By Jack Weatherly
Cal-Maine Foods Inc. reported on Monday a net loss of $45.8 million, or 94 cents per share, for the first fiscal quarter ending Aug. 31, compared with net sales of $241.2 million, a 29.2 percent decrease from $340.6 million a year earlier.
An oversupply of eggs, which began to affect the market in early 2018 has continued. The most recent USDA report showed 331.4 million laying hens in the U.S. market as of Sept. 1, which was approximately 800,000 more hens than a year ago, according to the Jackson-based firm, the largest producer of shell eggs in the country.
“Our average sales price was down 30 percent for the first quarter compared to the same period last year,” Dolph Baker, chairman and chief executive of Cal-Maine, said in a release. The net average price of a dozen was 91.5 cents, compared with $1.31 percent a year earlier.
“While our sales volumes were up 1.7 percent over the first quarter last year, the extreme drop in market prices adversely affected our results,” Baker said.
Cal-Maine shares dropped $5.46, or 12.03 percent, on the NasdaqGS market, closing at $39.96.
Its shares have ranged from $36.65 to $50.69 in the past 52 weeks.
Cal-Maine did not pay a cash dividend for the quarter.
“As we move forward in fiscal 2020, we will focus on the aspects of our business we can control, regardless of market prices and challenging conditions,” added Baker.
Specialty eggs comprised 22.2 percent of the eggs produced by Cal-Maine in the quarter, but 44.9 percent of total revenue.
“We remain committed to offering a favorable product mix that meets the changing demands of our customers,” Baker said.
“As a result of California Proposition 12 and other industry changes, we are preparing for the expected higher demand for cage-free eggs. Throughout the first quarter, we have made considerable progress with our expansion plans designed to increase our cage-free capacity.”
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