Can CALM Sustain Elevated Sales Volumes in the Coming Quarters?

Cal-Maine Foods, Inc. CALM, the largest producer and distributor of fresh shell eggs in the United States, sold a record 331.4 million dozen shell eggs in the third quarter of fiscal 2025 (ended March 1, 2025). This marked a 10.2% increase year over year, owing to higher seasonal demand. Also, severe weather during the quarter prompted consumers to stock up on staples, including eggs. 

CALM's sales performance has been strong so far in fiscal 2025, with volumes rising 13% in the first quarter to 310 million dozen and 10% in the second quarter to 330 million dozen. Year-to-date, the company has sold 971.2 million dozen shell eggs, 17% higher than the year-ago period. Its focused approach to adding production capacity through acquisitions and organic growth has led to improved volumes. The company produced 848 million dozen eggs during the nine-month period ended March 1, 2025.

Eggs remain a staple in the consumers’ grocery lists, as eggs are being valued as a source of high-quality protein and increasingly favored for healthy eating. 

Volumes are expected to remain strong, as Cal-Maine Foods remains on track to complete its ongoing expansion projects that are expected to add approximately 1.1 million cage-free layer hens and 250,000 pullets this year. Also, the conversion of a new egg processing facility and hatchery in Dexter, MO, is projected to add additional capacity of 1.2 million free-range hens by calendar year-end. The company’s investments in best-in-class biosecurity technology, equipment, procedures and training to address ongoing avian flu threats will play a crucial role in protecting its flock and maintaining stable production levels.

Vital Farms, Inc. VITL reported volume-related revenue growth of 1.3% or $1.9 million in the first quarter of 2025. The growth was driven by accelerated demand for Vital Farm’s existing products, new offerings and retail distribution gains with new and existing customers.

Vital Farms expects year-over-year net revenue growth to accelerate in the back half of the year as its supply-chain investments enable higher sales volume. Vital Farms’ internal capacity expansion plans also remain on track, with the construction of an additional egg washing and packing line at its Egg Central Station facility in Missouri slated for completion during the fourth quarter of 2025.

Post Holdings, Inc.’s POST Foodservice segment (primarily egg and potato products) saw a volume increase of 2.8% in the second quarter of fiscal 2025, which was driven by the inclusion of ready-to-drink shakes in the current-year period, partially offset by declines in egg and potato volumes. 

Post Holdings expects to recover the lost egg supply over the remainder of the fiscal year and assumes that there are no additional avian influenza outbreaks within its controlled farms.

CALM’s Price Performance, Valuation & Estimates

Cal-Maine Foods has declined 7.7% so far this year compared with the industry's 4.7% dip. 

CALM is currently trading at a forward 12-month price/earnings (P/E) ratio of 16.61X compared with the industry’s 10.43.

The Zacks Consensus Estimate for Cal-Maine Foods’ fiscal 2025 earnings is $22.73 per share, indicating a year-over-year increase of 299.5%. The estimate for fiscal 2026 of $5.71 indicates a 74.9% decline. The chart below depicts the revision activity for CALM’s earnings estimates for 2025 and 2026.

CALM currently carries a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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