Cal-Maine's stock falls as avian flu outbreak weighs on earnings in latest quarter

By Ciara Linnane

Egg producer said it was hit by outbreaks at facilities in Kansas and Texas

Cal-Maine Foods Inc.'s stock fell 2% in after-hours trading Tuesday, after the nation's biggest egg producer posted weaker-than-expected fourth-quarter earnings as an avian flu outbreak continues to take a toll.

Ridgeland, Miss.-based Cal-Maine (CALM) had net income of $113.2 million, or $2.32 a share, for the quarter to June 1, up from $110.9 million, or $2.27 a share, in the year-earlier period.

Sales fell to $640.8 million from $688.7 million a year ago.

The FactSet consensus was for earnings per share of $2.41 and sales of $652 million.

Chief Executive Sherman Miller said the market remains "challenging" as avian flu continues to infect flocks. The latest outbreak of the deadly illness has led to the culling of about 32.8 million commercial laying hens and pullets.

Cal-Maine saw infections at facilities located in Kansas and Texas, resulting in total depopulation of about 3.1 million laying hens and 577,000 pullets.

"Both locations have been cleared by the USDA to resume operations, and repopulation is expected to be completed before calendar year end," the company said.

Sales were also hurt by lower sales volumes, which was partly due to there being 13 weeks in the quarter, compared with 14 weeks in the prior-year period. But sales were also dinged by lower prices for conventional eggs and to a lesser extent for specialty eggs, according to Max Bowman, the company's finance chief.

The company sold 285.6 million dozens of shell eggs in the period, down from 296.6 million a year ago.

"Looking ahead to fiscal 2025, we believe demand for shell eggs will remain strong as consumers continue to look for more affordable protein options," Miller said in prepared remarks.

The stock has gained 13% in the year to date, while the S&P 500 has gained 16%.

-Ciara Linnane

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07-23-24 1633ET

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