April 16, 2025

Cal-Maine Foods saw falling shares following revelation of investigation by US Department of Justice

 

Shares of Cal-Maine Foods, the largest US egg producer, fell in after-hours trading on April 8 after the company acknowledged it is being investigated by the antitrust division of the US Department of Justice.

 

Ridgeland, Mississippi, US-based Cal-Maine said it received notice of the investigation into egg price increases last month. Cal-Maine said it is cooperating with the investigation.

 

The company's shares fell more than 4% in after-hours trading.

 

Egg prices have hit record highs in recent months, largely due to a bird flu epidemic that has forced farmers to slaughter more than 166 million birds, mostly egg-laying chickens.

 

One dozen Grade A eggs cost an average of US$5.90 in US cities in February, up 10.4% from a year ago. That eclipsed January's record-high price of $4.95.

 

The egg price increases have put Cal-Maine, which provides around 20% of the US' eggs, under increased scrutiny.

 

On April 8, Cal-Maine said its sales nearly doubled to US$1.42 billion in its fiscal third quarter, which ended March 1. The company said that was primarily due to higher egg prices, which averaged US$4.06 per dozen during the quarter, up from US$2.25 per dozen a year ago.

 

Cal-Maine's sales fell short of Wall Street's forecast of US$1.43 billion, according to analysts polled by FactSet.

 

Cal-Maine said it sold a record 331.4 million dozen-eggs in the third quarter, a 10% increase from the same period a year ago.

 

Cal-Maine said it made progress on mitigating the effects of bird flu, including increasing the number of layer hens and chicks hatched and recovering from the flu-related closure of facilities in Texas and Kansas. The company said its feed costs were also down during the quarter.

 

Cal-Maine said its third quarter net income more than tripled to US$508.5 million compared to the same period a year ago. The profit, of US$10.38 per share, also fell short of analysts' forecast of a US$10.72 per-share profit.

 

- AP