Cal-Maine's Operating Loss Widens as Egg Prices Stay Low
Gross profit was $403,000 in the quarter ended Aug. 29, 2026, and the company posted a $58.6 million net loss, or $1.26 a share.
Cal-Maine Foods, Inc. (CALM), the largest egg company in the United States, reported an operating loss of $82.2 million for the first quarter ended Aug. 29, 2026, as conventional shell-egg prices stayed under pressure after industry layer-flock repopulation.
The loss widened from $58.8 million in the fourth quarter of fiscal 2026. Net sales were $539.6 million. Gross profit was $403,000. Net loss attributable to Cal-Maine was $58.6 million, or $1.26 a share.
President and Chief Executive Officer Sherman Miller said first-quarter results reflected both the current point in the conventional shell-egg cycle and the continued evolution of the company’s earnings model. He said conventional shell-egg pricing remains under pressure from an industry supply imbalance, while underlying demand remains healthy.
Conventional Shell Eggs sales were $201.7 million, down 59.5% from a year earlier, primarily reflecting a 59.3% decrease in average selling price per dozen. Volume remained relatively flat. An abundantly supplied egg market following fiscal 2026 repopulation, together with historically softer seasonal pricing, produced substantially lower conventional prices. Hybrid and cost-plus pricing arrangements with certain customers partially mitigated the effect. Segment loss was $71.0 million, compared with segment income of $168.2 million in the year-ago quarter, as lower pricing more than offset lower outside egg-purchase costs. Operating margin in the segment was a 35.2% loss.
Specialty Shell Eggs sales were $236.9 million, down 14.0% from a year earlier, reflecting a 10.7% decrease in average selling price per dozen and a 3.8% decrease in volume. The prior-year period had benefited from atypical pricing relationships between conventional and specialty shell eggs that temporarily accelerated demand for certain specialty categories. During the current quarter, lower volumes reflected a more typical demand relationship across the two categories. Segment income was $14.9 million, compared with $64.2 million a year earlier, primarily due to lower selling prices and higher cost per dozen from increased feed and production costs, partially offset by lower selling, general and administrative expense. Operating margin was 6.3%.
Prepared Foods sales were $63.0 million, down 13.0% from a year earlier, reflecting a 19.3% decrease in pounds sold, primarily related to temporary production reductions during capacity expansion and network optimization, partially offset by a 7.9% increase in average selling price per pound. Segment income was $7.8 million. Operating margin was 12.4%.
Combined Specialty Shell Eggs and Prepared Foods accounted for 54.1% of net sales, compared with 37.1% a year earlier. Prepared Foods alone accounted for 11.7% of net sales.
The company acquired an additional Eggland’s Best franchise territory in the Northeast, expanding its distribution footprint and increasing Specialty Shell Eggs penetration in one of the nation’s largest, highest-income consumer markets. Previously announced projects to increase efficiency and production capacity are expected to increase Prepared Foods production capacity by more than 60% by the first half of fiscal 2028, compared with fiscal 2026 year-end.
Miller said there are two important timing dynamics: when the conventional shell-egg market begins to rebalance and when investments in Prepared Foods translate into greater earnings contribution. The company cannot precisely predict the first, but has considerably greater visibility into the second. Current earnings, he said, reflect a difficult point in the commodity cycle while the company is simultaneously investing ahead of growth, and the company does not believe that fully reflects the through-cycle earnings power it is building.
Cash and short-term investments were $767.6 million as of Aug. 29, 2026.
Cal-Maine repurchased 66,601 shares for $5.0 million during the first quarter of fiscal 2027. The repurchase program permits up to $500 million, of which $315.7 million remained available as of quarter-end. Subsequent to the end of the first quarter, the company repurchased 204,888 shares for $14.9 million.
Pursuant to its variable dividend policy, Cal-Maine will not pay a cash dividend with respect to the first quarter of fiscal 2027. The company will not pay a dividend for a subsequent profitable quarter until it is profitable on a cumulative basis computed from the date of the last quarter in which a dividend was paid. As of Aug. 29, 2026, the cumulative loss to be recovered before payment of any future dividend under the variable dividend policy was $94.5 million.