Executive Summary

Net sales rose 21.4% year over year to $292.8M, with diluted EPS at -$0.40 improving from -$0.94; retail demand drove a 3.8% increase in dozens sold while food service demand remained below pre-quarantine levels, constraining retail pricing .
Quarter-over-quarter normalization from Easter-related Q4 strength led to a sequential revenue decline (Q4 FY20 net sales were $453.3M) as market prices decreased overall from late fiscal 2020 peaks; Southeast large market price averaged $0.95/dozen vs. $1.71 in Q4 FY20 and $0.84 in Q1 FY20 .
Specialty egg revenue was $129.2M (45.2% of egg sales revenue) with specialty dozens sold up 15.5% YoY; average sales price rose 17.8% YoY from a period of record low prices and oversupply .
No dividend this quarter per variable dividend policy given the net loss; cumulative losses to be recovered before dividends total $20.8M as of August 29, 2020 .
Catalyst watch: USDA hen numbers fell 15.1M YoY and hatch rates declined, pointing to tightening supply and potential price support as food service demand normalizes (management expects overall demand to improve) .

What Went Well and What Went Wrong

What Went Well
- Strong retail demand lifted total dozens sold +3.8% YoY; management highlighted consumers preparing more meals at home and resilient operations during COVID-19 (“we are proud of their dedicated efforts to contribute to a stable food supply”) .
- Average sales price up 17.8% YoY; Southeast large market price up 13.1% YoY to $0.95/dozen, marking recovery from record lows and oversupply conditions in the prior-year quarter .
- Farm production cost per dozen fell 4.3% (down $0.032/dozen), driven by lower feed and amortization costs following early flock disposals; USDA reports favorable corn and soybean supplies .
What Went Wrong
- Sequential step-down vs Q4 FY20’s exceptional pricing/Easter demand: net sales fell from $453.3M in Q4 FY20 to $292.8M in Q1 FY21; market prices decreased overall compared to the end of fiscal 2020 .
- Operating loss of -$27.2M and net loss of -$19.4M persisted, albeit improved YoY from -$63.5M and -$45.8M respectively .
- Food service demand remained well below pre-quarantine levels, constraining retail market prices despite improving restaurant activity .

Financial Results

Quarterly trend (oldest → newest):

Metric	Q3 FY2020	Q4 FY2020	Q1 FY2021
Net Sales ($MM)	$345.6	$453.3	$292.8
Gross Profit ($MM)	$49.8	$121.5	$16.8
Operating Income (Loss) ($MM)	$5.2	$76.1	$(27.2)
Net Income (Loss) ($MM)	$13.8	$60.5	$(19.4)
Diluted EPS ($)	$0.28	$1.24	$(0.40)
Gross Margin %	14.4%	26.8%	5.7%
Operating Margin %	1.5%	16.8%	-9.3%
Net Income Margin %	4.0%	13.3%	-6.6%

Year-over-year comparison:

Metric	Q1 FY2020	Q1 FY2021	YoY Change
Net Sales ($MM)	$241.2	$292.8	+21.4%
Gross Profit (Loss) ($MM)	$(21.1)	$16.8	+$37.9
Operating Income (Loss) ($MM)	$(63.5)	$(27.2)	+$36.3
Net Income (Loss) ($MM)	$(45.8)	$(19.4)	+$26.4
Diluted EPS ($)	$(0.94)	$(0.40)	+$0.54
Gross Margin %	-8.8%	5.7%	+14.5 pts

Segment and pricing details:

Metric	Q3 FY2020	Q4 FY2020	Q1 FY2021
Specialty Egg Revenue ($MM)	$117.7	$133.3	$129.2
Specialty % of Egg Sales (dollars)	35.0%	29.9%	45.2%
Dozens Sold (000)	271,278	282,422	263,994
Dozens Produced (000)	239,072	242,962	231,161
Net Avg Selling Price ($/dozen)	$1.236	$1.575	$1.078
Specialty Net Avg Price ($/dozen)	$1.887	$1.934	$1.880
Feed Cost ($/dozen)	$0.406	$0.405	$0.388

Balance sheet snapshot:

Metric	May 30, 2020	Aug 29, 2020
Cash and Short-Term Investments ($MM)	$232.3	$193.3
Inventories ($MM)	$187.2	$189.2
Total Assets ($MM)	$1,206.7	$1,167.9
Stockholders’ Equity ($MM)	$1,009.7	$991.9

Estimates vs. Actuals:

Metric	Actual Q1 FY2021	Consensus Q1 FY2021	vs. Consensus
Revenue ($MM)	$292.8	N/A (Unavailable via S&P Global)	N/A
Diluted EPS ($)	$(0.40)	N/A (Unavailable via S&P Global)	N/A

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend (Variable Policy)	Q1 FY2021	No dividend in Q4 FY2020; cumulative losses to recover $1.4M at Q4 FY2020	No dividend for Q1 FY2021; cumulative losses to recover $20.8M at Aug 29, 2020	Maintained (no dividend); cumulative loss increased
Revenue/EPS	Q1 FY2021	Not provided	Not provided	Maintained (no formal guidance)

Other relevant corporate action (Q1 FY2021 period): Amended and Restated 2012 Omnibus Long-Term Incentive Plan approved (adds 1,000,000 authorized shares; 10-year max term; extends Plan to 2032; eliminates liberal share counting) .

Earnings Call Themes & Trends

Note: No formal earnings call transcript was available for Q1 FY2021; themes are drawn from press releases.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q1 FY2021)	Trend
Supply/Demand & Pricing	Q3: Conventional prices -13.8% YoY; oversupply; specialty demand pressured by low conventional pricing . Q4: Demand surge (COVID + Easter); Southeast large avg $1.71; net sales $453.3M .	Market prices volatile and decreased overall vs end of FY2020; retail demand strong; food service below pre-quarantine constraining retail prices; Southeast large avg $0.95/dozen .	Normalizing sequentially; improving YoY vs record lows .
Specialty Eggs Strategy	Q3: Specialty rev $117.7M; 35.0% of sales; investments in cage-free expansion . Q4: Specialty rev $133.3M; 29.9% of egg sales; ongoing cage-free capacity build .	Specialty rev $129.2M; 45.2% of egg sales dollars; specialty dozens +15.5% YoY; sustained investment in cage-free (>$389.9M since 2008) .	Mix shifting toward specialty by dollars; capacity and investment continuing .
Regulatory/Legislative (Cage-Free)	Q3/Q4: Multiple states mandate cage-free; timeline 2022–2026; ~23% U.S. population impacted; company preparing .	Reaffirms legislation affecting 23% of U.S. population; working with customers on transition; significant cage-free investment .	Ongoing regulatory tailwind for specialty .
Feed Costs/Grain Supply	Q3: Feed costs -3.6%; supplies favorable; volatility risk (COVID/trade) . Q4: Feed costs -1.5%; supplies favorable; volatility risk persists .	Farm costs/dozen -4.3%; USDA corn/soy supplies favorable; volatility risk (COVID/weather/geopolitics) .	Favorable near term; risks remain .
COVID-19 Operational Impact	Q3/Q4: Emphasis on employee safety; operations normal; supplemental pay; no known food supply transmission .	Continued prioritization of safety; donations of 900,000 dozen eggs; retail demand supported by at-home meals .	Managed steadily; community support increased .
Dividend Policy	Q3/Q4: No dividend; cumulative losses $61.9M (Q3); then $1.4M (Q4) to recover .	No dividend; cumulative losses $20.8M to recover .	Dependent on profitability trajectory .

Management Commentary

“Total dozens sold were up 3.8 percent... primarily due to continued strong retail demand... food service demand is still well below pre-quarantine levels, which we believe has constrained the price of shell eggs in the retail market.” — Dolph Baker, Chairman & CEO .
“Our average sales price was up 17.8 percent compared with the prior year first quarter... The overall supply of eggs has declined significantly, and overall demand is expected to improve as food service sales return to pre-COVID-19 levels.” .
“Our farm production costs per dozen produced... decreased 4.3 percent... due to lower feed costs and lower amortization... current supplies of corn and soybeans are favorable... ongoing uncertainties... may lead to further price volatility.” .
“We will not pay a dividend with respect to the first quarter... cumulative losses to be recovered... $20.8 million.” .
Strategic positioning: “An important competitive advantage... ability to offer... conventional, cage-free, organic and other specialty eggs... invested over $389.9 million... to expand our cage-free production.” .

Q&A Highlights

No Q&A highlights to report; the period’s investor communication was via press releases and SEC filings .

Estimates Context

Wall Street consensus via S&P Global was unavailable at the time of this analysis due to access limits; as such, we cannot quantify beats/misses versus consensus for Q1 FY2021. Actuals provided above are from company filings .
Implication: Absent consensus, we expect near-term estimate revisions to consider sequential normalization from Q4 peaks, improving YoY pricing, specialty mix strength, and the pace of food service recovery (price sensitivity), alongside favorable but potentially volatile feed cost dynamics .

Key Takeaways for Investors

Sequential normalization from Q4’s exceptional COVID/Easter-driven pricing produced a softer Q1; watch for continued recovery as food service demand normalizes and supply tightens (USDA hen count down 15.1M YoY) .
Specialty eggs remain a strategic growth lever with stronger revenue mix contribution (45.2% of egg sales dollars) and higher specialty dozens; ongoing cage-free investments support long-term mix and pricing power .
Cost tailwinds from lower feed costs drove a 4.3% reduction in farm costs/dozen; monitor commodity volatility risk (COVID, weather, geopolitics) .
Dividend suspension persists under the variable policy due to cumulative losses; a return to dividends requires sustained profitability and recovery of cumulative losses ($20.8M) .
Balance sheet remains strong with $193.3M cash and short-term investments; equity of $991.9M provides flexibility for investment and operations through cyclical pricing .
Near-term trading setup is driven by spot egg pricing, supply/demand balance, and specialty mix trajectory; positive catalysts include tightening supply and continued retail strength, while risks include feed cost volatility and slower-than-expected food service recovery .
Corporate governance update: LTIP amended and restated (additional authorized shares, extended term), signaling ongoing alignment of incentives with long-term growth and diversification strategy .

CAL-MAINE FOODS INC (CALM)·Q1 2021 Earnings Summary