Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Cal-Maine Foods tumbles as EPS weighs on shares

Published 29/12/2022, 15:42
Updated 29/12/2022, 15:42
© Reuters.

© Reuters.

By Sam Boughedda 

Cal-Maine Foods (NASDAQ:CALM) posted its fiscal second quarter earnings after the close Wednesday, sending its shares tumbling in early Thursday trading.

CALM shares are down over 12% at the start of the session, trading around the $54.40 mark at the time of writing.

Despite the share price tumble, the fresh egg producer posted earnings of $4.07 per share, while revenue came in at $801.7 million, growing 110% year-over-year and beating the consensus estimate of $765 million.

"Our financial results for the quarter were boosted by a record top line performance of $801.7 million in net sales. Net income of $198.6 million for the second quarter of fiscal 2023 was another Company record," said Cal-Maine Chief Financial Officer Max Bowman.

The company said its performance during the quarter was boosted by its significantly higher selling prices, its focus on cost control, and its ability to adapt to inflationary market pressures, which led to improved profitability overall with a gross profit margin of 39.6% for the second quarter of fiscal 2023, another record for Cal-Maine Foods.

The business added that egg prices are continuing to increase in fiscal 2023 due to the effects of a further reduction in supply related to the impact of the HPAI outbreak, combined with solid demand boosted in its fiscal second quarter of 2023 by typical seasonal consumer demand.

Reacting to the report, BofA analysts told investors in a note that CALM reported an EPS of $4.07, below BofA's estimate of $4.30 and Visible Alpha Consensus of $4.21.

"Downside versus our model was driven by higher cost of goods, specifically higher outside egg purchases. We expect the EPS miss will weigh on shares given year-to-date performance in CALM's stock price and, in our view, a potential shift in seasonal egg pricing down post Christmas," wrote the analysts, who reiterated an Underperform rating and $55 price target on the stock.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.