Cal-Maine Foods (NASDAQ:CALM) beat the Street on Tuesday by posting a 53% leap in fiscal second-quarter profits as the parent of Eggland’s Best and Farmhouse eggs benefited from higher prices and strong sales around the holidays.
The Jackson, Miss.-based food company said it earned $23.3 million, or 97 cents a share, last quarter, compared with a profit of $15.2 million, or 63 cents a share, a year earlier. Analysts had called for EPS of just 89 cents.
Revenue climbed 24% to $290.4 million, while gross margins expanded to 21.2% from 19.3%.
“Our higher sales reflect strong seasonal retail demand for eggs as well as higher average selling prices,” CEO Dolph Baker said in a statement. “We typically sell more eggs around the holidays and demand has been very good this fall with total dozen eggs sold up six percent compared with the same period last year.”
Cal-Maine Foods, which is the largest producer and distributor of fresh shell eggs in the U.S., said feed costs were up 20% year-over-year last quarter, leading it to hike its prices. Baker said he expects feed costs to be “high and volatile” for the rest of the fiscal year.
“Prices for corn and soybean meal, our primary feed ingredients, have continued to escalate this fiscal year,” Baker said. “However, we are pleased with the efficiency of our operations and our ability to absorb these higher costs and improve our profitability for the quarter.”
Shareholders cheered the earnings beat, bidding shares of Cal-Maine Foods 5.29% higher to $36.00.