RIDGELAND, MISS. — Cal-Maine Meals achieved report highs in web earnings and web gross sales within the second quarter ended Nov. 28 as no optimistic checks for extremely pathogenic avian influenza (HPAI) have been discovered at manufacturing services.
Web earnings of $198.6 million, equal to $4.08 per share on the frequent inventory, in contrast with $1.17 million, or 2¢ per share, within the earlier yr’s second quarter. Web gross sales of $801.7 million have been up 110% from $381.7 million.
“These outcomes replicate the present market surroundings characterised by report common promoting costs for standard eggs, primarily attributable to decreased provide associated to the outbreak within the US of extremely pathogenic avian influenza (HPAI), and good buyer demand,” stated Sherman Miller, chief govt officer, when outcomes have been introduced Dec. 28. “There have been no optimistic checks for HPAI at any of Cal-Maine Meals’ owned or contracted manufacturing services as of Dec. 28, 2022. Client demand for shell eggs continued to be good within the quarter, particularly main as much as the Thanksgiving vacation, and we skilled report quarterly quantity ranges for specialty eggs offered.”
Regardless of the outcomes, Cal-Maine Meals’ inventory on the Nasdaq was buying and selling at $54.51 per share late within the morning on Dec. 29, down 12% from an in depth of $62.19 on Dec 28 and down 15% from an in depth of $63.78 on Dec. 27. Media stories stated second-quarter outcomes got here in under Wall Road forecasts.
HPAI continued to impression the business negatively within the quarter. The overall variety of birds, together with chickens and turkeys, culled in the US stood at 52.5 million by the tip of November, which was above the estimated 50 million birds in 2015, in accordance with the US Division of Agriculture’s Animal and Plant Well being Inspection Service.
Dozens of eggs offered at Cal-Maine Meals within the second quarter elevated 5.4% to 284.1 million from 269.6 million. Whereas standard egg volumes offered decreased 2.2% compared with the earlier yr’s second quarter, specialty egg volumes elevated 24%. Cage-free mandates that went into impact on Jan. 1, 2022, in California and Massachusetts additional supported demand.
“Typical egg web common promoting value per dozen elevated to $2.883 in contrast with $1.151 a yr in the past, and each standard and specialty egg income reached report ranges for the second quarter of fiscal 2023,” stated Max Bowman, chief monetary officer for Cal-Maine Meals. “Web common promoting value for specialty eggs rose 24.9% to $2.370 per dozen, in contrast with $1.898 per dozen for the second quarter of 2022. We noticed our highest ever quarterly gross sales of specialty eggs of $227.8 million, or 29.4% of whole shell egg income. Specialty dozens offered have been 33.8% of whole dozens offered in contrast with 28.7% within the prior-year interval.”
Cal-Maine Meals handled greater prices throughout inputs comparable to feed, labor, packaging and distribution within the quarter. Farm product prices per dozen eggs rose 22% in comparison with the earlier yr’s second quarter, primarily as a result of feed prices elevated 30%.
Cal-Maine Meals expects the HPAI outbreak will proceed to impression the availability of eggs negatively. The length of the impression will rely partially by how lengthy it takes to replenish the layer hen flock in the US. The five-year common for the layer hen flock from 2017-21 was about 328 million hens. A LEAP Market Analytics report issued on Dec. 8, 2022, initiatives the layer hen stock to not exceed 382 million hens till December 2023.
Over the primary two quarters of the fiscal yr, Cal-Maine Meals had web earnings of $323.9 million, or $6.66 per share on the frequent inventory, which in contrast with a lack of $16.9 million in the identical time of the earlier yr. Web gross sales over the primary two quarters rose 106% to $1.46 billion from $706.7 million.