Cal-Maine Brings Home The Bacon (& Eggs)

Remember those crazy egg prices? Well, Cal-Maine Foods are getting a nice reminder today, as the U.S.’s largest egg producer topped third-quarter estimates. 🥚

The company reported its sixth straight quarter of accelerating earnings growth. Its earnings soared 717% YoY to $6.62 per share, and sales grew 109% to $997.5 million. Analysts had expected $5.47 in earnings per share on revenues of $888 million. 🐣

Driving the strong results was an increase in average selling prices and strong customer demand. The average selling price for conventional eggs during the quarter was $3.678 per dozen, up 152% YoY. Specialty egg prices rose 36% YoY to $2.616 per dozen, with higher prices for conventional eggs pushing consumer demand to this segment. 

As for the future, retail egg prices are expected to remain high due to the ongoing impacts of the bird flu outbreak. The company says costs and supply chain disruptions have occurred but that there have been no positive tests for avian flu at any of its production facilities. 🐤

Should that continue to be the case, the company will benefit from the elevated egg prices. However, investors should note that the impact of these record-high prices will eventually come home to roost. Either supply will increase and come back in line with demand. Or the high prices will impact demand and bring it back closer to supply. Or both, to some extent, as the market finds a new equilibrium. ⚖️

For now, though, investors are taking a sunny-side-up view. $CALM shares were up nearly 7% on the day. 📈

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