CALM - Cal-Maine egg volumes beat slumping prices to help beat estimates

2023-07-25 16:23:42 ET

Falling egg prices did nothing to hurt Cal-Maine Foods ( NASDAQ: CALM ) results for the fourth quarter. Shares traded higher after the close as the egg maker beat estimates on its quarterly earnings report.

Revenue of $688M compared to the average analyst estimate of $612M, while EPS of $2.28 per basic share and $2.27 per diluted common share compared to the average analyst estimate of $2.12. The company announced a dividend of $0.76 a share.

Egg prices have fallen from an all-time average high of $4.823 in January to $2.219 in June. Prices were down 7.9% in June when compared to a year ago and were 7.3% lower from May. Cal-Maine ( CALM ) is in general has been one of the biggest beneficiaries of higher egg prices.

Strong consumer demand supported higher sales for the fourth quarter, which included the busy Easter holiday season, according to Sherman Miller, president and chief executive officer of Cal-Maine Foods.

“Our operations continued to run well in the fourth quarter despite a challenging environment with inflationary pressures affecting our feed and other production costs," Miller said in a statement.

For the fourth quarter of fiscal, net sales were $688.7 million compared with $593.0 million for the same period last year.

"Our top line growth was driven by higher average selling price for specialty eggs as well as increased sales volumes of both conventional and specialty eggs, due in part to having 14 weeks in the fourth quarter of fiscal 2023 compared with 13 weeks in the prior-year period," Max Bowman, vice president and chief financial officer of Cal-Maine Foods, said.

"We remained focused on disciplined cost management as we continued to incur higher costs across various inputs including feed, labor, packaging, and distribution. Overall, fourth quarter farm production costs per dozen increased 9.9% compared with the prior-year quarter."

In June, Seeking Alpha analyst SM Investor said that CALM is considered a profitable long-term investment opportunity, despite risks associated with market volatility and rising feed costs.

The stock has one Strong Buy rating from Wall Street analysts, one Hold and two Sells. It has three Buy ratings from Seeking Alpha analysts and one Hold.

Shares of CALM are down nearly 19% for 2023.

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