Carl-Main Foods shifts to premium egg business to buffer against falling egg prices

Topic: Focusing on U.S. stock 2025 Q4 earnings reports

The egg producer said its third-quarter sales fell 53% to $667 million.

Eggs on a conveyor belt at Sunrise Farms in Petaluma, California.

Cal-Maine Foods’ latest quarterly featured egg sales accounted for just over half of total egg sales, up from about a quarter in the same period last year.

Content Summary

Impacted by falling egg prices, Cal-Maine Foods’ profit and sales plunged significantly, but the company’s strategy to transition to premium eggs cushioned the impact and pushed the stock price up 6.1%.

Cal-Maine Foods has recently been transitioning to premium eggs and the ready-to-eat foods business. This move helped the company withstand the impact caused by the decline in egg prices. A sharp drop in egg prices led to a dramatic shrinkage in the company’s profit and sales in its most recent quarter.

However, the scale of the performance decline did not reach Wall Street expectations. This pushed the company’s stock price up 6.1% on Wednesday to $83.89. Although the stock has fallen more than 8% over the past 52 weeks, it has risen by about 7% year to date.

Recently, the egg producer has continued adjusting its sales mix—reducing the share of conventional eggs and increasing the share of specialty eggs such as free-range and pasture-raised products—products that have both higher profit margins and pricing.

In the latest quarter, the share of specialty egg sales in Cal-Maine’s total egg sales just edged above half, significantly higher than about one quarter in the same period last year. This transition effectively cushioned the impact of falling commodity egg prices.

In the three months ended February 28, Cal-Maine’s sales fell 53% year over year to $667 million. Analysts surveyed by FactSet, a financial data platform, had previously expected $642.5 million. The decline in results was mainly due to a sharp year-over-year drop in egg prices: last year, egg prices had once reached historical highs due to a supply shortage triggered by an avian influenza outbreak.

Cal-Maine CEO Sherman・Miller said on the analysts’ conference call, “Industry disruptions have not been eliminated. They remain a real challenge, but they are no longer driving the same level of supply crisis or panic buying.”

This directly led to a steep drop in egg prices. Cal-Maine said that in the latest quarter, the average selling price of conventional eggs fell 70% year over year, while the price of premium eggs fell 17% year over year.

In addition to focusing on the premium egg business, as consumer demand for convenient ready-to-eat foods continues to rise, Cal-Maine has also been stepping up its ready-to-eat foods business through acquisitions and investments.

In the latest quarter, the company’s ready-to-eat foods sales jumped to $63.6 million, more than five times year over year, but fell 11% quarter over quarter. CFO Maxx・Bauman said the company is investing tens of millions of dollars in this business for platform upgrades, increasing capacity, and optimizing efficiency.

Bauman said that although the related projects will increase equipment downtime in the short term, affect shipment volumes, and squeeze profit margins, they are expected to deliver substantial returns in the long run.

He said, “As capacity gradually recovers, we expect performance to improve step by step starting in the fourth quarter. Over the next 18 to 24 months, ready-to-eat foods capacity is expected to increase by more than 30%.”

Cal-Maine’s third fiscal quarter profit was $50.50 million, compared with $508.5 million in the same period last year. Earnings per share for the quarter were $1.06, above analysts’ expected $0.70.

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Responsible Editor: Guo Mingyu