Cal-Maine Foods Q2 profit suffers big drop

Cal-Maine Foods Inc. fiscal second-quarter earnings fell 41% as revenue, margins and average selling price dropped.

As more people cook at home, the company posted poor sales to restaurants and food-service customers, outweighing better performance in retail sales.

Both feed costs and selling prices fell year-on-year. But compared with the first quarter, feed costs dropped slightly while selling prices rose significantly, improving profitability.

Chairman and CEO Fred Adams Jr. said feed costs would likely be volatile but supply was well balanced with demand and the balance will remain favourable.

Gross margin fell to 20.4% from 24.3%. Net average selling price fell 13% to US$1.06 per dozen of eggs in the quarter, while feed costs dropped 9.9% to 35 cents.