Breaking Down Cal-Maine Foods, Inc. (CALM) Financial Health: Key Insights for Investors

Are you keeping a close eye on your investments and looking for a detailed analysis of a key player in the food industry? Have you ever wondered about the financial stability and future prospects of egg producer, especially with the fluctuations in the market? For the fiscal year 2024, the company's performance shows a mix of challenges and successes, with net sales reaching $2.3 billion and a net income of $277.9 million, or $5.69 per diluted share. But how do these figures stack up against previous years, and what are the underlying factors driving these results? Let's delve into the financial health of the company, exploring key insights that can inform your investment decisions.

Cal-Maine Foods, Inc. (CALM) Revenue Analysis

Cal-Maine Foods, Inc. is primarily focused on the production, grading, packing, and sale of fresh shell eggs. This constitutes the vast majority of their revenue.

To gain insights into Cal-Maine Foods' financial performance, we can look at their recent financial data. Cal-Maine Foods reported net sales of approximately $3.06 billion for fiscal year 2024, a decrease compared to net sales of $3.08 billion in fiscal year 2023.

Here’s a breakdown of factors influencing revenue:

• Shell Egg Sales: The primary driver of revenue is the sale of shell eggs, including specialty eggs (cage-free, organic, and nutritionally enhanced).
• Commercial Customers: Sales to major retailers, foodservice distributors, and egg product manufacturers.
• Geographic Reach: Distribution across the United States, with a significant presence in the Sun Belt, Southeast, Midwest, and Southwest regions.

Year-over-year revenue trends show fluctuations influenced by market conditions. Here’s a summary:

• The company's net average selling price per dozen eggs decreased 1.4% in fiscal year 2024.
• Specialty egg sales accounted for approximately 33.2% of total shell egg revenue in fiscal year 2024.

The following table summarizes Cal-Maine Foods' sales data for fiscal year 2024:

For further insights into investor behavior and stock performance, see: Exploring Cal-Maine Foods, Inc. (CALM) Investor Profile: Who’s Buying and Why?

Analyzing these factors provides a comprehensive view of how Cal-Maine Foods generates revenue and adapts to market dynamics.

Cal-Maine Foods, Inc. (CALM) Profitability Metrics

Assessing the profitability of Cal-Maine Foods, Inc. (CALM) involves scrutinizing its gross profit, operating profit, and net profit margins, alongside evaluating trends and comparing these metrics against industry benchmarks. Additionally, analyzing operational efficiency, such as cost management and gross margin trends, offers valuable insights. For a deeper dive into investor profiles, check out: Exploring Cal-Maine Foods, Inc. (CALM) Investor Profile: Who’s Buying and Why?

For the fiscal year 2024, Cal-Maine Foods reported a gross profit of $696.2 million. This represents the revenue remaining after deducting the cost of goods sold, indicating the company's efficiency in managing production costs. The gross profit margin for 2024 was 19.4%.

Operating profit, which factors in operating expenses, was $360.4 million for fiscal year 2024. This provides a clearer picture of profitability from core business operations. The operating margin for the same period stood at 10.1%.

Net profit, the bottom line, was $215.6 million for the fiscal year 2024. This figure accounts for all revenues and expenses, including interest and taxes. The net profit margin was 6.0%.

Analyzing the trends in profitability over time provides crucial insights. Here's a snapshot of Cal-Maine Foods' profitability metrics over the past few years:

Profitability Trends Over Time

A comparison against industry averages helps contextualize these figures. While specific industry averages can fluctuate, comparing Cal-Maine’s margins to those of its peers offers a benchmark for performance evaluation. For example, in profitable years, Cal-Maine's gross profit margin has significantly exceeded the industry average.

Operational efficiency is evident in Cal-Maine Foods' ability to manage costs and maintain healthy gross margins. Factors influencing this include:

• Feed costs: Managing feed costs, which constitute a significant portion of production expenses, is crucial.
• Production volume: Optimizing production volume to meet demand efficiently.
• Overhead expenses: Controlling overhead expenses to maximize profitability.

In conclusion, a detailed analysis of Cal-Maine Foods' profitability metrics, trends, and operational efficiency provides investors with a comprehensive understanding of the company’s financial health and performance.

Cal-Maine Foods, Inc. (CALM) Debt vs. Equity Structure

Understanding how Cal-Maine Foods, Inc. (CALM) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, debt-to-equity ratio, and its strategies for balancing debt and equity funding. Let's delve into these key aspects:

As of February 23, 2024, Cal-Maine Foods, Inc. (CALM) exhibited the following debt structure:

• Total current liabilities: $239.22 million
• Total liabilities: $718.29 million

These figures provide a snapshot of the company's obligations, encompassing both short-term and long-term debts.

The debt-to-equity ratio is a significant metric that indicates the proportion of debt and equity a company uses to finance its assets. As of February 23, 2024, Cal-Maine Foods, Inc. (CALM) had a debt-to-equity ratio of 0.47. This ratio is calculated by dividing total liabilities by total equity.

A debt-to-equity ratio of 0.47 suggests that Cal-Maine Foods, Inc. (CALM) uses $0.47 of debt for every $1 of equity. This indicates a moderate reliance on debt financing relative to equity.

Here is a table summarizing Cal-Maine Foods, Inc. (CALM)'s capital structure details as of February 23, 2024:

Cal-Maine Foods, Inc. (CALM) must strategically balance debt and equity to maintain financial stability and support growth initiatives. While debt financing can provide capital for expansion and acquisitions, excessive debt can increase financial risk. Equity funding, on the other hand, reduces financial leverage but may dilute ownership.

For further insights into Cal-Maine Foods, Inc. (CALM) and its investors, explore this resource: Exploring Cal-Maine Foods, Inc. (CALM) Investor Profile: Who’s Buying and Why?

Cal-Maine Foods, Inc. (CALM) Liquidity and Solvency

Understanding Cal-Maine Foods, Inc.'s financial health requires a close look at its liquidity and solvency. Liquidity refers to the company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations.

Assessing Cal-Maine Foods, Inc.'s Liquidity:

Analyzing the current and quick ratios provides insights into the company's liquidity position. These ratios measure the company's ability to cover its short-term liabilities with its short-term assets.

• Current Ratio: A current ratio of greater than 1 indicates that a company possesses more assets than liabilities. As of February 29, 2024, Cal-Maine Foods, Inc. reported a current ratio of 2.74.
• Quick Ratio: The quick ratio excludes inventories from current assets to provide a more conservative measure of liquidity. As of February 29, 2024, Cal-Maine Foods, Inc. reported a quick ratio of 1.96.

Working capital trends offer additional insights into liquidity management. Effective management of working capital ensures that the company has sufficient resources to fund its operations.

Cash Flow Statements Overview:

An overview of cash flow statements is crucial for understanding the trends in operating, investing, and financing activities. These statements reveal how the company generates and uses cash.

• Operating Cash Flow: This indicates the cash a company generates from its normal business operations. For the nine months ended February 29, 2024, Cal-Maine Foods, Inc. reported net cash provided by operating activities of $449.1 million, compared to $239.5 million for the prior year period.
• Investing Cash Flow: This section reflects cash spent on investments such as property, plant, and equipment (PP&E). For the nine months ended February 29, 2024, Cal-Maine Foods, Inc. used $149.6 million in investing activities, primarily for the purchase of PP&E.
• Financing Cash Flow: This includes activities related to debt, equity, and dividends. For the nine months ended February 29, 2024, Cal-Maine Foods, Inc. used $77.8 million in financing activities, mainly for dividend payments.

Potential Liquidity Concerns or Strengths:

Cal-Maine Foods, Inc. shows a strong liquidity position, with both current and quick ratios well above 1. The increase in net cash provided by operating activities from $239.5 million to $449.1 million year-over-year further supports this assessment. Prudent management of investing and financing activities also contributes to the company's financial stability.

Here is a summary of Cal-Maine Foods, Inc.'s key liquidity metrics:

For more insights into Cal-Maine Foods, Inc., check out: Exploring Cal-Maine Foods, Inc. (CALM) Investor Profile: Who’s Buying and Why?

Cal-Maine Foods, Inc. (CALM) Valuation Analysis

When evaluating whether Cal-Maine Foods, Inc. (CALM) is overvalued or undervalued, several key financial ratios and indicators come into play. These include the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, as well as stock price trends, dividend yield, payout ratios, and analyst consensus.

P/E Ratio: As of April 17, 2025, Cal-Maine Foods's P/E ratio is 4.5, based on an EPS of $20.31 and a stock price of $91.49 per share. This is significantly below the 10-year historical average of 70.15, indicating the stock might be undervalued compared to its historical performance. The current P/E ratio is 94% below its 10-year historical average. The mean historical P/E ratio over the last ten years is 70.15. The highest P/E ratio over the past ten years was 872.75 in May 2021, and the lowest was 3.05 in June 2023.

P/B Ratio: As of April 2025, the P/B ratio for Cal-Maine Foods is approximately 2.01 to 2.04. This ratio compares the company's market capitalization to its book value, providing insights into how the market values the company's net assets. Compared to an industry P/E of 17.47, Cal-Maine Foods appears to be undervalued.

EV/EBITDA Ratio: The enterprise value to EBITDA ratio is another critical valuation metric. As of April 19, 2025, Cal-Maine Foods's EV/EBITDA ratio is 2.99 or 3.0. Finbox data indicates that the latest twelve months EV/EBITDA is 4.4x. Historically, from fiscal years ending May 2020 to 2024, the EV/EBITDA ratio averaged 3.2x, with a median of 5.9x. The ratio peaked in May 2022 at 44.3x and hit a low in May 2020 of -48.3x.

Stock Price Trends: Over the past 12 months, Cal-Maine Foods's stock price has increased by approximately 46.03% to 54.49%. The stock reached an all-time high on January 20, 2025, at $116.41. As of April 16, 2025, the stock price was $92.50, down 4.19% from the previous day, but up 49.44% over the past 12 months.

Dividend Yield and Payout Ratios:

• The current dividend yield for Cal-Maine Foods as of April 10, 2025, is 6.47%.
• Another source mentions a forward dividend yield of 7.29%.
• TipRanks states an annual dividend yield of 4.32% with a dividend amount of $3.46 per share.
• ChartMill indicates a yearly dividend yield of 15.11%.
• Groww reports a dividend yield of 14.00%.
• Investing.com mentions a dividend yield of 14.32%.

The most recent dividend was declared for $3.456 with an ex-div date in 12 days and will be paid in 27 days. The previous dividend was 148.9c and was paid 2 months ago. The next dividend will be paid on May 15, 2025. The dividend payout ratio is 21.16%, which is considered sustainable. The company has been paying dividends for at least 10 years, indicating a reliable track record. The current TTM dividend payout is $5.96.

Analyst Consensus: According to analysts, Cal-Maine Foods (CALM) has a consensus rating of Hold. 25% of analysts recommend a Strong Buy, 0% recommend Buy, 25% suggest Holding, 25% advise Selling, and 25% predict a Strong Sell. The consensus price target is $63, suggesting a potential decrease of -31.14% from the current stock price. Another source indicates an average rating of 'Sell' with a 12-month stock price forecast of $74.5, which is a decrease of -18.57% from the latest price.

Here is a summary of analyst ratings:

• Consensus rating: Hold
• Price target: $63 (suggesting a -31.14% decrease)
• Another source indicates a price target of $71.33 based on the ratings of 3 analysts.
• The high price target is $97 issued by Stephens & Co. on March 6, 2025.
• The low price target is $52 issued by Goldman Sachs on July 17, 2024.

Considering these factors, Cal-Maine Foods appears to be potentially undervalued based on its P/E and EV/EBITDA ratios compared to historical averages. However, analysts' Hold consensus and price target suggest caution. For more detailed insights, you can explore: Breaking Down Cal-Maine Foods, Inc. (CALM) Financial Health: Key Insights for Investors

Cal-Maine Foods, Inc. (CALM) Risk Factors

Cal-Maine Foods, Inc. (CALM) faces a variety of risks that could significantly impact its financial health. These risks span internal operational challenges and external market dynamics, including industry competition, regulatory changes, and broader economic conditions.

One of the primary risks is the intense competition within the egg production industry. Cal-Maine Foods operates in a market where multiple producers vie for market share, which can lead to price volatility and reduced profitability. Factors such as:

• Overproduction
• Changing consumer preferences
• The entry of new competitors

These can all intensify competitive pressures. According to the 2024 report, the company acknowledges that maintaining its market position requires continuous innovation and efficiency improvements to compete effectively.

Regulatory and legal risks also pose a significant threat. Cal-Maine Foods is subject to extensive federal, state, and local regulations related to food safety, animal welfare, and environmental protection. Changes in these regulations can lead to increased compliance costs. For example, stricter standards for:

• Egg handling
• Animal housing
• Waste disposal

These can require substantial investments in infrastructure and operational adjustments. The company's 2024 filing highlights ongoing compliance efforts and the potential for future regulatory changes to impact its financial results.

Market conditions, particularly fluctuations in commodity prices and feed costs, represent another critical risk. The price of eggs and the cost of feed (primarily corn and soybean meal) are subject to significant volatility due to factors such as:

• Weather patterns
• Global demand
• Government policies

These fluctuations can directly impact Cal-Maine Foods' profitability. For instance, a sharp increase in feed costs or a decline in egg prices can squeeze margins and reduce earnings. The company actively monitors these market trends and employs hedging strategies to mitigate some of this risk, as detailed in their 2024 financial statements.

Operational risks, including disease outbreaks and supply chain disruptions, can also affect Cal-Maine Foods' ability to maintain consistent production levels. Outbreaks of avian influenza, for example, can lead to the culling of flocks and significant disruptions in egg supply. Similarly, disruptions in the supply chain for feed or other essential inputs can impact production costs and availability. The company maintains biosecurity protocols and diversification strategies to minimize these operational risks, as outlined in their 2024 risk management report.

Financial risks include factors like debt levels and access to capital. As of fiscal year 2024, Cal-Maine Foods has a specific amount of debt. Maintaining financial flexibility and access to capital is crucial for funding operations, investments, and potential acquisitions. The company's financial strategy focuses on managing debt levels and maintaining strong relationships with lenders to ensure access to capital when needed, as discussed in their 2024 investor presentations.

Cal-Maine Foods addresses these risks through a combination of mitigation strategies. These include:

• Implementing biosecurity measures to prevent disease outbreaks
• Diversifying its supply chain to reduce reliance on single suppliers
• Employing hedging strategies to manage commodity price risk
• Maintaining a strong balance sheet to ensure financial flexibility

The effectiveness of these strategies is continuously evaluated and adjusted based on changing market conditions and regulatory requirements. For further insights into the company's strategies, see Mission Statement, Vision, & Core Values of Cal-Maine Foods, Inc. (CALM).

Below is a summary of key risks and mitigation strategies based on the latest reports:

Understanding these risks and mitigation strategies is crucial for investors assessing Cal-Maine Foods' financial health and long-term prospects.

Cal-Maine Foods, Inc. (CALM) Growth Opportunities

Cal-Maine Foods, Inc. (CALM) is strategically positioned for future growth through several key drivers. These include product innovations, market expansions, strategic acquisitions, and a focus on sustainability and ethical production methods. The company's commitment to adapting to changing consumer preferences and regulatory trends is also a significant factor in its growth prospects.

Key growth drivers for Cal-Maine Foods, Inc. (CALM):

• Product Innovations: Cal-Maine invests in research and development to improve production processes, enhance product quality, and explore new market opportunities. Innovations in packaging and product offerings are aimed at meeting changing consumer demands and enhancing convenience.
• Market Expansions: The company is exploring opportunities in international markets, especially in regions with rising middle-class populations, which could drive growth. Expanding the egg products portfolio enables leveraging existing distribution channels and extending reach in foodservice and retail marketplaces.
• Acquisitions: Cal-Maine Foods has a proven growth strategy focused on expanding shell egg production capacity and product mix through strategic acquisitions. For instance, the acquisition of assets from Tyson Foods in Dexter, Missouri, enhances production capabilities and diversifies product offerings. Cal-Maine Foods is actively seeking other acquisition opportunities that complement its operating model and further extend its market reach.

Cal-Maine Foods, Inc. (CALM) has demonstrated impressive financial results, exceeding expectations in the second quarter of fiscal year 2025. Net sales soared to $954.7 million, and net income reached $219.1 million. Earnings per share (EPS) stood at $4.47, significantly outperforming historical figures and market estimates. The company sold 329.8 million dozens of shell eggs, an increase of 14.4%, with the average selling price per dozen rising to $2.740 from $1.730.

Cal-Maine Foods, Inc. (CALM) has a clear strategic direction focusing on cage-free egg production and market expansion. Strategic investments, particularly in cage-free egg production, align with consumer trends and potential regulatory changes. The company has committed $40 million to construct five new cage-free layer houses across multiple states, increasing its capacity by approximately 1.0 million hens by late summer 2025. The ongoing conversion of the former Tyson Foods facilities in Dexter, Missouri, will add 1.2 million free-range hens by fall 2025.

Future revenue growth projections and earnings estimates for Cal-Maine Foods, Inc. (CALM):

Strategic initiatives and partnerships that may drive future growth for Cal-Maine Foods, Inc. (CALM):

• Expansion of Cage-Free Production: Investing in cage-free infrastructure to capitalize on the growing demand for cage-free eggs.
• Acquisition of Tyson Foods' Assets: Repurposing assets for egg and egg product production to enhance production capabilities.
• Investment in MeadowCreek Foods, LLC: A strategic investment to grow presence in the egg products sector and seek solutions for economically feeding a growing world population.
• Acquisition of a 51% stake in Crepini LLC: Entering the value-added market with egg-based products like wraps, pancakes, and crepes.
• Expansion of Blackshear, Georgia facility: Investing $15 million to expand the facility for extended shelf-life liquid egg products.
• Acquisition of Echo Lake Foods, Inc: Acquisition allows Cal-Maine Foods to enter the large, growing and highly stable value-added food portion of the sector, providing access to additional long-term growth opportunities, while reducing earnings volatility; Expect significant synergies from egg purchasing and other operational efficiencies; Expect to be at least mid-single digit accretive to Cal-Maine Foods' earnings starting in fiscal 2026, with a return on equity in excess of the Company's cost of capital. Echo Lake Foods had annual revenues of approximately $240 million in 2024 with a five-year CAGR of approximately 10%.

Cal-Maine Foods, Inc. (CALM) possesses several competitive advantages that position the company for growth:

• Market Leadership: As the largest egg producer in the U.S., Cal-Maine benefits from economies of scale and a well-established distribution network.
• Brand Portfolio: The company's portfolio of well-known brands, including Egg-Land's Best and Land O' Lakes, provides a competitive edge in the retail market.
• Specialty Egg Focus: Cal-Maine is well-positioned to capitalize on the growing demand for specialty eggs, such as cage-free and organic options. Sales of specialty egg volumes increased by 8.8% to 118.1 million dozens sold for the third quarter of fiscal 2025 compared with 108.6 million dozens sold for the prior-year period.
• Extensive Distribution Network: Maintaining its edge through an extensive distribution network, strong retailer relationships.
• Cost Advantages: Claiming to be a low-cost producer with fully-integrated operations in 16 states and a focus on automation throughout the supply chain.

For more insights into Cal-Maine Foods, Inc.'s values, see: Mission Statement, Vision, & Core Values of Cal-Maine Foods, Inc. (CALM).