Cal-Maine Foods Q3 profit falls less than expected

Overview

• U.S. egg producer's fiscal Q3 revenue fell 53% but beat analyst expectations

• EPS for fiscal Q3 beat analyst expectations

• Company repurchased $24.3 mln in shares during the quarter

Outlook

• Company expects prepared foods volumes to recover as capacity and utilization improve

• Cal-Maine Foods anticipates more stable, higher-quality earnings over the long term

• Company sees durable shifts in egg category benefiting its diversified strategy

Result Drivers

• EGG PRICE DECLINE - Co said materially lower conventional and specialty egg prices drove the sharp drop in sales and profits

• PREPARED FOODS GROWTH - Prepared foods sales rose sharply, mainly due to the acquisition of Echo Lake and growth from Crepini

• HIGHER SUPPLY - Improved supply following prior-year avian influenza disruptions contributed to lower wholesale egg prices

Company press release: ID:nGNX4HZN7R

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the fishing & farming peer group is "buy."

• Wall Street's median 12-month price target for Cal-Maine Foods Inc is $85.00, about 7.4% above its March 31 closing price of $79.15

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 11 three months ago

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