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SEC filingQ3 FY2026 results reflected sharp declines in revenue to $667.0M (-53.0%) and profitability, driven by lower shell egg selling prices partially offset by reduced outside egg purchases and higher production-to-sold ratio amid Echo Lake acquisition synergies.
Cal-Maine Foods reported Q3 FY2026 results marked by significant year-over-year declines across key profitability metrics, primarily attributable to lower net average selling prices for shell eggs. Revenue fell 53.0% to $667.0 million from $1.4 billion in the prior-year quarter, as the pricing downturn outpaced gains from increased sales volume. This volume growth stemmed from the first-quarter acquisition of Echo Lake Foods and a substantial ramp-up at Crepini, which together bolstered shell egg and specialty product output despite market headwinds.
Gross profit plunged 83.3% to $119.3 million, yielding a 17.9% margin compared to much higher prior-year levels, due to the disproportionate impact of price declines relative to cost savings. These savings arose from lower prices and volumes of outside egg purchases, coupled with an improved production-to-sold ratio that enhanced internal supply efficiency. Operating income contracted 94.3% to $35.9 million (5.4% margin), underscoring the cyclical nature of the egg industry where pricing volatility directly pressures bottom-line results.
Net income totaled $50.5 million, down 90.1% from $508.5 million, with diluted EPS at $1.06 versus $10.38, reflecting the broader profitability compression. Despite these challenges, cash generation proved resilient: net cash from operating activities reached $476.9 million, funding $123.7 million in capital expenditures—a modest increase from prior year—and yielding $353.2 million in free cash flow. This liquidity supports ongoing investments in strategic growth areas.
Management highlighted material cash requirements for operations, including feed ingredients, processing, packaging, employee costs, and maintenance capex, alongside growth initiatives. Capital spending focused on construction projects to expand prepared foods and cage-free shell egg production capacity. The Echo Lake acquisition added critical assets, including brown cage-free and free-range layers and pullets, plus processing and contract production equipment, positioning the company to meet rising customer demands for cage-free products.