Cal-Maine Foods, Inc. Q1 FY2026 earnings call

• Vertical integration provides benefits like low costs, supply reliability, quality safeguards. • Cal-Maine Way focuses on operational excellence, including biosecurity investments over $80 million since 2015. • Strong team with depth and experience; welcomed Melanie Boulden to Board and Keira Lombardo as Chief Strategy Officer. • First quarter was strongest in history, driven by growth in specialty eggs and prepared foods platform. • Vertical integration and financial strength enable execution; capital allocation focuses on dividends, share repurchases, earnings per share growth, M&A, and multiple expansion. • Echo Lake Foods acquisition is performing well, with approval of $14.8 million investment in a new pancake production line.

Net sales were $922.6 million. Shell egg sales were $789.4 million, up 6.5%, representing 85.6% of total net sales. Specialty eggs generated $283.5 million in sales, up 10%, accounting for over 30% of net sales. Conventional egg sales were $505.9 million, up 4%. Prepared foods delivered $83.9 million in sales, an increase of over 800%, representing more than 9% of net sales. Gross profit was $311.3 million or 33.7% of net sales, up from $247.2 million or 31.5% last year. Operating income was $249.2 million or 27% of net sales compared with $187 million or 23.8% a year ago. Net income was $199.3 million or $4.12 per diluted share, up from $150 million or $3.06 per diluted share last year.

• Dividend of $1.37 per share payable November 13. • Opportunistic approach to share repurchases. • Disciplined reinvestment in business for earnings per share growth. • Focus on related M&A for geographic expansion and supply position. • Belief that shift to higher-value categories will lead to multiple expansion.

• High-path avian influenza remains a reality, impacting industry globally. • Supply chain challenges due to HPAI, affecting flock numbers and turkey flocks. • Seasonality and market volatility can impact pricing and supply stability.

Q: On current market pricing drop, thoughts?

A: Sherman ties to seasonality and supply stabilization importance; Max mentions imports helping liquid side and tailwinds for future.

Q: On diverting production to prepared foods, strategy?

A: Sherman states vertical integration is key for efficiencies, ensuring supply for Echo Lake, and long-term plan to develop prepared foods business