Cal-Maine Foods (CALM), the largest egg producer in the U.S., just reported its “strongest first quarter in company history.” So naturally, the stock dropped nearly 7% in premarket trading. Because Wall Street logic is like scrambled eggs—sometimes hard to follow.
Let’s unpack the carton.
Revenue surged 17% to $922.6 million, and earnings landed at $4.12 per share. Not bad, right? Well, analysts were expecting $5.01, and apparently, missing by $0.89 is enough to send investors running faster than a free-range hen. The revenue also missed expectations of $960.3 million, which didn’t help.
Still, there were bright spots:
Shell egg sales rose 6.5%, with specialty eggs up over 10%.
Prepared food sales spiked 839% to $83.9 million, thanks to the Echo Lake acquisition. That’s not a typo—839%. Echo Lake breakfast foods alone contributed $70.5 million.
So why the sell-off, in the biggest egg producer? I know I like Eggs, and I bet you do too!
It’s a classic case of “beat the drum, miss the beat.” Investors were hoping for a blowout quarter, and while Cal-Maine delivered growth, it didn’t hit the high notes analysts wanted. Add in a recovering egg supply chain post-avian flu and some margin pressure, and you’ve got a recipe for short-term volatility.
But here’s the thing: consumer demand for protein and wellness-focused foods is rising. Specialty eggs are flying off shelves. And Cal-Maine’s breakfast empire is expanding faster than my waistline during Q4 earnings season.
So, what did I do this morning? I bought more!
Because while the market panics over a few cents per share, I see a company with strong fundamentals, a juicy dividend (still hovering near 9%), and a long-term growth story that’s just getting started.
Sometimes you’ve got to crack a few eggs to make a portfolio omelet.
But Wait—CALM Pays Variable Dividends
Cal-Maine uses a variable dividend policy, paying out one-third of net income each quarter if profitable. That means the amount fluctuates, but the tax treatment doesn’t change—as long as the dividend is from earnings and you meet the holding period, it’s still qualified
If you’re reinvesting dividends or trading actively, double-check your holding period before assuming qualified status. And if you’re using a tax-advantaged account like an IRA, the distinction doesn’t matter—those dividends grow tax-deferred or tax-free.
Disclaimer: I own shares of Cal-Maine Foods (CALM) and added to my position this morning following the earnings release. This post is for informational and entertainment purposes only and does not constitute investment advice. Always do your own research—or at least consult someone who doesn’t make breakfast metaphors for a living.
