in conventional egg prices.

The anticipated continued strong demand for shell eggs as affordable protein underscores the company's resilience and potential for steady performance in fiscal 2025. The company's commitment to expanding production capacity for specialty and cage-free eggs aligns well with current consumer demand trends, further solidifying its market position.

Medical Research Analyst

The ongoing challenges posed by the Highly Pathogenic Avian Influenza (HPAI) have significant implications for Cal-Maine Foods and the broader poultry industry. With approximately 32.8 million commercial laying hens and pullets affected nationwide, the impact on supply and pricing cannot be understated. However, Cal-Maine Foods' robust biosecurity measures and quick repopulation efforts at affected facilities, as approved by the USDA, demonstrate their resilience and operational readiness. This proactive management is important in mitigating long-term disruptions.

Furthermore, the company's assurance that HPAI does not pose a risk to human health through safely handled and cooked eggs helps maintain consumer confidence. This is particularly important as any public scare related to food safety can significantly impact sales and market perception. The company's transparent communication on this matter is a positive aspect that helps build trust and maintain market stability.

RIDGELAND, Miss.--(BUSINESS WIRE)-- Cal-Maine Foods, Inc. (NASDAQ: CALM) (“Cal-Maine Foods” or the “Company”), the largest producer and distributor of fresh shell eggs in the United States, today reported results for the fourth quarter of fiscal 2024 (thirteen weeks) and fiscal year 2024 (fifty-two weeks) ended June 1, 2024.

Fourth Quarter and Fiscal Year 2024 Highlights

• Quarterly net sales of $640.8 million
• Quarterly net income of $113.2 million, or $2.32 per diluted share
• Fiscal year net sales of $2.3 billion and net income of $277.9 million, or $5.69 per diluted share
• Cash dividend of $37.8 million, or $0.77 per share, pursuant to the Company’s established dividend policy

Overview

Sherman Miller, president and chief executive officer of Cal-Maine Foods, stated, “We are pleased to report a solid performance for the fourth quarter amidst a challenging period for Cal-Maine Foods and our industry. We are extremely proud of our managers and employees who continued to manage our operations in a dynamic environment affected by recent outbreaks of highly pathogenic avian influenza (“HPAI”). Despite the interruptions, we continued to meet the demands of our valued customers.

“Throughout the year, we continued to execute our growth strategy and deliver a favorable product mix in line with customer demand. Our operations ran well as we remained focused on our objective of operational excellence. We also completed two asset acquisitions in fiscal 2024 and completed one subsequent to the end of the fiscal year, each of which complements our organic growth initiatives. We are excited about the additions of the assets of Fassio Egg Farms, Inc., located in Erda, Utah, and the former broiler processing plant, hatchery and feed mill in Dexter, Missouri, previously operated by Tyson Foods. We have commenced work on the acquired Dexter facilities to repurpose the assets for use in shell egg production and processing. We are partnering with local farmers, working with local contractors and businesses and making significant investments in the Dexter area to renovate and improve the facilities, with future plans for expanded shell egg and value-added egg product opportunities. Following the end of the fiscal year, we acquired substantially all the assets of ISE America, Inc. and certain of its affiliates (“ISE”). We expect that the acquisition of these assets from ISE will enable us to significantly enhance our market reach in the Northeast and Mid-Atlantic states.”

Sales Performance & Operating Highlights

Max Bowman, vice president and chief financial officer of Cal-Maine Foods, added, “For the fourth quarter of fiscal 2024, our net sales were $640.8 million compared with $688.7 million for the same period last year. The decline in sales revenue for the fourth quarter of fiscal 2024 was primarily due to lower sales volumes due directly to having 13 weeks in the fourth quarter of fiscal 2024 compared to 14 weeks in the prior-year period.

“Net sales for fiscal 2024 were $2.3 billion compared with $3.1 billion for fiscal 2023. Fiscal 2024 was a 52-week-period and fiscal 2023 was a 53-week-period. The decrease in sales revenue was primarily due to a decrease in the net average selling prices for conventional eggs, and to a lesser extent, the decrease in the net average selling prices for specialty eggs, compared to fiscal 2023, which saw record-high prices primarily due to egg supply constraints resulting from HPAI.

“For the fourth fiscal quarter, we sold 285.6 million dozens shell eggs compared with 296.6 million dozens for the fourth quarter of fiscal 2023. Sales of conventional eggs totaled 180.5 million dozens, compared with 194.0 million dozens for the prior-year period, a decline of 7.0%, reflecting 13 weeks in the fourth quarter of fiscal 2024 compared to 14 weeks in the prior-year period. However, specialty egg volumes were 2.5% higher with 105.0 million dozens sold for the fourth quarter of fiscal 2024 compared with 102.5 million dozens sold for the fourth quarter of fiscal 2023.

“Net income attributable to Cal-Maine Foods for the fourth quarter of fiscal 2024 was $113.2 million, or $2.32 per diluted share, compared with $110.9 million, or $2.27 per diluted share, for the fourth quarter of fiscal 2023. For fiscal 2024, net income attributable to Cal-Maine Foods was $277.9 million, or $5.69 per diluted share, compared with $758.0 million, or $15.52 per diluted share, for fiscal 2023.

“Overall, our fourth quarter farm production costs per dozen were 14.3% lower compared to the prior-year period, primarily due to more favorable commodity pricing for key feed ingredients. For fiscal 2024, farm production costs per dozen were down 8.3%, primarily tied to lower feed costs. For the fourth quarter of fiscal 2024, feed costs per dozen were down 24.9% compared with the fourth quarter of fiscal 2023, and feed costs per dozen for fiscal 2024 were 18.6% lower compared with fiscal 2023.

“Current indications for corn supply project an overall better stocks-to-use ratio, implying more favorable prices in the near term. However, as we continue to face uncertain external forces including weather patterns and global supply chain disruptions, price volatility could remain,” said Bowman.

	13 Weeks Ended June 1, 2024				14 Weeks Ended June 3, 2023				52 Weeks Ended June 1, 2024				53 Weeks Ended June 3, 2023
Dozen Eggs Sold (000)		285,555				296,554				1,147,633				1,147,373
Conventional Dozen Eggs Sold (000)		180,513				194,031				746,687				749,076
Specialty Dozen Eggs Sold (000)		105,042				102,523				400,946				398,297
Dozen Eggs Produced (000)		243,851				276,354				1,018,835				1,058,540
% Specialty Sales (dozen)		36.8	%			34.6	%			34.9	%			34.7	%
% Specialty Sales (dollars)		38.5	%			39.1	%			41.4	%			31.6	%
Net Average Selling Price (per dozen)	$	2.133			$	2.197			$	1.932			$	2.622
Net Average Selling Price of Conventional Eggs (per dozen)	$	2.062			$	2.038			$	1.730			$	2.739
Net Average Selling Price of Specialty Eggs (per dozen)	$	2.254			$	2.499			$	2.309			$	2.403
Feed Cost (per dozen)	$	0.504			$	0.671			$	0.550			$	0.676

HPAI & Table Egg Supply Outlook

Outbreaks of HPAI have continued to occur in U.S. poultry flocks. From the resurgence beginning in November 2023 until the last reported case in commercial layer hens in July 2024, approximately 32.8 million commercial laying hens and pullets have been depopulated.

During the third and fourth quarters of fiscal 2024, Cal-Maine Foods experienced HPAI outbreaks within Company facilities located in Kansas and Texas, resulting in total depopulation of approximately 3.1 million laying hens and 577,000 pullets. Both locations have been cleared by the USDA to resume operations, and repopulation is expected to be completed before calendar year end.

The Company remains dedicated to robust biosecurity programs across its locations; however, no farm is immune from HPAI. HPAI is currently widespread in the wild bird population worldwide. The extent of possible future outbreaks, with heightened risk during the migration seasons, and more recent HPAI events, which have been directly linked to dairy cattle operations, cannot be predicted. According to the U.S. Centers for Disease Control and Prevention, the human health risk to the U.S. public from the HPAI virus is considered to be low. Also, according to the USDA, HPAI cannot be transmitted through safely handled and properly cooked eggs. There is no known risk related to HPAI associated with eggs that are currently in the market and no eggs have been recalled.

Looking Ahead

Miller added, “We are proud of our performance in fiscal 2024, as we continued to execute our growth strategy in a challenging environment as well as respond to new market opportunities. Across Cal-Maine Foods, our dedicated managers and employees have remained steadfast in their commitment to manage our operations efficiently and meet the needs of our customers. We have a proven operating model that has served us well throughout the business cycles and external forces that affect our industry, including HPAI. We remain diligent in our efforts to mitigate future risks and minimize potential disruption to our overall production and distribution.

“Looking ahead to fiscal 2025, we believe demand for shell eggs will remain strong as consumers continue to look for more affordable protein options. As the largest producer and distributor of fresh shell eggs, we play an important role in meeting this demand and supporting the nation’s food supply with a differentiated product mix. We will continue to focus on expanding our production capacity for additional specialty and cage-free eggs that meet current consumer demand trends. Importantly, we have the financial strength to fund our internal expansion projects and to consider acquisitions that complement our operations and support our growth initiatives. Above all, we are committed to our mission to be the most reliable and sustainable producer of fresh shell eggs and egg products. We look forward to the opportunities ahead for Cal-Maine Foods in fiscal 2025.”

Dividend Payment

For the fourth quarter of fiscal 2024, Cal-Maine Foods will pay a cash dividend of approximately $0.77 per share to holders of its common and Class A common stock. Pursuant to Cal-Maine Foods’ variable dividend policy, for each quarter in which the Company reports net income, the Company pays a cash dividend to shareholders in an amount equal to one-third of such quarterly income. Following a quarter for which the Company does not report net income, the Company will not pay a dividend with respect to that quarter or for a subsequent profitable quarter until the Company is profitable on a cumulative basis computed from the date of the most recent quarter for which a dividend was paid. The amount paid per share will vary based on the number of outstanding shares on the record date. The dividend is payable on August 20, 2024, to holders of record on August 5, 2024.

About Cal-Maine Foods

Cal-Maine Foods, Inc. is primarily engaged in the production, grading, packaging, marketing and distribution of fresh shell eggs, including conventional, cage-free, organic, brown, free-range, pasture-raised and nutritionally enhanced eggs. The Company, which is headquartered in Ridgeland, Mississippi, is the largest producer and distributor of fresh shell eggs in the United States and sells most of its shell eggs throughout the majority of the United States.

Forward Looking Statements

Statements contained in this press release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on management’s current intent, belief, expectations, estimates and projections regarding our company and our industry. These statements are not guarantees of future performance and involve risks, uncertainties, assumptions and other factors that are difficult to predict and may be beyond our control. The factors that could cause actual results to differ materially from those projected in the forward-looking statements include, among others, (i) the risk factors set forth in the Company’s SEC filings (including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K), (ii) the risks and hazards inherent in the shell egg business (including disease, pests, weather conditions and potential for recall), including but not limited to the current outbreak of highly pathogenic avian influenza affecting poultry in the U.S., Canada and other countries that was first detected in commercial flocks in the U.S. in February 2022 and that first impacted our flocks in December 2023, (iii) changes in the demand for and market prices of shell eggs and feed costs, (iv) our ability to predict and meet demand for cage-free and other specialty eggs, (v) risks, changes or obligations that could result from our recent or future acquisitions of new flocks or businesses and risks or changes that may cause conditions to completing a pending acquisition not to be met, (vi) risks relating to changes in inflation and interest rates, (vii) our ability to retain existing customers, acquire new customers and grow our product mix, (viii) adverse results in pending litigation matters, and (ix) global instability, including as a result of the war in Ukraine, the Israel-Hamas conflict and attacks on shipping in the Red Sea. SEC filings may be obtained from the SEC or the Company’s website, www.calmainefoods.com. Readers are cautioned not to place undue reliance on forward-looking statements because, while we believe the assumptions on which the forward-looking statements are based are reasonable, there can be no assurance that these forward-looking statements will prove to be accurate. Further, the forward-looking statements included herein are only made as of the respective dates thereof, or if no date is stated, as of the date hereof. Except as otherwise required by law, we disclaim any intent or obligation to publicly update these forward-looking statements, whether as a result of new information, future events or otherwise.

CAL-MAINE FOODS, INC. AND SUBSIDIARIES FINANCIAL HIGHLIGHTS (Unaudited) (In thousands, except per share amounts)   SUMMARY STATEMENTS OF INCOME
		13 Weeks Ended June 1, 2024			14 Weeks Ended June 3, 2023			52 Weeks Ended June 1, 2024			53 Weeks Ended June 3, 2023
Net sales		$	640,789		$	688,680		$	2,326,443		$	3,146,217
Cost of sales			454,353			490,588			1,784,872			1,949,760
Gross profit			186,436			198,092			541,571			1,196,457
Selling, general and administrative			57,781			62,159			252,625			232,207
Insurance recoveries			(13,603)			(125)			(23,532)			(3,345)
(Gain) loss on disposal of fixed assets			70			(167)			26			(131)
Operating income			142,188			136,225			312,452			967,726
Other income, net			9,773			9,690			47,519			30,824
Income before income taxes			151,961			145,915			359,971			998,550
Income tax expense			39,031			35,380			83,689			241,818
Net income			112,930			110,535			276,282			756,732
Less: Loss attributable to noncontrolling interest			(311)			(396)			(1,606)			(1,292)
Net income attributable to Cal-Maine Foods, Inc.		$	113,241		$	110,931		$	277,888		$	758,024
Net income per common share:
Basic		$	2.32		$	2.28		$	5.70		$	15.58
Diluted		$	2.32		$	2.27		$	5.69		$	15.52
Weighted average shares outstanding:
Basic			48,761			48,689			48,717			48,648
Diluted			48,902			48,838			48,873			48,834

CAL-MAINE FOODS, INC. AND SUBSIDIARIES FINANCIAL HIGHLIGHTS (Unaudited) (In thousands)   SUMMARY BALANCE SHEETS
		June 1, 2024			June 3, 2023
ASSETS
Cash and short-term investments		$	812,377		$	647,914
Receivables, net			162,442			187,213
Inventories, net			261,782			284,418
Prepaid expenses and other current assets			5,238			5,380
Current assets			1,241,839			1,124,925
Property, plant and equipment, net			857,234			744,540
Other noncurrent assets			85,688			85,060
Total assets		$	2,184,761		$	1,954,525
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses		$	189,983		$	145,601
Dividends payable			37,760			37,130
Current liabilities			227,743			182,731
Deferred income taxes and other liabilities			159,975			162,211
Stockholders' equity			1,797,043			1,609,583
Total liabilities and stockholders' equity		$	2,184,761		$	1,954,525

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240723615663/en/

Sherman Miller, President and CEO

Max P. Bowman, Vice President and CFO

(601) 948-6813

Source: Cal-Maine Foods, Inc.

FAQ

What were Cal-Maine Foods' Q4 fiscal 2024 earnings?

Cal-Maine Foods reported Q4 fiscal 2024 net income of $113.2 million, or $2.32 per diluted share.

How did CALM's fiscal 2024 performance compare to fiscal 2023?

Cal-Maine Foods' fiscal 2024 net sales were $2.3 billion compared to $3.1 billion in fiscal 2023, while net income decreased to $277.9 million from $758.0 million in fiscal 2023.

What dividend did Cal-Maine Foods (CALM) declare for Q4 fiscal 2024?

Cal-Maine Foods declared a cash dividend of approximately $0.77 per share for Q4 fiscal 2024, payable on August 20, 2024.

How did HPAI impact Cal-Maine Foods in fiscal 2024?

Cal-Maine Foods experienced HPAI outbreaks in Kansas and Texas facilities, resulting in depopulation of approximately 3.1 million laying hens and 577,000 pullets.

What was Cal-Maine Foods' (CALM) specialty egg sales performance in Q4 fiscal 2024?

Cal-Maine Foods reported a 2.5% increase in specialty egg volumes, with 105.0 million dozens sold in Q4 fiscal 2024 compared to 102.5 million dozens in Q4 fiscal 2023.