Shares of producer and distributor of shell eggs, Cal-Maine Foods (CALM), gained 4% in the after-market trading session following the release of strong second-quarter Fiscal 2025 results. The company’s impressive performance is primarily due to robust demand for shell eggs and higher market prices.
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During the quarter, earnings per share increased to $4.47 from $0.35 per share reported in the prior year period. Also, it surpassed estimates of $4.05. Moreover, revenue jumped 82.5% to $954.7 million and beat expectations of $689.25 million.
Key Factors Supporting CALM’s Performance
The company noted that robust demand for shell eggs, particularly during the Thanksgiving season, aided its performance. Overall, shell egg sales increased by 14.5% year-over-year, and prices for conventional shell eggs jumped to $2.74 per dozen compared to $1.73 in the prior-year quarter.
Also, sales of specialty eggs, such as cage-free eggs, rose 25% year-over-year and accounted for a major portion of total revenue.
In addition, Cal-Maine’s Q2 profits were supported by lower farm production costs per dozen, primarily due to favorable commodity pricing for feed ingredients.
Cal-Maine to Boost Production Capacity
To capitalize on the strong demand, Cal-Maine is making efforts to expand its production capacity. The company is investing $60 million in five new cage-free layer houses and two pullet houses in Florida, Georgia, Utah, and Texas. This is expected to add capacity for about 1.1 million cage-free layer hens by late summer 2025.
Also, it is investing $15 million to expand its egg products processing facility in Blackshear, Georgia.
Is CALM a Good Stock?
Shares of Cal-Maine have gained 20% in the past three months. The company’s efforts to expand its operations and invest in strategic projects to increase its production capacity keep it well poised for further growth.
On the one-day time frame, CALM stock is a Buy, according to TipRanks’ easy-to-read technical summary signals. This is based on 14 Bullish, five Neutral, and three Bearish signals.
