Cal-Maine Foods, the United States' largest producer of shell eggs, reported its latest quarter financial results on Monday, showing a major jump in sales amid consumers staying at home during the COVID-19 pandemic.
The Jackson, MS-based company reported sales of $453.3 million for its 2020 fourth quarter ended May 30, up 61.6 percent year-over-year. Cal-Maine recorded a profit of $60.5 million for the period, compared to a $19.8 million net loss a year earlier. Q4 operating profit of $76.1 million dwarfed the $30.4 million it had a year earlier.
"After three fiscal quarters characterized by an oversupply of eggs and depressed market prices, demand for eggs increased and market prices rose 62.4 percent during our fourth fiscal quarter over the average price for the first three quarters, as consumers purchased more eggs for preparing meals at home in response to the COVID-19 pandemic," said Dolph Baker, Cal-Maine chairman and CEO. "This demand trend also coincided with higher seasonal demand during the peak Easter season."
Baker said Q4 sales volumes were up 10.9 percent year-over-year, while average price for conventional eggs in the Southeast doubled from $0.86 in Q4 2019 to $1.71 this past quarter, with a high of $3.18 and a low of $1.02.
“The supply of eggs has continued to trend downward through the fourth quarter of fiscal 2020," Baker added. "Hen numbers reported by the USDA as of June 1, 2020, were 319.8 million, which represents 13.9 million less hens than reported a year ago, when the USDA also reported high flock productivity.
Cal-Maine noted that the USDA reported that the hatch from January through May 2020 decreased 5.0 percent, including a 13.1 percent drop in May year-over-year, which will likely further reduce future egg supply.
In its Q4, Cal-Maine's sales of specialty eggs — which include cage-free eggs — totaled $133.3 million, representing 29.9 of its total egg sales revenue, compared with $119.9 million and 44.1 percent of egg sales revenue a year earlier. The company said the increase was due to a 10.4 percent increase in specialty dozens, as well as a slight increase in specialty egg prices.
"Specialty eggs are an important part of our growth strategy, and we strive to provide a favorable product mix in line with consumer demand," Baker said. "We have continued to position Cal-Maine Foods to meet the expected additional demand for cage-free eggs.