Cal-Maine Foods, Inc. , the United States’ largest producer and distributor of fresh shell eggs, has released its financial results for the second quarter of fiscal 2025, ending November 30, 2024. The company reported impressive growth in its financial and operational metrics, driven by robust demand for shell eggs, favorable market conditions, and strategic investments.
Sherman Miller, the President and CEO of Cal-Maine Foods, highlighted the company’s strong performance despite ongoing challenges in the shell egg market. According to Miller, the quarter benefited from increased seasonal demand leading up to the Thanksgiving holiday, as well as sales from recent acquisitions. The results also reflect higher market prices, which have continued to rise in fiscal 2025 due to supply constraints caused by recent outbreaks of highly pathogenic avian influenza (HPAI).
In addition, Cal-Maine Foods leveraged its scale and benefited from its recent acquisitions, which have enhanced its production capacity in a challenging supply environment. With ongoing demand outpacing supply, the company is focused on strategic investments to expand its operations and meet customer needs.
Financial Performance: The company reported a substantial increase in net sales, reaching $954.7 million in the second quarter of fiscal 2025, compared to $523.2 million for the same period last year. This 82.7% year-over-year growth was primarily driven by an increase in both the net average selling price of shell eggs and the number of dozens sold.
Cal-Maine Foods sold a total of 329.8 million dozen shell eggs during the quarter, a 14.5% increase from the 288.2 million dozen sold in the same period of fiscal 2024. Sales of conventional eggs reached 209.6 million dozen, up 8.9% from 192.5 million dozen in the previous year. In addition, the company saw a remarkable 25% growth in specialty egg volumes, with sales of specialty eggs totaling 120.2 million dozen, compared to 95.7 million dozen sold in the prior-year period.
Cal-Maine Foods Announces Outstanding Second Quarter Fiscal 2025 Results
Net income for the quarter surged to $219.1 million, or $4.47 per diluted share, compared to just $17.0 million, or $0.35 per diluted share, for the same period last year. This dramatic increase in profitability reflects both higher sales and improved operational efficiency.
Operational Highlights and Strategic Investments: Miller emphasized that Cal-Maine Foods’ success in the second quarter of fiscal 2025 was not only due to strong demand but also the company’s ongoing investment in capacity expansion. The company has committed approximately $60 million to new capital projects aimed at expanding its cage-free capacity. This includes $40 million in investments announced in October, which will fund the construction of five new cage-free layer houses and two pullet houses across various locations, including Florida, Georgia, Utah, and Texas. These projects are expected to increase production capacity by 1.1 million cage-free hens and 250,000 pullets by late summer 2025.
Additionally, the company is investing $15 million to expand its egg products processing facility in Blackshear, Georgia, which will add extended shelf-life liquid egg products to its offerings. Cal-Maine Foods also expects its newly acquired processing plant and hatchery in Dexter, Missouri, to be operational in the next fiscal quarter, contributing to its shell egg production capacity. Furthermore, the company has secured commitments for approximately 1.2 million additional free-range hens by fall 2025.
In line with its growth strategy, Cal-Maine Foods has continued to pursue acquisitions and joint ventures that align with its long-term objectives. These acquisitions have not only complemented the company’s organic growth but have also provided new market opportunities. Notably, Cal-Maine Foods has expanded its egg products portfolio through its strategic investment in Crepini, which adds egg wraps, protein pancakes, crepes, and wrap-ups to its product lineup.
Miller also mentioned that the company’s growth strategy focuses on geographic expansion, operating synergies, and proximity to customers. With a strong balance sheet and financial flexibility, Cal-Maine Foods is well-positioned to continue making strategic investments to support its growth trajectory.
Cost Management and Efficiency: Max Bowman, Cal-Maine Foods’ Vice President and Chief Financial Officer, provided insight into the company’s cost management strategies. For the second quarter of fiscal 2025, the company’s farm production costs per dozen were 8.5% lower compared to the same period last year, largely due to more favorable pricing for key feed ingredients. Specifically, feed costs per dozen were down 12.8% compared to the previous year, which helped to offset some of the pressures from rising egg prices.
However, the company faced higher costs for outside egg purchases, which increased significantly from the prior year. This rise in costs was due to higher shell egg prices and the increased number of eggs purchased during the seasonal demand surge, as the country faced lower egg supply due to the impact of HPAI outbreaks.
Bowman noted that, while feed prices are expected to remain favorable for the remainder of fiscal 2025, the company remains cautious due to external uncertainties, such as weather patterns and potential global supply chain disruptions. These factors could lead to price volatility in the months ahead.
Cash Dividend and Shareholder Returns: As part of its commitment to returning value to shareholders, Cal-Maine Foods declared a cash dividend of approximately $73.0 million, or $1.49 per share. This dividend reflects the company’s established policy and is a testament to its strong financial performance and commitment to rewarding shareholders.
Outlook and Future Strategy: Looking forward, Cal-Maine Foods remains optimistic about its growth prospects. The company expects continued strong demand for shell eggs, supported by the expansion of cage-free production and investments in new processing facilities. The completion of ongoing capital projects and the integration of recent acquisitions are expected to further bolster the company’s production capacity and market position.
Cal-Maine Foods will also continue to focus on expanding its egg products offerings, including ready-to-eat items like hard-cooked eggs and egg-based wraps. These product expansions align with the company’s strategy to diversify its portfolio and tap into emerging market trends, such as the growing demand for convenient and protein-rich snacks.
In conclusion, Cal-Maine Foods has demonstrated impressive financial and operational performance in the second quarter of fiscal 2025. The company’s strong sales growth, profitability, and strategic investments position it for continued success as it navigates challenges in the egg production industry. With a clear focus on expanding capacity, enhancing its product offerings, and pursuing targeted acquisitions, Cal-Maine Foods is well-positioned to meet the evolving needs of its customers and deliver long-term value to its shareholders.
