In a release dated October 1^st Cal-Maine Foods Inc. (CALM) announced results for the 1^st Quarter of FY 2026 ending August 30^th 2025. This review summarizes data provided in the Company release and the concurrently filed SEC 10-Q Report.

Cal-Maine Foods fell short of analysts’ revenue estimate ($960 million) by 4 percent and on EPS ($5.35) by 23 percent.

It is noted that market conditions during Q1 2026 were favorable with an average Cal-Maine unit revenue of $2.49 per dozen for all eggs, compared with Q1 2025 attaining a corresponding price of $2.39 per dozen. Financial results that were below Street consensus reduced CALM price by 3.0 percent at the October 2^nd opening of trading at $90.33 but with a recovery to $92.58 at the close.

Cal-Maine represents a bellwether for the shell egg sector as the only public-quoted, pure-play egg company in the industry, supplying close to 20 percent of domestic shell egg consumption. The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as $ x 1,000 except EPS)

Notes: $14.1 million ‘other income,’(excluding interest earned) in Q1 2026 compared to $11.0 million in Q1 FY2025:

             $0.2 million loss on non-controlling interest in Q1 2026 compared to $0.4 in Q1 FY2025.

CALM Trailing P/E =3.8.  Beta = 0.2

52-Week Range in Share Price:  $75.61 to $126.40   50-day Moving average of $107.61

Market close, Wednesday October 1st $92.97 pre-release.

Market open, Thursday 2^nd $90.33 down 2.8 percent, closing at $92.58

94.4 percent of shares held by institutions; 9.8 percent insiders; 12.2 percent of float was short on September 15^th

In reviewing the CALM Q1 2026 report and the SEC 10-Q submission the following values represent key data for the most recent Quarter (with Q1 FY 2025 and percentage differences in parentheses for comparison):-

• Shell Egg sales attained $789.4 million in Q1 2026. Shell eggs comprised 85.6 percent of total revenue. ($741,513 million, in Q1 2025, based on 94.3 percent of revenue. Sales value for shell eggs was up 6.5% reflecting higher average unit value).
• Prepared Foods sales attained $83.9 million in Q1 2026. This category comprised 9.1 percent of total revenue. ($8.9 million, in Q1 2025, based on 1.1 percent of revenue). Sales value for Prepared Foods was up 839% reflecting acquisition of Crepini Foods and Echo Lake Foods.
• Egg Product sales attained $37.1 million in Q1 2026. This category comprised 4.0 percent of total revenue. ($9.1 million, in Q1 2026, based on 1.2 percent of revenue). Sales value for Egg Products was up 32% reflecting higher average unit value).
• Sales to the retail channel attained $739.8 million in Q1 2026, comprising 80.3 percent of total revenue ($669.7 million in Q1 2025, -1.0%) Sales to the Food Service sector attained $152.1 million in Q1 2026, comprising 16.5 percent of total revenue ($109.8 million in Q1 2025, +38.5% reflecting sales of Prepared Foods)
• Dozen shell eggs sold (thousands): 317,587 (309,979; +2.5%)

• Average selling price of all shell eggs: $2.486 per dozen; ($2.392 per dozen;            +3.9%).
• Average selling price of specialty eggs (excluding co-pack): $2.396 cents per dozen; ($2.335 per dozen; +2.6%).
• Average selling price of generic eggs: $2.539 cents per dozen; ($2.424 cents per dozen; +4.7%).
• Differential between specialty eggs and generic eggs: -14.3 cents per dozen; (-8.9 cents per dozen; +60.6%)
• Specialty eggs as a proportion of volume sold: 37.2%; (35.5%; +4.8%)
• Specialty eggs as a proportion of sales value: 35.9%; (34.6%; +3.8 %)
• Proportion of eggs sold that were produced by Cal-Maine and their contract flocks in Q1 2026: 88.9% (86.1%; +3.3%).
• Feed cost 47.3 cents per dozen (including specialty and breeders) (49.4 cents per dozen, down 4.3%)

The Q1-2026 10-Q report contained the following statements on pricing:-

“The majority of our conventional eggs are priced and sold under frameworks that generally utilize market-based formulas tied to independently quoted regional wholesale market quotes. The majority of our specialty eggs are sold under frameworks that do not utilize market-based formulas, although we do have some customers that prefer market-based pricing for cage-free eggs. As a result, specialty egg prices typically do not fluctuate as much as conventional pricing”.

“During first quarter fiscal 2026, a higher proportion of our conventional eggs were sold on a hybrid pricing model that takes into account both our cost of production as well as wholesale market prices, instead of solely market-based pricing, in response to customer demand. We believe the hybrid pricing arrangement may help some customers better plan and manage their businesses and reinforces our role as a trusted supplier. Although hybrid pricing may reduce our profitability when egg prices are high, compared to pure market-based pricing, it could enhance our profitability when egg prices are low, and lead to reduced volatility in our financial results. A majority of our conventional eggs continue to be priced and sold under frameworks that generally utilize market-based formulas tied to independently quoted regional wholesale market quotes”.

The top three customers represented 49.2 percent of sales value, with Walmart and Sam’s Club comprising 33.6 percent in FY 2025.

Presumed Q1 FY 2026 production costs for all categories of shell eggs expressed as cents per dozen (rounded) comprised:-

• Feed               47.3c
• Production.    45.8
• Nest run.        93.1
• Packing          31.8
• Delivery.          3.3
• Overhead.        3.7

Total.           131.9

Note: Provision for pullet depreciation, is presumably included in the ‘production’ expense category

Cal-Maine Foods maintained a flock of 48.3 million hens on May 31^st 2025 reflecting acquisitions and growth, with 11.5 million pullets plus parent breeders representing under two percent of the total flock. 

• Effective May 31^st 2025 production capacities comprised:-

• Hens: 51.8 million on 49 farms
• Pullets:14.3 million on 37 farms.
• Packing: 22,490 cph in 50 plants.
• Hatching: 356,300 pullet chicks per week in 2 facilities.
• Parent breeders: 215,000 hens.
• Feed : 1,000 tons per hour in 30 plants.
• Egg products: 72,700 lbs. per hour. 

The following observations relate to the comparison of Q1 2026 with the corresponding Q1 2025:-

• Cal-Maine Foods was not affected by the HPAI epornitic during FY 2022. During Late December 2023 (Q3 FY 2024) the Chase, KS. Complex comprising 1.5 million hens and 240,000 pullets, representing 3.3% of the then total flock was depopulated as a result of HPAI. On April 1^st 2024 (Q4 2024) the Farwell, TX complex was diagnosed with HPAI, requiring depopulation of 1.6 million hens and 0.34 million pullets. Both complexes have been re-populated and are in full production. No further outbreaks occurred in FY 2025 or during the most recent quarter. Cal-Maine management are applying appropriate biosecurity precautions as noted in the Analysts’ call.
• Comparing Q4 2025 with Q4 2024, gross profit was positively influenced by higher unit revenue for generic eggs but with minimal to negative benefit from specialty eggs. The average 4.3 percent lower feed cost to 47.3 cents per dozen was offset by an 8.9 percent higher cost in the ‘other’ category including labor and maintenance ,
• In a market characterized by high unit prices for generics, the relative contribution of specialty eggs is less important to net earnings in contrast to a down-market for conventional eggs. Normality in the market should be restored by the end of Q2 FY 2026 with generic eggs at a lower unit price compared to specialty eggs, as flocks are replaced. This presumption is subject to a low incidence rate of HPAI, through early winter months of 2025 and the spring of 2026.

The Q1 press release repeated comments from the Q4 FY 2025 report noting “Significant progress on proactive steps to add production capacity and help mitigate the egg supply shortage across the country, including:

• A 10% increase in the average number of layer hens during Q1 2026 compared to the prior-year quarter, reflecting repopulation of flocks and both organic and inorganic expansion.
• A 46% increase in the Company’s breeder flocks during Q1 FY 2026 compared to the end of the prior-year quarter.
• A 77% increase in total chicks hatched during Q1 2026 compared to the prior-year quarter.
• Continued progress on ongoing organic expansion projects that are expected to add approximately 1.1 million cage-free layer hens and 250,000 pullets and contract production of 1.2 million free-range layer hens by the end of calendar 2025.
• Added production support through the integration of recently acquired assets”

Commenting on the first quarter of fiscal 2026, Sherman Miller, president and CEO, stated, “We delivered our strongest first quarter in company history, aided by higher specialty egg sales, the expansion of our prepared foods platform and supported by solid performance in conventional eggs. Cal-Maine Foods enters fiscal 2026 from a position of strength and is a uniquely attractive combination of both value and growth in today’s food sector”.

He continued, “Cal-Maine Foods is advancing as a diversified and consumer-driven egg-based food company anchored by three clear priorities: expanding specialty eggs and prepared foods; pursuing disciplined, accretive M&A; and leveraging operational and financial excellence. Executing on these strategic priorities in unison is driving tangible results, and positioning us for accelerated growth, broader diversification, and stronger, more consistent earnings.”

Miller added, “Cal-Maine Foods is advancing its growth strategy by expanding specialty eggs, while building a scaled prepared foods platform across multiple formats and dayparts to meet accelerating demand for differentiated, convenient, and protein-rich foods. Echo Lake Foods and Crepini Foods are compelling recent examples, expanding prepared foods into new formats and dayparts, while deepening differentiation in both retail and foodservice. These acquisitions reflect Cal-Maine’s disciplined approach: targeting assets that enhance mix, improve margin profile, and build capabilities that compound long-term value”.  He noted “Our acquisition of Echo Lake Foods is on track to exceed every financial and operational expectation set at the time of the transaction”.

Miller concluded “With a strong pipeline of opportunities, M&A remains an important lever to deploy capital prudently, build scale, extend reach into value-added categories, and reinforce Cal-Maine’s leadership in eggs and egg-based foods”.

As of April 14^th Cal-Maine Foods ceased to be a “controlled company” with conversion of Class A shares to common stock. As part of the buy-back program the Company purchased shares to the value of $50 million from entities representing the Founder family. Future additional purchases valued at $450 million have been authorized by the Board.

Recent acquisitions include:-

• ISE America was purchased in Q1 2025: for $111.5 million comprised 4.7 million hens, (1.2 million cage-free), pullets, housing, packing plants and other facilities on 4,000 acres in MD., NJ., DE. and SC., representing a unit expenditure of $25/hen with established markets.
• Cal-Maine acquired the remaining 9.2 percent equity in Meadow Creek Foods located in MO. during the 2^nd Quarter of FY 2025
• A majority shareholding in Crepini Foods was acquired in Q2 of FY 2025
• Echo Lake Foods was acquired in Q3 of FY 2025.
• Feed production facilities were acquired from Deal-Rite Foods in North Carolina in Q3 FY 2025 to supply cage-free contract farms in central Nort Carolina.

Cal Maine Foods has expanded by purchase of existing integrated production facilities but has extended acquisitions to value-added products over the past two years.

The 10-Q Report documented approved capital investment of $257.3 million for FY 2026. This comprised a feed mill (3.8%); Egg products equipment (7.6%); Expansion of prepared Foods (5.8%) and new cage-free housing and conversions (82.8%). Of this total $210.2 million (81.7%) has been committed with $47.1 million to be expended.