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Nov 30, 2019
Cal-Maine Foods Q2 2020 Earnings Report
Reported a net loss due to challenging market conditions and lower average selling prices.
Key Takeaways
Cal-Maine Foods reported a decrease in net sales and a net loss for the second quarter of fiscal year 2020, primarily due to challenging market conditions and lower average selling prices. While sales volumes remained relatively flat, the company experienced a decline in average selling prices and lost a portion of non-specialty egg sales to a major customer. However, the specialty egg business remains a key component of their growth strategy.
Net sales decreased by 12.5% compared to the second quarter of fiscal 2019.
The company reported a net loss of $10.1 million, or $0.21 per basic and diluted share.
Specialty eggs accounted for 36.0% of sales revenue, with sales of $109.4 million.
The company completed the acquisition of certain assets of Mahard Egg Farm.
Revenue by Segment
Forward Guidance
Cal-Maine Foods is focused on long-term management, growth strategy execution, and investments to support operations and serve customers, despite market price volatility and external factors.
Positive Outlook
- Positioning as an industry leader in meeting future customer requirements for cage-free eggs.
- Preparing for additional demand created by legislation in California, Washington and Oregon requiring cage-free eggs.
- Investing over $314 million to expand cage-free production.
- Making progress with expansion plans in Florida, Texas and Utah, which will provide significant additional processing, pullet and cage-free capacity upon completion.
- Continuing to pursue strategy to grow business through selective acquisitions as well as focused expansion and conversion of existing farms.
Challenges Ahead
- Ongoing uncertainties and geopolitical issues surrounding trade agreements and international tariffs could create more price volatility for the second half of the year.
- Experienced challenging market conditions for the second quarter of fiscal 2020.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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