Cal-Maine Meals (NASDAQ:CALM) shares slid in premarket buying and selling on Thursday as its fiscal Q2 earnings missed expectations.
The Mississippi-based firm that counts itself as the most important producer and distributor of recent shell eggs in the USA posted $4.07 in earnings per share on $801.7M in gross sales, each of which have been cited as information. Nevertheless, even the file ranges mirrored some disappointment in opposition to Wall Avenue estimates of $4.26 and $797.1M, respectively. The corporate additionally highlighted the truth that egg costs have greater than doubled from 2021 ranges. Typical egg internet common promoting value per dozen jumped to $2.883 from $1.151 a yr in the past, whereas specialty eggs rose 24.9% to $2.37 per dozen from $1.898 per dozen within the prior yr quarter.
“These outcomes mirror the present market setting characterised by file common promoting costs for typical eggs, primarily as a consequence of diminished provide associated to the outbreak within the U.S. of extremely pathogenic avian influenza and good buyer demand,” CEO Sherman Miller defined. “There have been no optimistic exams for HPAI at any of Cal-Maine Meals’ owned or contracted manufacturing services as of December 28, 2022. Shopper demand for shell eggs continued to be good within the quarter, particularly main as much as the Thanksgiving vacation, and we skilled file quarterly quantity ranges for specialty eggs bought.”
Nevertheless, he additionally famous that feed prices have elevated considerably, weighing on margins whilst egg costs explode. Given the shortage of HPAI circumstances detected to shut December, there’s additionally concern that egg costs will quickly normalize as extra provide comes accessible, including stress on the underside line.
That stated, the corporate was cautious on projecting a return to regular egg provide.
“Previous to the outbreak of HPAI in February 2022, the layer hen flock five-year common from 2017 via 2021 was comprised of roughly 328 million hens,” the corporate’s earnings launch defined. “In accordance with a LEAP Market Analytics report dated December 8, 2022, the layer hen stock will not be projected to exceed the 328 million mark once more till December of 2023.”
Shares of Cal-Maine Meals (CALM) fell 4.39% in premarket motion on Thursday.
Dig into the details of the earnings results.