The company reported net income of $143.0 million, or $2.97 per basic share and $2.95 per diluted share, for the first quarter of fiscal 2016, compared with $27.7 million, or $0.57 per basic and diluted share, for the first quarter of fiscal 2015. The first quarter ended August 29.
The company also experienced a substantial gain in net sales, as net sales for the first quarter were $609.9 million, up from the $356.9 million recorded a year earlier.
Dolph Baker, chairman, president and chief executive officer of Cal-Maine Foods, stated, “Our financial and operating results for the first quarter marked a very strong start to fiscal 2016 with record quarterly sales and net income. Overall sales were up 70.9 percent over the prior year period, as average selling prices for shell eggs spiked to record levels during the first quarter and were up 65.7 percent compared with the same period last year. Volumes were also up slightly in what is typically our slowest quarter, with total dozen shell eggs sold up 2.8 percent over the first quarter of fiscal 2015.”
Baker noted that the egg industry is still feeling the effects of the substantial reduction in the national laying hen flock that occurred this past spring related to the avian influenza (AI) outbreaks in the upper Midwestern United States.
He added that his company believes egg prices will remain very high until the supply situation returns to more normal levels.
“While there have been no further reported outbreaks of AI, we continue to closely monitor the situation and are working with egg industry associations and government officials to identify ways to mitigate the risk of future outbreaks. There have been no positive tests for AI at any of the Cal-Maine Foods locations, however, we have strengthened our biosecurity measures at all of our facilities,” said Baker.
Demand trends for eggs remain strongWhile egg prices have gone up significantly since the avian influenza outbreak began, Baker reports that demand for eggs from the retail and egg products markets have been favorable.
“We continue to see strong consumer demand for specialty eggs, and we remain focused on providing our customers with a product mix that meets this demand. For the first quarter, specialty egg sales, including those sold through co-pack arrangements, accounted for 24.5 percent of our total number of shell eggs sold and 27.1 percent of our shell eggs revenue. With a full complement of conventional, nutritionally enhanced, cage-free and organic eggs, we are well positioned to capitalize on additional opportunities to market and sell specialty eggs in fiscal 2016,” said Baker.