- **Record Q1 Growth**: 17.4% net sales increase to $922.6 million, with prepared foods sales surging 800%.
- **Specialty Egg Dominance**: 30% of sales from specialty eggs, with double-digit growth in cage-free and pasture-raised.
- **Echo Lake Success**: Exceeding acquisition targets, with $70.5 million in Q1 sales and $14.8 million investment in new capacity.
- **HPAI Risk**: 3.1 million hens lost in Q1, with ongoing migration risks.
- **Financial Strength**: $278.6 million operating cash flow, debt-free balance sheet, and $1.37/share dividend.

**【CEO Summary Section】**
- Cal-Maine reported a 17.4% year-over-year increase in net sales to $922.6 million, driven by specialty eggs (10% growth) and prepared foods (800% growth, including Echo Lake Foods). Specialty and prepared foods now account for nearly 49% of net sales.
- Emphasized the company's vertical integration, biosecurity investments ($80+ million since 2015), and strategic acquisitions (e.g., Echo Lake Foods) as key growth drivers.
- Announced a $14.8 million investment in a new pancake production line to expand prepared foods capacity.
- Highlighted consumer demand trends: 97% of U.S. households purchase eggs, and eggs are the lowest-cost protein source.

**【CFO Financial Commentary】**
- Gross profit rose 26% to $311.3 million (33.7% of net sales), driven by higher shell egg prices, specialty egg volume growth, and lower feed costs (4% YoY decline).
- Operating income increased 33% to $249.2 million (27% of net sales), with net income up 33% to $199.3 million ($4.12 EPS).
- Operating cash flow doubled to $278.6 million, with $252 million in cash and $1 billion in investments, maintaining a debt-free balance sheet.
- Capital allocation priorities: dividends ($1.37/share), share buybacks (opportunistic), M&A (e.g., prepared foods), and margin expansion.

**【Q&A Highlights】**
- **Pricing Strategy**: Shift to cost-plus contracts (vs. market-based) reduces volatility but risks upside capture. 85.6% of shell egg sales remain market-priced.
- **Echo Lake Performance**: Exceeding acquisition expectations, with $70.5 million in Q1 sales and $15 million+ synergies realized. New pancake line to add 10% capacity.
- **Supply Challenges**: Layer flock at 301.4 million (vs. 325 million target), with HPAI risks persisting. 3.1 million hens lost in Q1 due to outbreaks.
- **Specialty Eggs Growth**: Cage-free and pasture-raised volumes up double digits, with Egg-Land’s Best sales accounting for 50% of specialty egg production.
- **Share Buybacks**: $50 million used so far under $200 million authorization; approach is opportunistic, prioritizing M&A and organic growth.
- **Consumer Trends**: Eggs outperforming other proteins on affordability and health benefits (e.g., FDA approval for 'healthy' labeling).

Cal-Maine Foods, Inc. (CALM) Q1 2026 Earnings Call Transcript

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CALM

CALM fundamentals

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