Despite excellent results, Cal-Maine Foods missed lofty estimates.
Sometimes record sales aren’t enough – at least that’s how Cal-Maine Foods (NASDAQ:CALM) investors saw it on Wednesday.
It was a wild trading day for Cal-Maine stock after the nation’s largest egg producer posted fiscal first quarter earnings on October 1.
In pre-market trading, the stock rose 2% from Tuesday’s close to around $96 per share. It then plummeted 12% to under $85 per share just before the market opened on Wednesday. After the open, it jumped back up to around $93 per share and by afternoon it settled at around $92 per share, down roughly 2% on the day.
Meanwhile, Cal-Maine posted record first quarter earnings. Here’s a breakdown.
- Net sales surged 17.4% to $923 million, but that missed estimates of $960 million.
- Net income jumped 32.9% to $199 million.
- Earnings rose 34.6% to $4.12 per share, but that missed estimates of $5.01 per share.
“We delivered our strongest first quarter in company history, aided by higher specialty egg sales, the expansion of our prepared foods platform, and supported by solid performance in conventional eggs,” Sherman Miller, president and CEO of Cal-Maine Foods, said.
Rising egg prices – and demand
Cal-Maine’s strong earnings were the result of rising demand for eggs and higher prices. Total shell egg sales rose 6.5% in the quarter on 2.5% higher sales volume and 3.9% higher prices. Shell egg sales accounted for approximately 85.6% of total net sales.
Conventional eggs, basically white eggs, had sales growth of 4.4% mainly due to 4.7% higher egg prices. Conventional egg sales volume was relatively flat.
Specialty eggs, which include brown eggs, free range, and organic eggs, saw sales surge 10.4%, primarily on the strength of a 7.5% increase in specialty egg sales volume and 2.6% higher specialty egg prices. Specialty eggs accounted for 35.9% of total shell egg sales — 130-basis point increase.
Average Retail Cost of Eggs Over Last 12 Months
| Month | Average retail price (USD per 12 eggs, large Grade A) |
|---|---|
| Sep 2024 | $3.82 |
| Oct 2024 | $3.37 |
| Nov 2024 | $3.65 |
| Dec 2024 | $4.15 |
| Jan 2025 | $4.95 |
| Feb 2025 | $5.90 |
| Mar 2025 | $6.23 |
| Apr 2025 | $5.12 |
| May 2025 | $4.55 |
| Jun 2025 | $3.78 |
| Jul 2025 | $3.60 |
| Aug 2025 | $3.59 |
So why was the stock price so volatile?
Cal-Maine Foods stock bounced around on Wednesday mainly because the firm missed lofty revenue and earnings estimates. But then when investors got a chance to see that the results were still, in fact, strong, despite the incredibly high estimates, they likely bought back in.
Cal-Maine executives didn’t provide an outlook, but the company is focused on diversifying its revenue by continuing to expand its specialty eggs sales as well as its prepared foods segment. The latter should benefit from the June acquisition of Echo Lake Foods, which makes prepared egg-based and pancake breakfast foods.
I’m proud to share that our acquisition of Echo Lake Foods is on track to exceed every financial and operational expectation set at the time of the transaction,” Miller said … “Specialty eggs and prepared foods are delivering today and are value drivers for the future.”
Cal-Maine stock is super cheap, trading at around 4 times earnings and has a median price target of $107.50 per share, suggesting 16% upside. The stock is down 11% YTD but looks to be in a solid position for growth.
