CAL-MAINE FOODS INC

The company operates in the U.S. shell egg and egg-based food industry. According to the USDA Agricultural Marketing Service, in 2025 approximately 69% of table eggs produced in the U.S. were sold as shell eggs, with 55% of such shell eggs sold through food-at-home outlets such as grocery and convenience stores, 12% sold to food-away-from-home channels such as restaurants, and 2% exported. The USDA estimated that in 2025 approximately 31% of eggs produced in the U.S. were sold as egg products. For fiscal 2026, shell egg household penetration was approximately 97%. According to the USDA’s Economic Research Service, estimated annual per capita consumption in the U.S. between 2021 and 2025 varied, ranging from 260 to 286 eggs. The most significant shift in demand over the past decade has been among specialty shell eggs, particularly cage-free eggs. The industry has been greatly impacted by several outbreaks of HPAI in recent years. In 2024 and 2025, 40.2 million and 45.2 million commercial layer hens and pullets were depopulated due to HPAI, respectively. To date in 2026, through July 20, 2026, 19.2 million layer hens and pullets have been depopulated due to HPAI.

The company is the largest egg company in the United States and a leading player in the egg-based food industry. The branded portfolio includes Eggland’s Best®, Land O’Lakes®, Farmhouse Eggs®, 4Grain®, Sunups®, Van’s®, MeadowCreek Foods®, and Crepini®. In 2025, EB was the third best-selling dairy brand in the U.S. By volume, the top two best-selling branded specialty shell egg SKUs in 2025 were EB branded eggs and six out of 10 best-selling SKUs were EB branded eggs. In 2025, the company's sales (including sales from affiliates) represented approximately 56% of EB branded eggs and 43% of Land O’ Lakes® branded eggs nationwide. The company's top three customers accounted for an aggregate of 43.1%, 49.2% and 49.0% of net sales dollars for fiscal 2026, 2025, and 2024, respectively. The largest customer, Walmart Inc. (including Sam's Club), accounted for 30.0%, 33.6% and 34.0% of consolidated net sales dollars for fiscal 2026, 2025 and 2024, respectively. The shell egg production industry remains highly competitive, with competition generally based on price, service and product quality.

The company generates revenue through the production, grading, packaging, marketing, and distribution of shell eggs and prepared foods. The shell egg portfolio spans conventional to specialty eggs, including cage-free, nutritionally enhanced, organic, brown, pasture-raised, and free-range eggs, serving both retail and foodservice customers nationwide. The prepared foods sector offers pre-cooked egg patties, omelets, folded and scrambled egg formats, hard-cooked eggs, pancakes, waffles, and specialty wraps. The company sells most of its products throughout much of the U.S. and aims to maintain efficient, state-of-the-art operations located close to its customers. The majority of shell egg and prepared foods sales are based on the daily or short-term needs of customers. Most sales to established accounts are on payment terms ranging from seven to 30 days. Although the company has established long-term arrangements with many customers, most of them are free to acquire products from other sources.

The Conventional Shell Eggs segment consists primarily of the production, grading, packaging, marketing and distribution of shell eggs sold as conventional shell eggs, which includes the brands Sunups® and Sunny Meadow®. The Specialty Shell Eggs segment consists primarily of the production, grading, packaging, marketing and distribution of shell eggs sold as cage-free, nutritionally enhanced, organic, brown, pasture-raised and free-range eggs, and includes the brands Farmhouse Eggs® and 4Grain® as well as branded products from the cooperative membership in Eggland’s Best, Inc. which includes Egg-Land’s Best® and Land O’ Lakes® branded eggs. The Prepared Foods segment consists primarily of the production, packaging, marketing and distribution of prepared foods product offerings such as pre-cooked egg patties, omelets, folded and scrambled egg formats, pancakes, waffles and specialty wraps, and includes the brands Van’s® and Crepini®. The remaining operations, which include co-pack shell eggs, egg products, hard-cooked eggs and other business activities, are not reportable segments.

The company is a member of the Eggland’s Best, Inc. cooperative and produces, markets, distributes and sells Egg-Land’s Best® and Land O’ Lakes® branded eggs under a license from EB at its facilities under EB guidelines. EB hens are fed a proprietary diet and offerings include nutritionally enhanced, cage-free, organic, pasture-raised and free-range eggs. Land O’ Lakes® branded eggs are produced by hens that are fed a whole-grain vegetarian diet and include brown, organic and cage-free eggs. Farmhouse Eggs® branded eggs are produced at company facilities by hens that are provided with a vegetarian diet, with offerings including cage-free, organic and pasture raised eggs. The company markets organic, vegetarian and omega-3 eggs under the 4Grain® brand, which consists of conventional and cage-free eggs. Sunups® and Sunny Meadow® brands are sold as conventional shell eggs. The company also produces, markets and distributes private label specialty and conventional shell eggs to several customers. Prepared foods offerings include products sold under the brands Van’s® and Crepini®.

Effective May 12, 2026, the company acquired certain assets of the Van’s Foods business of Sara Lee Frozen Bakery, LLC for approximately $24.8 million ¹. Effective March 2, 2026, the company acquired the shell egg, egg products, and prepared foods assets of Creighton Brothers LLC, including Crystal Lake LLC, for approximately $129.3 million ². The acquired assets include commercial shell egg production and grading with capacity of approximately 3.2 million layers ³, including 500 thousand cage-free layers ⁴, and 865 thousand pullets ⁵, a feed mill, and 1,007 acres of land ⁶. Effective October 10, 2025, the company acquired certain assets of Clean Egg, LLC for approximately $23.7 million ⁷, which included 677 thousand brown cage-free and free-range layers and pullets ⁸. Effective June 2, 2025, the company acquired Echo Lake Foods, LLC and certain related companies for approximately $289.5 million ⁹. During the third quarter of fiscal 2025, the company acquired certain assets of Deal-Rite Foods, Inc. and certain of its affiliates. During the second quarter of fiscal 2025, the company completed a strategic investment with Crepini LLC, capitalizing Crepini with approximately $6.75 million ¹⁰ in cash in exchange for a 51% interest ¹¹ in the new venture. During the second quarter of fiscal 2025, the company acquired the remaining ownership interests in MeadowCreek Foods, LLC and it became a wholly-owned subsidiary. During the first quarter of fiscal 2025, the company acquired substantially all the commercial shell egg production, processing and egg products breaking assets of ISE America, Inc. and certain of its affiliates, with capacity at the time of acquisition of approximately 4.7 million laying hens ¹², including 1.0 million cage-free ¹³, 1.2 million pullets ¹⁴, feed mills, approximately 4,000 acres of land ¹⁵, inventories and an egg products breaking facility. The company has invested more than $92 million ¹⁶ in biosecurity technology, equipment, supplies, procedures, and training across its locations since the major HPAI outbreak in 2015. On March 14, 2026, the company experienced an HPAI outbreak within its pullet facility in Maryland, resulting in the depopulation of approximately 352,000 pullets ¹⁷.

For fiscal 2026, net sales were $3,970.7 million ¹⁸ compared to $3,726.9 million ¹⁹ in fiscal 2025. Gross profit was $1,027.5 million ²⁰ in fiscal 2026 compared to $1,009.0 million ²¹ in fiscal 2025. Net income for fiscal 2026 was $573.8 million ²² compared to $579.0 million ²³ in fiscal 2025. Diluted earnings per common share was $11.62 ²⁴ in fiscal 2026 compared to $11.87 ²⁵ in fiscal 2025. Cash flows from operating activities were $1,009.1 million ²⁶ in fiscal 2026 compared to $1,006.1 million ²⁷ in fiscal 2025.

The company currently has multiple expansion initiatives underway for its Prepared Foods segment. At Echo Lakes Foods facilities, the company has a network optimization and capacity expansion project underway, which is expected to add 17 million pounds ²⁸ of annual scrambled egg production by mid-to-late-fiscal 2027, as well as a high-speed pancake line project, which is expected to add an additional 12 million pounds ²⁹ of annual production through early-to-mid-fiscal 2027. In addition, the company’s joint venture, Crepini Foods, is investing in new equipment and line installations that is expected to add 18 million pounds ³⁰ of additional production capacity gradually over the next 12 to 18 months with expected completion by early-to-mid fiscal 2028. In total, these planned investments are expected to grow Cal-Maine’s prepared foods production capacity by more than 30 percent ³¹ from mid-2027 through 2028.

The company's long-term growth strategy is focused on building a diversified egg-based food platform that extends beyond conventional shell eggs and enhances the company’s earnings profile and resilience across market cycles. Growth initiatives include increasing the proportion of specialty shell eggs in its sales mix, expanding its prepared foods and egg products businesses, strengthening and extending its portfolio of branded offerings, and pursuing strategic acquisitions and organic investments that complement its existing capabilities. Within its conventional shell egg business, the company employs a balanced pricing strategy that combines market-based and structured pricing arrangements intended to participate in favorable pricing environments while enhancing earnings visibility and cash flow stability over time. The company also continues to invest in biosecurity, productivity initiatives, and vertical integration to reinforce cost leadership and supply reliability and seeks to expand its geographic presence and customer penetration through disciplined capital allocation and investments that enhance its production, distribution, and commercial capabilities.

The company's growth initiatives include increasing the proportion of specialty shell eggs in its sales mix. Ten states in the U.S. have passed legislation or regulations mandating minimum space or cage-free requirements for egg production or mandated the sale of only cage-free eggs and egg products in their states, with implementation of these laws ranging from January 2022 to January 2030, representing approximately 27% ³² of the total U.S. population according to the 2020 U.S. Census. California, Massachusetts, Colorado, Michigan, Oregon, Washington, and Nevada, which collectively represent approximately 23% ³³ of the total U.S. population, have cage-free legislation in effect. A significant number of customers have announced goals to either exclusively offer cage-free eggs or significantly increase the volume of cage-free egg sales in the future. The company is focused on adjusting its cage-free production capacity with the goal of meeting the future needs of its customers in light of changing state requirements and customers’ goals.

The company's annual feed requirements for fiscal 2026 were 2.2 million tons ³⁴ of finished feed, of which the company manufactured 2.1 million tons ³⁵. The company currently has the capacity to store 242 thousand tons ³⁶ of corn and soybean meal. The company's primary feed ingredients, corn and soybean meal, are commodities that are subject to volatile price changes due to weather, various supply and demand factors, transportation and storage costs, speculators, and agricultural, energy and trade policies in the U.S. and internationally, and global instability that could disrupt the supply chain. The company purchases the vast majority of its corn and soybean meal from U.S. sources but may be forced to purchase internationally when U.S. supplies are not readily available. Feed grains are currently available from an adequate number of sources in the U.S.

The company's percentage of dozens produced to sold was 92.1% ³⁷ of total shell eggs sold in fiscal 2026. In fiscal 2026, 90.0% ³⁸ of production came from Company-owned facilities, and 10.0% ³⁹ came from contract producers. The majority of contract production is with family-owned farms for organic, pasture-raised and free-range eggs. The company's egg inventory averaged six days ⁴⁰ of sales during fiscal 2026. As of May 30, 2026, every Company-owned processing plant was SQF certified. The company supplies the majority of its chicks from its breeder farms and hatches them in its hatcheries in a computer-controlled environment and obtains the balance from commercial sources.The company's long-term growth strategy is focused on building a diversified egg-based food platform that extends beyond conventional shell eggs and enhances the company’s earnings profile and resilience across market cycles. The company intends to leverage its market position, vertically integrated operations, strong balance sheet, and longstanding customer relationships to pursue opportunities that drive sustainable growth, expand margins, and diversify its revenue streams. The company also continues to invest in biosecurity, productivity initiatives, and vertical integration to reinforce cost leadership and supply reliability.

Wholesale shell egg sales prices are a critical component of revenue for the company. Wholesale shell egg prices are volatile, cyclical, and impacted by a number of factors, including consumer demand, seasonal fluctuations, the number and productivity of laying hens in the U.S. and outbreaks of agricultural diseases such as HPAI. The extent of possible future outbreaks among U.S. commercial egg layer flocks, with heightened risk during migration seasons, cannot be predicted. The company's primary feed ingredients, corn and soybean meal, are commodities that are subject to volatile price changes due to weather, various supply and demand factors, transportation and storage costs, speculators, and agricultural, energy and trade policies in the U.S. and internationally, and global instability that could disrupt the supply chain.

The company faces material risks from HPAI outbreaks, which have significantly impacted the industry. In 2024 and 2025, 40.2 million and 45.2 million commercial layer hens and pullets were depopulated due to HPAI, respectively, and to date in 2026 through July 20, 2026, 19.2 million layer hens and pullets have been depopulated. On March 14, 2026, the company experienced an HPAI outbreak within its pullet facility in Maryland, resulting in the depopulation of approximately 352,000 pullets . Wholesale shell egg prices are volatile and cyclical, impacted by consumer demand, seasonal fluctuations, the number and productivity of laying hens, and disease outbreaks. Feed costs, primarily corn and soybean meal, are a primary cost component and are subject to volatile price changes due to weather, supply and demand factors, transportation and storage costs, and agricultural and trade policies. The company's annual feed requirements for fiscal 2026 were 2.2 million tons of finished feed. Customer concentration is a significant risk, as the top three customers accounted for 43.1% ⁴¹ of net sales in fiscal 2026, with Walmart Inc. alone accounting for 30.0% ⁴² of consolidated net sales. The company also faces risks related to the integration of recent acquisitions, including Echo Lake Foods for $289.5 million and Creighton Brothers for $129.3 million , and the ability to realize expected benefits such as synergies, cost savings, and margin expansion.

Management's message emphasizes the company's position as the largest egg company in the United States and a leading player in the egg-based food industry, with a vision to ensure that healthy, affordable eggs and egg-based food choices are accessible to every household, every day. The long-term growth strategy is focused on building a diversified egg-based food platform that extends beyond conventional shell eggs and enhances the company’s earnings profile and resilience across market cycles. Management believes that the combination of conventional and specialty shell eggs, prepared foods, egg products, and branded offerings creates a more balanced and diversified business model that is better positioned to serve evolving consumer preferences and customer needs. Through these initiatives, the company seeks to increase its normalized earnings power and create long-term value for its customers and shareholders. The company has invested more than $92 million in biosecurity technology, equipment, supplies, procedures, and training across its locations since the major HPAI outbreak in 2015.