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Aug 29, 2020
Cal-Maine Foods Q1 2021 Earnings Report
Reported a net loss due to challenging market conditions amidst the COVID-19 pandemic, but saw increased retail demand and higher specialty egg sales.
Key Takeaways
Cal-Maine Foods reported a net loss of $19.4 million for the first quarter of fiscal 2021, despite a 21.4% increase in net sales to $292.8 million. The results reflect continued challenging market conditions due to the COVID-19 pandemic, with volatile egg prices and decreased food service demand impacting profitability. However, retail demand remained strong, and specialty egg sales increased.
Net sales increased by 21.4% to $292.8 million compared to the first quarter of fiscal 2020.
The company reported a net loss of $19.4 million, or $0.40 per basic and diluted share.
Total dozens sold were up 3.8% due to strong retail demand, offsetting lower food service demand.
Specialty egg sales totaled $129.2 million, representing 45.2% of egg sales revenue.
Cal-Maine Foods
Cal-Maine Foods
Forward Guidance
The company remains focused on managing operations efficiently and sustainably, while continuing to pursue its growth strategy and expand its specialty egg business.
Positive Outlook
- Overall demand is expected to improve as food service sales return to pre-COVID-19 levels.
- Current supplies of corn and soybeans are favorable, and the company believes it will continue to have an adequate supply of both grains in fiscal 2021.
- The company is working with customers to ensure a smooth transition in meeting their goals for cage-free egg supply.
- Cal-Maine Foods has donated over 900,000 dozen eggs in the first quarter of 2021 to provide food assistance.
- The company will continue to pursue its growth strategy and the further expansion of our specialty egg business.
Challenges Ahead
- Market prices for eggs remained volatile over the first quarter and decreased overall compared to prices at the end of fiscal 2020.
- Demand from food service customers is still well below pre-quarantine levels, which is believed to have constrained the price of shell eggs in the retail market.
- Current ongoing uncertainties and supply chain disruptions related to the COVID-19 outbreak may lead to further price volatility.
- Weather fluctuations may lead to further price volatility.
- Geopolitical issues surrounding trade agreements and international tariffs may lead to further price volatility.