Before the opening bell on March 29, Cal-Maine Foods Inc. (CALM, Financial), the U.S.'s largest egg producer, released earnings results for the third quarter of fiscal 2021. The company beat earnings projections, while revenue fell short of expectations.
Key highlights
Cal-Maine reported diluted earnings per share of 28 cents, which remained flat compared to the prior-year quarter. Revenue of $359.1 million was up 3.9% on a year-over-year basis. Analysts had predicted earnings of 7 cents per share on $368.66 million in revenue.
Reflecting on the latest quarter, Chairman and CEO Dolph Baker said:
"We are pleased with our results for the third quarter of fiscal 2021, which reflect strong retail demand for shell eggs as consumers have continued to purchase more eggs for preparing meals at home. While we saw modest improvement in the food service and hospitality business as COVID-19-related restrictions have gradually lifted in select parts of the country, this market segment has not returned to pre-pandemic demand levels."
During the quarter, the company sold 279.7 million dozen eggs, which was more than in the prior-year quarter. Additionally, the net average selling price was up from a year ago at $1.246 per dozen. Baker summarized the key points of the results:
"For the third quarter of fiscal 2021, sales of specialty eggs totaled $145.2 million, accounting for 41.5 percent of our egg sales revenue, compared with $125.0 million, or 37.2 percent of egg sales revenue, in the third quarter of fiscal 2020. The higher specialty egg revenue reflects a 16.2 percent increase in specialty dozens sold in the third quarter of fiscal 2021 compared to the same period last year."
Looking ahead
Baker said Cal-Maine would continue to implement its "growth strategy" in fiscal 2021 in spite of challenges posed by the Covid-19 pandemic. The growth strategy comprises of providing a favorable product mix, investing in operations and discovering acquisitions and other growth opportunities that would augment its production:
"We have a strong balance sheet with ample liquidity and access to capital to continue to make the necessary investments in our operations, and we remain focused on having sufficient capacity to meet the needs of our customers with the same exceptional service that is a hallmark of Cal-Maine Foods," he said.
Due to the supply chain disruptions as well as the uncertainties associated with the recent restructuring of U.S. trade agreements with several countries, price volatility is expected throughout the fiscal year. The company did not issue any guidance figures for earnings or revenue.
Disclosure: I do not hold any positions in the stocks mentioned.
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