RIDGELAND, MISS. — Improved operating results helped drive a return to modest profitability at Cal-Maine Foods, Inc. in the second quarter, offsetting the impact of higher costs for feed ingredients, processing, packaging, transportation and labor.

Net income at Cal-Maine Foods in the second quarter ended Nov. 27 totaled $1.17 million, equal to 2¢ per share on the common stock, down from $12.16 million, or 25¢ per share, in the same period a year ago.

Net sales increased 13% to $390.9 million from $347.33 million.

“We were pleased to report higher sales for the second quarter of fiscal 2022 compared with the prior year, driven by improved shell egg pricing,” said Dolph Baker, chairman and chief executive officer. “For the second quarter of fiscal 2022, the net average selling price for all eggs increased 11.9% to $1.373 per dozen compared with $1.227 per dozen in the prior-year period. Our sales volumes also improved compared to the previous record sales volumes in the second quarter of fiscal 2021.”

Mr. Baker said consumer preference for specialty eggs, including cage-free eggs, continues to expand. In the second quarter specialty egg sales totaled $155.9 million, accounting for more than 41% of total shell egg revenue, which compared with $134.1 million, or nearly 40%, in the prior-year quarter.

Looking forward, Mr. Baker said Cal-Maine is focused on exploring opportunities to enhance its product portfolio. Recent examples include the company’s strategic investments in MeadowCreek Foods and Southwest Specialty Eggs, LLC.

“Cal-Maine Foods will serve as the preferred provider to supply specialty and conventional eggs that MeadowCreek needs to manufacture egg products,” Mr. Baker said. “This is an exciting opportunity to expand our presence in the egg products sector. We believe we have the right team in place to execute this strategy and look forward to extending our market reach to provide egg products for institutional, foodservice and retail needs. Our focus on hard-cooked offerings allows us to harness more value from medium grade eggs typically produced in the pre-peak phase of lay and augment our expansion into this nutritious and portable protein category.”

As part of its investment in Southwest Specialty Eggs, Cal-Maine Foods will acquire warehouse and distribution capability to expand Southwest Specialty Eggs’ total customer base in the southern California, Arizona and Nevada markets.

“Given the cage-free egg requirement in California will take effect on Jan. 1, 2022, we believe this investment will be immediately accretive given our enhanced ability to better utilize our cage-free egg offerings and support the sales and distribution of other specialty eggs into these important retail markets,” Mr. Baker said.

He also said the company’s board of directors has approved a $23 million capital project to expand its cage-free egg production at its Okeechobee, Fla., facility. The project will add capacity for approximately 400,000 cage-free hens and 210,000 pullets, he said.