Just How Strong Are Cal-Maine Foods Inc. (CALM) Financial Foundations?


Cal-Maine Foods Inc. (NASDAQ: CALM), one of the major producers of fresh chicken eggs in the United States, reported the fourth-quarter fiscal year 2022 results on Tuesday, July 19. Given the previous quarter’s double-digit sales growth, investors expected a repetition of the outstanding performance, and the business outperformed expectations greatly.

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CALM shares have been trending in the opposite direction of the major indices in recent months. In comparison, the company’s shares have increased in value by more than 40% since the beginning of the year, while the S& P 500 has declined by more than 18%.

Cal-Maine Foods Inc. (CALM) reported $593 million in fourth-quarter revenue, up almost 70% year on year. Earnings of $110 million, or $2.25 per share, were achieved. In comparison, the firm lost $0.09 per share in the same period last year.

According to management, sales growth was aided by a shortage of fresh eggs in the United States due to an outbreak of avian flu on some farms. As a result, the average selling price of fresh eggs increased. The fourth-quarter results were much better than what Wall Street had projected. CALM was predicted to earn roughly $1.84 per share and generate no more than $1.84 billion in revenue.

Prices for fresh eggs declined marginally last year, but have increased again this year due to the aforementioned factors, as well as high gasoline, feed, and labor expenses. In summary, Cal-Maine Foods Inc. (CALM) faces a straightforward comparison to the previous year. Of course, supply chain issues hurt the firm, but it has demonstrated the ability to manage its expenses appropriately thus far.

Another factor is an increase in demand for specialty eggs, such as those from free-range laying hens and so-called organic eggs. In the most recent quarter, regular egg sales declined by 4.8 percent year on year, while specialty egg sales increased by 16.7 percent. Cal-Maine Foods Inc. (CALM) benefits from the increased demand for specialty eggs since such products are more profitable than conventional eggs.

Cal-Maine Foods Inc. (CALM) management was upbeat about the previous quarter and the full fiscal year 2022, noting that the company had enough finances to invest in expansions. Furthermore, the business declared a quarterly dividend of $0.75 per share.


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