Cal-Maine Foods Q2 Earnings Call Highlights

Cal-Maine Foods (NASDAQ:CALM) executives used the company’s fiscal second quarter 2026 earnings call to emphasize an improving mix shift toward specialty eggs and prepared foods, even as lower egg prices weighed on year-over-year results.

President and CEO Sherman Miller said the company “built real momentum” through the second quarter and first half of the year, delivering what he described as solid results against a difficult comparison period that featured supply-demand imbalances and historically high egg prices. Miller argued Cal-Maine’s increasingly diversified business model—especially specialty eggs and prepared foods—has added resilience as egg prices normalized.

Sales mix shifts toward specialty eggs and prepared foods

Management highlighted continued changes in Cal-Maine’s revenue mix as a core element of its long-term strategy, stating the shift should improve the durability and predictability of earnings over time.

• Second quarter fiscal 2026: Shell egg sales were 84.4% of total net sales, down from 94.7% a year ago. Specialty eggs accounted for 44% of total shell egg sales, up from 31.7%. Specialty eggs and prepared foods combined represented 46.4% of net sales, up from 31.2%.
• First half fiscal 2026: Shell egg sales were 85% of net sales versus 94.5% in the prior-year period. Specialty eggs represented 39.6% of total shell egg sales versus 33%. Specialty eggs and prepared foods combined accounted for 42.8% of net sales versus 32.4%.

Miller said consumers are “trading up” in eggs, pointing to demand for convenience and interest in specialty and premium segments aligned with wellness, taste, simplicity, and clean labels. He also cited category tailwinds such as eggs being an affordable protein, increased interest in ready-to-eat and ready-to-heat formats, and consumption patterns influenced by GLP-1 users gravitating toward nutrient-dense foods.

Quarterly results reflect lower egg prices and Echo Lake contribution

Chief Financial Officer Max Bowman reported second quarter fiscal 2026 net sales of $769.5 million, down 19.4% from $954.7 million in the comparable quarter of fiscal 2025.

Shell egg sales declined 28.1% to $649.6 million, driven by 26.5% lower selling prices and 2.2% lower sales volumes. Conventional egg sales fell 41% to $363.9 million, reflecting 38.8% lower selling prices and 3.6% lower volumes. Specialty egg sales were essentially flat year over year at $285.7 million, down 0.4%, with Bowman describing volume and selling prices as relatively flat.

Prepared foods sales rose to $71.7 million from $10.4 million a year earlier, reflecting the impact of the Echo Lake Foods acquisition. Compared with the first quarter of fiscal 2026, prepared foods sales declined 14.5% from $83.9 million; Echo Lake contributed $56.6 million in second quarter sales versus $70.5 million in the first quarter. Management attributed the sequential decline in part to initiatives underway to expand and optimize the prepared foods platform.

Gross profit was $207.4 million, down 41.8% year over year, primarily due to lower shell egg selling prices and volumes, partially offset by lower outside egg purchase costs, a 3% increase in percent produced-to-sold, and prepared foods contributions. Operating income fell 55.5% to $123.9 million, with a 16.1% operating margin. Net income attributable to Cal-Maine Foods was $102.8 million, down 53.1%, and diluted EPS was $2.13 compared with $4.47.

Prepared foods expansion projects, near-term disruption, and margin targets

Miller outlined multiple capital projects designed to expand Cal-Maine’s prepared foods capabilities following the Echo Lake acquisition. He said the company has launched a $15 million network optimization and capacity expansion project expected to add $17 million of annual scrambled egg production by mid-fiscal 2027. The effort is intended to consolidate scrambled egg manufacturing into a single modernized facility, add a new production line, and increase automation to improve yields, reduce labor requirements, and increase throughput.

The company also reiterated its previously announced $14.8 million high-speed pancake line expected to add $12 million in capacity through early fiscal 2027. In addition, management said the Crepini joint venture is investing $7 million through fiscal 2028 to add $18 million of capacity, expanding production more than seven-fold. Combined, Cal-Maine expects prepared foods capacity (Echo Lake plus Crepini) to increase more than 30% over the next 18 to 24 months.

Executives cautioned that Echo Lake will experience temporary lower volumes and higher costs as projects ramp, beginning late in the second quarter and continuing through the remainder of fiscal 2026. In Q&A, management said prepared foods results would likely show further pullback in the third quarter as changes continue, with growth beginning to emerge in the fourth quarter and building over the following 12 months.

On profitability, management reiterated its expectations for prepared foods. Responding to a question about segment margin pressure, Miller said the company initially guided to a 19% EBITDA margin for Echo Lake and still believes it holds for the full year, though he noted some “slippage” in the second quarter and potential additional slippage in the next quarter.

Specialty eggs capacity and Clean Egg acquisition

Cal-Maine also discussed efforts to expand specialty egg supply. Miller said the company acquired certain production assets of Clean Egg LLC in Texas during the quarter, describing the transaction as expanding specialty cage-free and free-range capacity and supporting local sourcing and supply chain optimization.

In Q&A, Miller provided additional detail on Clean Egg, calling it “small but very timely” and stating it includes 677,000 brown cage-free and free-range layers and pullets. He said management sees specialty eggs continuing to grow and suggested that over the longer term specialty eggs could represent more than 50% of total shell egg net sales.

Management also addressed why specialty egg volumes were flat year over year in the quarter, citing a difficult comparison to fiscal 2025 when conventional eggs were extremely tight and demand shifted into specialty. Executives said free-range and pasture-raised posted double-digit growth in dollars and dozens, though the company does not formally break out subcategories.

Capital allocation: buybacks, dividend, and balance sheet

Bowman said Cal-Maine ended the quarter with $1.1 billion in cash and temporary cash investments and remained “virtually debt-free.” Net cash provided by operations was $94.8 million in the quarter, down from $122.7 million a year earlier.

During the quarter, the company repurchased 846,037 shares for $74.8 million under its $500 million authorization; $375.2 million remained available. Cal-Maine also declared a variable dividend of approximately $0.72 per share for the second quarter, payable Feb. 12, 2026, to shareholders of record on Jan. 28, 2026, with the final per-share amount based on shares outstanding on the record date.

Looking ahead, management reiterated its focus on disciplined execution, scaling specialty eggs and prepared foods, and using hybrid pricing structures and diversification to improve mid-cycle performance, while noting it does not provide specific earnings guidance.

About Cal-Maine Foods (NASDAQ:CALM)

Cal-Maine Foods, Inc, together with its subsidiaries, produces, grades, packages, markets, and distributes shell eggs. The company offers specialty shell eggs, such as nutritionally enhanced, cage free, organic, free-range, pasture-raised, and brown eggs under the Egg-Land's Best, Land O' Lakes, Farmhouse Eggs, Sunups, Sunny Meadow, and 4Grain brand names. It sells its products to various customers, including national and regional grocery store chains, club stores, independent supermarkets, foodservice distributors, and egg product consumers primarily in the southwestern, southeastern, mid-western, and mid-Atlantic regions of the United States.