Cal-Maine nearly triples net income for second quarter

Cal-Maine Foods reported a net income of $109.2 million for the second quarter of fiscal year 2016, nearly tripling the income of $36.6 million for the second quarter of fiscal year 2016. Net income for the first six months of the fiscal year was also up dramatically, going from $64.3 million to $252.3 million.
The periods ended on November 28.
Net sales for the second quarter of fiscal 2016 were $546.0 million, a 44.2 percent increase compared with net sales of $378.6 million for the second quarter of fiscal 2015.  For the first six months of fiscal 2016, net sales were $1,155.9 million compared with net sales of $735.6 million for the prior-year period.
The net income per share numbers for the second quarter and year to date periods for fiscal 2016 and fiscal 2015 reflect the two-for-one stock split for shares of the company’s common stock and Class A common stock, effective October 31, 2014.
Dolph Baker, chairman, president and CEO of Cal-Maine Foods, stated, “Our financial and operating results for the second quarter of fiscal 2016 reflect another very strong performance for Cal-Maine Foods. For the second quarter, overall sales were up 44.2 percent over the same period last year, and were up 57.1 percent through the first half of this fiscal year. This impressive growth is primarily due to higher average selling prices and a modest increase in volumes compared with the same periods a year ago. While egg prices were still at much higher than normal levels at the beginning of our second quarter, they dropped considerably in October before moving back up due to higher demand related to the Thanksgiving holiday. Even with this volatile behavior during the second quarter, our average selling prices for shell eggs were up 42.9 percent compared with the same period a year ago, however, they were down 12.2 percent on a sequential basis compared with the first quarter of fiscal 2016. Egg prices have declined since the end of the second quarter.
“Our industry continues to deal with the significant 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. While the supply is gradually starting to move back up, the current national laying hen flock reported by the USDA yesterday is still approximately nine percent lower than it was a year ago. Egg prices have moved lower than expected in spite of the reduced supply, and we expect prices will remain volatile until the industry has more clarity on future supply levels.”
Baker notes that while there have been no further reported U.S. outbreaks of highly pathogenic AI, the company continues to closely monitor the situation, and is are working with egg industry associations and government officials to identify ways to mitigate the risk of future outbreaks.
To date, there have been no positive tests for AI at any of the Cal-Maine Foods locations; however, the company has strengthened our biosecurity measures at all of its facilities.