Yahoo Finance Cal-Maine (NASDAQ:CALM) Reports Sales Below Analyst Estimates In Q2 Earnings
Egg company Cal-Maine Foods (NASDAQ:CALM) fell short of analysts' expectations in Q2 CY2024, with revenue down 7% year on year to $640.8 million. It made a GAAP profit of $2.32 per share, improving from its profit of $2.26 per share in the same quarter last year.
Is now the time to buy Cal-Maine? Find out in our full research report.
Cal-Maine (CALM) Q2 CY2024 Highlights:
Revenue: $640.8 million vs analyst estimates of $652.3 million (1.8% miss)
EPS: $2.32 vs analyst expectations of $2.46 (5.7% miss)
Gross Margin (GAAP): 29.1%, up from 28.8% in the same quarter last year
Market Capitalization: $3.16 billion
Sherman Miller, president and chief executive officer of Cal-Maine Foods, stated, “We are pleased to report a solid performance for the fourth quarter amidst a challenging period for Cal-Maine Foods and our industry. We are extremely proud of our managers and employees who continued to manage our operations in a dynamic environment affected by recent outbreaks of highly pathogenic avian influenza (“HPAI”)."
Known for brands such as Egg-Land’s Best and Land O’ Lakes, Cal-Maine (NASDAQ:CALM) produces, packages, and distributes eggs.
Perishable Food
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Sales Growth
Cal-Maine carries some recognizable brands and products but is a mid-sized consumer staples company. Its size could bring disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale. On the other hand, Cal-Maine can still achieve high growth rates because its revenue base is not yet monstrous.
As you can see below, the company's annualized revenue growth rate of 19.9% over the last three years was impressive for a consumer staples business.
This quarter, Cal-Maine missed Wall Street's estimates and reported a rather uninspiring 7% year-on-year revenue decline, generating $640.8 million in revenue.
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Operating Margin
Read More Operating margin is an important measure of profitability accounting for key expenses such as marketing and advertising, IT systems, wages, and other administrative costs.
Cal-Maine has been a well-oiled machine over the last two years. It demonstrated elite profitability for a consumer staples business, boasting an average operating margin of 23.5%.
Analyzing the trend in its profitability, Cal-Maine's annual operating margin decreased by 16.8 percentage points over the last year. Even though its margin is still high, shareholders will want to see Cal-Maine become more profitable in the future.
In Q2, Cal-Maine generated an operating profit margin of 22.2%, up 2.5 percentage points year on year. This increase was encouraging, and since the company's operating margin rose more than its gross margin, we can infer it was recently more efficient with its general expenses like sales, marketing, and administrative overhead.
Key Takeaways from Cal-Maine's Q2 Results
We struggled to find many strong positives in these results. Its EPS and revenue missed analysts' expectations. Overall, this was a bad quarter for Cal-Maine. The stock traded down 2.1% to $63.50 immediately following the results.
Cal-Maine may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
