Cal-Maine Foods posts strong quarter after working around avian flu issues

Cal-Maine Foods (NASDAQ:CALM) gained slightly on Tuesday after the Mississippi-based company topped revenue estimates with its FQ1 earnings report. The quarter was impacted by the recent outbreaks of highly pathogenic avian influenza that impacted the national egg supply and led to higher prices.

Revenue jumped 71% year-over-year to $785.9 million. The higher sales were primarily driven by an increase in the net average selling price of shell eggs, as well as an increase in total dozens sold. Cal-Maine sold 310.0 million dozen shell eggs during the quarter, compared with 273.1 million dozens a year ago. Specialty sales accounted for 35.5% of the total sales, vs. 33.5% a year ago. Cal-Maine (CALM) noted that the company worked hard to increase production and purchase more eggs from outside suppliers in the low-supply environment. "Our higher volumes and sales were supported by the additional production capacity from recent acquisitions as well as consistent organic growth," highlighted CEO Sherman Miller.

The net average selling price for conventional eggs was $2.42 per dozen vs. $1.24 a year ago. The net average selling price for specialty eggs was $2.34 vs. $2.28 a year ago. Feed costs per dozen were lower than a year ago.

Operating income for the quarter was reported at $187.0 million, vs. -$6.8 million a year ago. EPS came in at $3.06 vs. $2.68 consensus and $0.02 a year ago.

Looking ahead, Cal-Maine Foods (CALM) said it continues to expand its capacity, including cage-free and other specialty egg production, through investments in innovative, scale-driven products and facilities.

HPAI update: 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 33.1 million commercial laying hens and pullets have been depopulated. Cal-Maine Foods (CALM) said it experienced HPAI outbreaks within company facilities located in Kansas and Texas in FQ3-FQ4, 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. Repopulation began during FQ1 of 2025 and is expected to be completed before calendar year-end. Looking back further, highly pathogenic avian influenza, also known as bird flu, has affected over 100 million in 48 states since January 2022, data from the Centers for Disease Control and Prevention (CDC) shows. Regarding the issue, food sector expert Phil Lempert noted that how chicken are housed in small spaces creates problems. "When one chicken gets bird flu, they’ve got to cull the entire flock. That's the problem," he warned.

Shares of Cal-Maine Foods (CALM) edged up 1.39% in post-market trading to $77.50. The stock is up more than 25% over the last three months.