Cal-Maine Foods CFO says decline in Q2 revenue due to lower egg selling prices

CFO Max Bowman states: “”For the second quarter of fiscal 2024, our net sales were $523.2 million compared with $801.7 million for the same period last year. The decline in sales revenue for the second quarter of fiscal 2024 was primarily due to the significant decrease in the net average selling price for conventional eggs. However, our sales volumes improved slightly with 288.2 million total dozens sold in the second quarter of fiscal 2024 compared with 284.1 million, an increase of 1.4%, over the same period last year. Net income attributable to Cal-Maine Foods, Inc. for the second quarter of fiscal 2024 was $17.0 million, or $0.35 per diluted share, compared with $198.6 million, or $4.07 per diluted share, for the second quarter of fiscal 2023. These results include a $19.6 million loss contingency accrual, reflected in SG&A expenses, for our estimated share of damages and fees awarded in a pending anti-trust legal proceeding. We are still pursuing legal actions to reverse, and if necessary, appeal the decisions. While conventional egg prices improved sequentially, the net average selling price per dozen was $1.458 for conventional eggs in the second quarter of fiscal 2024, down 49.4% compared with $2.883 for the prior-year quarter. Net average selling price for specialty eggs was $2.277 per dozen, compared with $2.370 per dozen for the second quarter of fiscal 2023, a decline of 3.9%. Specialty dozens sold were 33.2% of total dozens sold in the second quarter of fiscal 2024 compared with 33.8% in the prior-year period. Cage-free eggs accounted for approximately 30.4% of shell egg revenue for the second quarter of fiscal 2024. We reported operating income of $14.2 million for the second quarter of fiscal 2024, compared with operating income of $259.9 million for the prior-year quarter, primarily reflecting lower market prices. However, we benefitted from lower feed ingredient prices compared with the same period a year ago. We continued to focus on the aspects of our business we can control and managed our operations efficiently despite higher input costs at our production, processing and distribution centers, as well as ongoing investments in enhanced biosecurity measures to mitigate the risk of highly pathogenic avian influenza”.