Cal-Maine Foods reports record Q3 revenueCal-Maine Foods reports record Q3 revenue
Net sales increased 33% over the same quarter last year.
March 31, 2022
In addition to announcing a $82 million investment in cage-free production, Cal-Maine Foods Inc. this week reported results for the third quarter of fiscal 2022 and 39-week period ended February 26, 2022.
Net sales in the third quarter of fiscal 2022 increased 33% to $477.5 million compared to $359.1 million in the third quarter of fiscal 2021. The company reported net income of $39.5 million, or $0.81 per basic and diluted common share, for the third quarter of fiscal 2022, compared to net income of $13.5 million, or $0.28 per basic and diluted common share, for the third quarter of fiscal 2021.
For the thirty-nine weeks ended February 26, 2022, net sales were $1.18 billion compared to $999.2 million in the prior-year period. The company reported net income of $22.7 million, or $0.46 per basic and diluted common share, for the thirty-nine weeks ended February 26, 2022, compared with net income of $6.3 million, or $0.13 per basic and diluted common share, for the prior-year period.
“We are pleased to report a strong performance for the third quarter of fiscal 2022. Net sales of $477.5 million represented a third-quarter revenue record, driven by improved shell egg pricing,” said Dolph Baker, chairman and chief executive officer of Cal-Maine Foods. “The net average selling price for all eggs increased 29.4% to $1.612 per dozen compared with $1.246 per dozen in the prior-year period.”
Baker said Cal-Maine Foods also delivered growth in shell egg volumes with total dozens sold in the third increasing 2.8% versus the prior-year quarter. This, he said, was led by an approximate 1.4% improvement within the retail sales channel that outpaced the industry, which experienced shell egg volume declines of 6.4%.
“Our fiscal third quarter gross margin of 19.2% improved approximately 600 basis points compared to the prior-year quarter. This increase reflects overall improved market conditions, strong growth in our specialty egg sales, our continued focus on expense management and our ability to leverage our owned production capabilities.”
The company reported that industry retail demand for shell eggs decreased slightly as compared to the strong demand of the “stay-at-home” COVID-19 period but added that with improving demand for food service breaking stock, overall demand is returning to a more consistent, historical pattern.
Specialty egg sales totaled $182.9 million in the third quarter of fiscal 2022, comprising 39.4% of total shell egg revenue, compared with $145.2 million, or 41.5% of revenue, for the prior-year quarter.
“Consumer preference for specialty eggs, including cage-free eggs, continues to expand with more consumers willing to pay premium prices for these products,” Baker noted, adding that cage-free egg sales comprised 24.1% of total net shell egg sales in the third quarter of fiscal 2022 and 23% of total net shell egg sales fiscal year-to-date. We continue to focus on offering a favorable product mix that meets the needs of our customers, including conventional, cage-free, organic and other specialty eggs and egg products.”
The company said farm production costs per dozen for the third quarter of fiscal 2022 increased 16.9% compared to the third quarter of fiscal 2021, primarily tied to higher feed costs per dozen produced, which increased 20.3% compared with the prior-year period.
“Supplies of corn and soybean remained tight relative to demand in our fiscal third quarter as evidenced by the near-record-low stock-to-use ratio for corn, as well as weather-related shortfalls in production and yields, and the ongoing disruptions related to the COVID-19 global pandemic,” Baker said. “Going forward: market indications point to corn and soybean pricing pressures and higher volatility tied to the Russia-Ukraine war and export demand, which will result in continued pressure on the stock-to-use ratio for corn.”
Despite input cost pressures and other market uncertainties, he said the company remains focused on managing operations as efficiently and safely as possible.
“We have continued to deliver against our key performance metrics, and we commend the work of our managers and employees across our operations for consistent execution in challenging conditions. Our commitment to be the most reliable and sustainable producer of fresh shell eggs and egg products remains unwavering. Cal-Maine Foods’ differentiated product mix and proven operating model continue to support our ability to meet changing customer demand and extend our market reach. Importantly, we have the financial strength to support our organic growth and expansion opportunities and consider potential acquisitions that are accretive to our business.”
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