Benzinga - by Chris Katje, Benzinga Staff Writer.
The prices of many food items have soared over the past several years, making it more costly for consumers to make their grocery trips as they deal with the impact of higher inflation.
Among the items that saw a sharp rise in price were eggs, which also became the subject of memes and calls for people to invest in eggs.
Fast forward to now and the price of eggs are hitting yearly lows.
What Happened: The largest egg producer in the U.S. recently reported quarterly financial results that showed egg prices continuing to fall, a sharp contrast realized by consumers over the past year.
Cal-Maine Foods Inc (NASDAQ: CALM) reported first-quarter earnings per share and revenue of $459.34 million, both numbers fell shy of analysts’ estimates according to data from Benzinga Pro.
“After reaching record high levels in fiscal 2023, average selling prices for shell eggs have since returned to more normalized levels as the overall egg supply recovers from the most recently highly pathogenic avian influenza outbreak,” Cal-Maine Foods CEO Sherman Miller said.
Miller said customer demand was favorable for the company based on the demand for conventional eggs over specialty eggs.
“We continue to focus on offering customers a wide range of quality choices in shell eggs, as well as egg products offerings, with a favorable product mix in line with changing consumer demand trends.”
For comparison, last year’s first quarter saw revenue of $658.3 million and earnings per share of $2.57 based on the higher price of eggs. The company referenced last year’s first quarter as “an exceptionally strong first quarter performance driven by record average conventional selling prices.”
In the first quarter, the average price of a dozen conventional eggs for Cal-Maine was $1.241 compared to $2.368 in the prior year. The company’s average price of a dozen eggs counting conventional and specialty was $1.589 compared to $2.275 in the prior year.
Related Link: Egg Prices Soar As Other Goods Drop, Did Bill Gates See This Coming?
Why It’s Important: The lower prices of eggs could hurt profit margins for Cal-Maine Foods, a company mentioned among the beneficiaries of soaring egg prices.
The stock became a common trending stock on social media and a way to play the rise of egg prices.
The company recently announced an acquisition of Fassio Egg Farms, a move that will add around 1.2 million laying hens and increase the size of Cal-Maine’s operations. The acquisition will expand the company’s reach in the western U.S. according to Miller.
The company acknowledged there could be future outbreaks of Highly Pathogenic Avian Influenza (HPAI), but had been no positive tests at any of its facilities.
Cal-Maine said the U.S. layer hen flock has nearly recovered from the most recent HPAI outbreak that led to higher egg prices but is still below the five-year average.
Earlier this year, several analysts cut their price targets for Cal-Maine as the supply of hens and eggs had risen from the levels that saw spikes in egg prices.
CALM Price Action: Shares of Cal-Maine Foods closed at $44.07 on Thursday versus a 52-week trading range of $42.25 to $65.19. Shares of the egg producer are down 21% year-to-date in 2023.
Read Next: Cal Maine Foods Adjusted EPS Estimates Slashed Amid Lower Egg Prices: Analyst
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