Cal-Maine returns to profitability in quarter
September 27, 2010
JACKSON, MISS. — Cal-Maine Foods, Inc. returned to profitability in the first quarter with the help of lower feed costs. Also, the recent egg recall had a minimal effect on results in the quarter.
Income for the first quarter ended Aug. 28 was $4,763,000, equal to 20c per share on the common stock, which compared with a loss of $3,832,000 during the same quarter of the previous year. Sales were $190,403,000, up 1% from $187,666,000 during the same quarter of the previous year.
“We are pleased with our financial and operating results for the first quarter, marking a solid start to fiscal 2011 for Cal-Maine Foods,” said Fred Adams Jr., chief executive officer. “Our improved sales were primarily driven by increased consumer demand for our value-added specialty eggs, which carry higher retail sales prices. Overall, we experienced a modest improvement in both volume and average selling prices compared with the first quarter of fiscal 2010. Our retail business has remained very steady, while our food service sales have been affected by reduced restaurant traffic, as consumers are not dining out as frequently.”
The company said while egg prices initially moved higher in late August following the egg recall, prices have since dropped back below levels before the recall. But consumer demand also has dropped, and it is still too soon to predict the long-term effect on the egg market.
“Cal-Maine’s operations have continued to run efficiently, and we benefitted from lower feed costs in the first quarter of fiscal 2011 compared with a year ago,” Mr. Adams said. “However, corn prices have risen recently and will likely remain volatile in the year ahead.”