Cal-Maine Foods, Inc. — Q1 FY2027 10-Q
Period: Thirteen weeks ended August 29, 2026; comparison is the thirteen weeks ended August 30, 2025. The company produces and sells conventional and specialty shell eggs and prepared foods. Results are unaudited and interim performance may not indicate full-year results.
Financial results and liquidity
| Metric | Q1 FY2027 | Q1 FY2026 |
|---|---|---|
| Net sales | $539.6 million | $922.6 million |
| Gross profit (margin) | $0.4 million (0.1%) | $311.3 million (33.7%) |
| Operating income (loss) | $(82.2) million | $249.2 million |
| Net income (loss) attributable to Cal-Maine | $(58.6) million; $(1.26) per diluted share | $199.3 million; $4.12 per diluted share |
| Operating cash flow | $(101.4) million | $278.6 million |
| Investing cash flow | $110.7 million | $(409.7) million |
| Financing cash flow | $(5.1) million | $(114.2) million |
Net sales fell 41.5% year over year, principally as conventional egg prices declined with flock recovery and improved supply. Average conventional egg price per dozen fell 59.3%; specialty egg price fell 10.7%. Conventional shell eggs recorded a $71.0 million segment loss, versus $168.2 million segment income a year earlier. Specialty shell egg segment income declined to $14.9 million from $64.2 million; prepared foods segment income was $7.8 million, down from $13.2 million. Prepared-food sales fell 13.0%, mainly due to temporary production reductions during expansion and optimization work.
Gross margin was approximately 0.1%, versus 33.7% a year earlier; operating margin was approximately (15.2)%, versus 27.0%. The tax benefit was $18.0 million, with a 24.2% effective tax rate. Interest income, net, was $8.0 million, down from $12.9 million.
At August 29, 2026, cash and cash equivalents were $113.5 million and available-for-sale investments were $654.1 million. Current assets were $1.472 billion, current liabilities $191.1 million, working capital approximately $1.281 billion, and the current ratio 7.7. Total liabilities were $433.4 million; the balance sheet reports no borrowings. Cash, cash equivalents and restricted cash ended the quarter at $117.8 million. The company had $5.9 million of standby letters of credit outstanding as of September 30.
The company entered into a new $250 million senior unsecured revolving credit facility on August 31, 2026, maturing August 31, 2031, with an accordion option for up to an additional $250 million subject to lender consent. Management said available cash, investments, projected operating cash flows and facility availability should fund needs for at least 12 months and existing capital commitments thereafter.
Changes, capital allocation and outlook
- The company attributes the sharp earnings decline primarily to lower conventional egg prices as supply recovered after HPAI disruptions. Management cited USDA estimates of 318.7 million layer hens at September 1, 2026, above the five-year average of 312.1 million, and industry estimates suggesting still greater supply.
- During the quarter, the company paid $25 million for an Eggland’s Best franchise territory in the Northeast. It also cited recent acquisitions of Van’s Foods, Creighton Brothers, and Clean Egg, in addition to Echo Lake Foods in 2025.
- Capital expenditures were $26.6 million, primarily for construction projects. Production-capacity expansion and optimization projects are expected to continue through mid-to-late fiscal 2027; no quantified earnings or revenue guidance is provided.
- No first-quarter dividend will be paid under the variable dividend policy. The company must recover $94.5 million of cumulative losses before a dividend can resume. It repurchased 66,601 shares under its program during the quarter, with $315.7 million of authorization remaining at quarter-end; it reported $14.9 million of additional repurchases after quarter-end.
- Management highlighted volatility in egg prices and feed costs, seasonality, HPAI and other operating risks, demand and product-mix uncertainty, and risks related to acquisitions and expansion. It said recent egg-price declines reflect improved supply and less retailer and foodservice need to accelerate purchases or build inventory.
Contingencies and unusual items
- Multiple purchaser lawsuits allege a conspiracy to inflate conventional shell egg prices. The cases have been transferred to multidistrict proceedings in Wisconsin; the company disputes the allegations and intends to defend itself.
- The company agreed to resolve a DOJ and 17-state antitrust investigation, subject to court procedures. It denied wrongdoing; no fines or penalties were assessed. Terms include compliance and reporting measures, a commitment to donate 30 million eggs, and $1.5 million paid to settling states. Washington did not join and its investigation remains unresolved; management cannot estimate potential losses, if any.
- In the Kraft processed-egg litigation, a $43.6 million trebled judgment against defendants remains subject to post-judgment proceedings and appeal. Cal-Maine reported a $19.6 million accrual for its estimated proportional share, excluding attorneys’ fees.
- The Oklahoma watershed matter is subject to a settlement agreement, court procedures and continuing environmental measures; the company said it does not expect a material financial impact. A $2.5 million fair-value reduction in the Fassio contingent consideration lowered SG&A during the quarter.
Important facts for investors to verify
- Whether egg prices and supply stabilize, and how lower prices and feed costs affect margins and operating cash flow.
- Progress, costs and production recovery from prepared-food and cage-free expansion projects, including the impact of recent acquisitions.
- Developments in the Washington investigation, purchaser antitrust litigation, Kraft appeal and Oklahoma settlement, including any changes to recorded contingencies.
- Cash use, share repurchases and the cumulative-profit condition for resuming dividends.
- Credit-facility availability and compliance with its financial covenants as operating results change.