Cal-Maine Foods (NASDAQ: CALM), a leading U.S. egg producer and distributor, reported a fiscal fourth-quarter loss as an oversupplied market drove egg prices to historically low levels.
The company posted a quarterly net loss of $35.9 million, compared with net income of $342.5 million a year earlier. Diluted loss per share was $0.76, significantly below the FactSet consensus estimate of earnings of $0.08 per share.
Quarterly revenue declined 50% year over year to $552.6 million, missing Wall Street’s expectation of $563.8 million.
Chief Executive Officer Sherman Miller described the quarter as extremely challenging. He said excess supply pushed inflation-adjusted egg prices to historic lows, with the average selling price of conventional eggs falling by more than 70% per dozen during the cycle.
Miller emphasized that the downturn was primarily caused by oversupply rather than weaker consumer demand, adding that the long-term demand fundamentals for eggs remain favorable. He said the difficult market further highlighted the importance of diversifying the company’s product and sales mix.
Sales of conventional eggs declined 71% due to sharply lower prices. Sales of specialty eggs, including cage-free and pasture-raised products, fell 17% as both pricing and volume came under pressure.
Cal-Maine said it continues to expand its prepared foods business by adding capacity and improving utilization rates, reducing its reliance on fluctuations in conventional egg prices.
Looking ahead, Miller said early signs indicate that the market’s supply-demand balance is improving. Egg prices could begin to recover in the fall, which is traditionally a season of stronger demand.