Retail Stock to Watch: Cal-Maine Foods Inc (NASDAQ: CALM)

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Cal-Maine Foods Inc (NASDAQ: CALM) stock lost over 2.2% on 29th September, 2020 (as of 12:16 pm GMT-4; Source: Google finance) after the company reported a net loss of $19.4 million in the first quarter to Aug. 29, after a loss of $45.8 million, in the year-earlier period. The company will not pay a dividend for the quarter. As of August 29, 2020, the amount of cumulative losses to be recovered before payment of a dividend was $20.8 million.

For the first quarter of fiscal 2021, there has been 3.8% increase in the total dozens sold over the same period last year, mainly due to continued strong retail demand as consumers are still preparing more meals at home. While demand from food service customers is recovering as many restaurants have resumed limited service, food service demand is still well below pre-quarantine levels, which the company considers that it has constrained the price of shell eggs in the retail market. The average sales price was rose 17.8% compared to the prior year first quarter, which was a period of record low prices and an oversupply of eggs.

Moreover, for the first quarter of fiscal 2021, the sales of specialty eggs were of total $129.2 million, forms 45.2% of the egg sales revenue, compared with $111.2 million, or 47.5% of egg sales revenue, in the first quarter of fiscal 2020. The higher specialty egg revenue is on back of a 15.5% increase in specialty dozens sold and a $0.011 increase in net average selling price per dozen in the first quarter of fiscal 2021 as compared to the same period in fiscal 2020. The demand for specialty eggs was positively affected by the higher conventional egg prices as compared to the same period in the prior year

CALM in the first quarter of FY 21 has reported the adjusted loss per share of 40 cents, beating the analysts’ estimates for the adjusted loss per share of 53 cents, according to the FactSet consensus. The company had reported the adjusted revenue of $292.8 million in the first quarter of FY 21, beating the analysts’ estimates for revenue of $284 million.

In addition, the company’s farm production costs per dozen produced for the first quarter of fiscal 2021 fell 4.3%, or $0.032 per dozen, compared to the first quarter of fiscal 2020. This is driven by lower feed costs and lower amortization costs due to selling flocks early in fiscal 2020 in response to market conditions.

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