CAL-MAINE FOODS INC (CALM)

EXECUTIVE OVERVIEW

For

the

third

quarter and

the

first

thirty-nine

weeks of

fiscal 2026,

we recorded

a gross

profit

of $119.3

million

and $638.0

million, respectively,

compared to $716.1

million and $1.3

billion, respectively,

for the same periods

of fiscal

2025, primarily

driven by a decrease

in the net average selling price of shell eggs, particularly

conventional eggs.

Our net average selling price per dozen for shell eggs for the third quarter of fiscal 2026 declined 56.5% to $1.766 from $4.060

in

the

prior-year period.

Average

conventional egg

prices per

dozen declined

70.1% to

$1.423 from

$4.766 in

the

prior-year

period. Average specialty egg prices per dozen declined 16.9% to $2.313 from $2.784 in the prior-year period. Our dozens sold

for the third quarter of fiscal

2026 decreased 2.2% compared

to the third quarter of fiscal 2025.

Wholesale shell

egg prices are

volatile, cyclical,

and impacted

by

a number

of factors,

including

consumer demand, seasonal

fluctuations, the

number and

productivity of

laying hens

in the

U.S., outbreaks

of agricultural

diseases such

as HPAI,

severe

weather patterns and

retailers go-to-market strategies and how

they manage their inventories.

We

believe the

recent decline in

Index

24

wholesale egg

prices primarily

reflects improved

egg supply,

following

disruptions

associated with

HPAI

in

the

prior

fiscal

year. Compared to

the same period last year,

panic-driven purchasing activity appears to have subsided, and improved pipeline

availability

relative to

the

prior

fiscal year

period

appears to

have

reduced the

need

for

accelerated purchasing

or inventory

builds by retailers and foodservice operators. As a result, wholesale

shell egg prices have declined, while retail shell egg prices

have adjusted more gradually.

The daily

average price

for

the

Urner Barry

Southeast

Large Index

in

the

third

quarter

of fiscal

2026

fell

78.6%, while

the

USDA daily average price

for large shell eggs dropped 78.9%, compared to the same

period last year.

According to the

USDA, the monthly

average size of the

layer hen flock

from December 2025

through February 2026

(which

most

closely aligns

with

our

third

fiscal quarter)

was approximately

310.8

million

hens, an

increase

of 6.7

million

hens, or

2.2%,

compared

to

the

same

period

in

the

previous

year.

During

the

third

quarter

of

fiscal

2026,

13.2

million

hens

were

depopulated due to HPAI, compared with 45.0 million during the same period of fiscal 2025, representing a 70.6% reduction in

depopulations.

For more information about historical shell egg prices, see

Part I, Item 1. “Business – Price for Shell Eggs” of our 2025 Annual

Report.

Prepared food sales

for the

third quarter

of fiscal

2026 increased

$51.9 million,

compared to

the third

quarter of

fiscal 2025,

primarily due to our acquisition of Echo Lake

Foods in the first quarter

of fiscal 2026.

Our farm

production costs

per dozen

produced for

the

third quarter

of fiscal

2026 increased

4.4%, or

$0.04 compared to

the

prior year

period, primarily

due to

higher other

farm production

costs. Other

farm production

costs increased 9.1%

primarily

due

to

high

facility

costs

compared

to

the

comparable

period

in

the

prior

year.

Feed

costs

per

dozen

produced

remained

relatively flat

in the

third quarter of

fiscal 2026,

compared to the third

quarter of fiscal

2025. For information

about historical

corn and soybean meal prices, see Part I, Item 1. “Business – Feed Costs for Shell Egg Production” of

our 2025 Annual Report.

Our prepared foods cost of sales increased $44.8

million for the third quarter of

fiscal 2026,

compared to the prior-year period,

primarily due to the acquisition of

Echo Lake Foods.

RESULTS OF OPERATIONS

The following table sets

forth, for the periods indicated, certain items

from our Condensed Consolidated Statements of Income

expressed as a percentage

of net sales.

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Net sales

100.0

%

100.0

%

100.0

%

100.0

%

Cost of sales

82.1

%

49.5

%

73.0

%

58.2

%

Gross profit

17.9

%

50.5

%

27.0

%

41.8

%

Selling, general and administrative

12.5

%

5.6

%

10.0

%

7.0

%

(Gain) loss on involuntary conversions

(0.1)

%

—

%

(0.3)

%

—

%

(Gain) loss on disposal of fixed assets

0.1

%

—

%

0.1

%

—

%

Operating income

5.4

%

44.9

%

17.2

%

34.8

%

Total other income, net

3.3

%

1.9

%

2.1

%

1.6

%

Income before income

taxes

8.7

%

46.8

%

19.3

%

36.4

%

Income tax expense

1.1

%

10.9

%

4.4

%

8.7

%

Net income

7.6

%

35.9

%

14.9

%

27.7

%

Less: Income (loss) attributable to

noncontrolling interest

0.1

%

—

%

—

%

—

%

Net income attributable to Cal-Maine

Foods, Inc.

7.5

%

35.9

%

14.9

%

27.7

%

NET SALES

Total

net sales

for the

third quarter of

fiscal 2026

were $667.0

million, compared to

$1.4 billion

for the

same period

of fiscal

2025.

Index

25

Shell egg sales represented 85.8% and

94.9% of total net

sales for the third

quarters

of fiscal 2026 and 2025,

respectively.

The

Company’s

shell

egg

offerings,

for

both

branded

and

private-label

products,

include

specialty

and

conventional

shell

eggs.

Specialty

shell

eggs

include

cage-free,

organic,

brown,

free-range,

pasture-raised

and

nutritionally

enhanced

shell

eggs.

Conventional shell eggs sales represent all

other shell egg sales not

sold as specialty shell eggs.

The Company’s

prepared food

offerings

include

items

such

as

pre-cooked

egg

patties,

omelets,

folded

and

scrambled

egg

formats,

hard-cooked

eggs,

pancakes, waffles, and specialty wraps.

Egg product offerings include liquid and frozen

egg products. Other sales represent

feed

sales, miscellaneous byproducts and resale

products.

Total

net sales

for both

the thirty-nine

weeks ended

February 28,

2026 and

March 1,

2025

was $2.4

billion

and $3.2

billion,

respectively.

Shell egg sales represented 85.3% and 94.7% of total net sales for the thirty-nine weeks ended February 28, 2026

and March 1,

2025, respectively.

The table below presents net sales in key

categories (in thousands, except

percentage data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

% Change

February 28, 2026

March 1, 2025

% Change

Shell Eggs

$

572,314

$

1,345,382

(57.5)

%

$

2,011,278

$

2,990,756

(32.8)

%

Prepared foods

63,626

11,757

441.2

219,212

31,134

604.1

Egg products

18,360

49,267

(62.7)

89,998

105,716

(14.9)

Other

12,651

11,279

12.2

38,563

30,621

25.9

Total net sales

$

666,951

$

1,417,685

(53.0)

%

$

2,359,051

$

3,158,227

(25.3)

%

The table below presents an analysis of

our shell egg sales (in thousands, except

percentage data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Shell egg sales

Conventional

$

283,173

49.5

%

$

1,016,438

75.6

%

$

1,152,979

57.3

%

$

2,118,065

70.8

%

Specialty

289,141

50.5

328,944

24.4

%

858,299

42.7

872,691

29.2

Total shell egg sales

$

572,314

100.0

%

$

1,345,382

100.0

%

$

2,011,278

100.0

%

$

2,990,756

100.0

%

Dozens sold

Conventional

199,035

61.4

%

213,247

64.3

%

600,291

62.3

%

622,833

64.1

%

Specialty

125,024

38.6

118,148

35.7

363,941

37.7

348,385

35.9

Total dozens sold

324,059

100.0

%

331,395

100.0

%

964,232

100.0

%

971,218

100.0

%

Net average selling price

per dozen

Conventional

$

1.423

$

4.766

$

1.921

$

3.401

Specialty

$

2.313

$

2.784

$

2.358

$

2.505

All shell eggs

$

1.766

$

4.060

$

2.086

$

3.079

Shell egg sales

Third Quarter – Fiscal 2026 vs. Fiscal 2025

-

In the

third quarter

of fiscal

2026, conventional

egg sales

decreased $733.3 million,

or 72.1%, compared

to the

third

quarter of

fiscal

2025,

primarily

due

to

a

70.1%

decrease in

the

prices

for

conventional

eggs,

which

resulted

in

a

$665.4 million decrease in net sales,

and a 6.7% decrease in the volume of conventional dozens sold, which resulted

in

a $67.7 million decrease in net sales.

-

In the third quarter of fiscal 2026, specialty egg sales decreased $39.8 million, or 12.1%, compared to the third quarter

of

fiscal

2025,

primarily

due

to

a

16.9%

decrease in

prices

for

specialty

eggs,

which

resulted

in

a

$58.9

million

decrease in net sales,

partially offset by a 5.8% increase in the volume of specialty eggs sold, which resulted

in a $19.1

million increase in net sales.

Index

26

-

See “Executive Overview” above for additional discussion of factors

impacting shell egg sales for the third quarters of

fiscal 2026 and 2025.

Thirty-nine weeks – Fiscal 2026 vs.

Fiscal 2025

-

For

the

thirty-nine

weeks

ended

February

28,

2026,

conventional

egg

sales

decreased

$965.1

million,

or

45.6%,

compared to

the

same period

of fiscal

2025,

primarily

due to

a 43.5%

decrease in

the

prices

for conventional

shell

eggs,

which resulted

in

an $888.4

million

decrease in

net

sales,

and a

3.6% decrease in

the

volume

of conventional

eggs sold,

which resulted in a $76.7 million

decrease in net sales.

-

For the thirty-nine weeks ended February 28, 2026, specialty egg

sales decreased $14.4 million, or 1.6%, compared to

the same

period of

fiscal 2025,

primarily due to

a 5.9%

decrease in the

prices for specialty

eggs, which

resulted in a

$53.5

million

decrease in

net

sales,

partially

offset by

a 4.5%

increase in

the

volume

of

specialty eggs

sold,

which

resulted in a $39.0 million increase

in net sales.

During the first three quarters of fiscal 2026, a

higher proportion of our conventional eggs were sold on a hybrid pricing model

that takes into account both our cost of production

as well as wholesale market prices,

instead of solely market-based pricing,

in

response to

customer demand.

We

believe the

hybrid pricing

arrangement may

help some

customers better

plan and

manage

their businesses

and reinforces

our role

as a

trusted

supplier as

well

as reduce

volatility in

our financial

results

compared to

historical time periods when wholesale

market prices were

volatile.

Prepared foods sales

Third Quarter – Fiscal 2026 vs. Fiscal 2025

-

In the third quarter of

fiscal 2026, prepared food

sales increased $51.9 million,

compared to the third quarter of

fiscal

2025, primarily due to

an 834.3% increase in pounds

sold which resulted in

a $49.3 million increase in net sales.

The

increase in

sales

volume

is

primarily

due to

the

acquisition

of Echo

Lake Foods,

which

was completed

in

the

first

quarter of fiscal 2026 as well as

a nine-fold increase in sales volume at

Crepini.

Thirty-nine weeks – Fiscal 2026 vs.

Fiscal 2025

-

Prepared

foods

net

sales

increased

$188.1

million,

compared

to

fiscal

2025,

primarily

due

to

the

same

reasons

discussed above.

Egg products sales

Third Quarter – Fiscal 2026 vs. Fiscal 2025

-

In the third quarter of fiscal 2026, egg

products sales decreased $30.9 million, or 62.7%, compared to the third quarter

of fiscal 2025, primarily due to a 60.7%

decrease in the net average selling price, resulting in a $31.0 million decrease

in

net

sales,

partially

offset

by

a

3.6%

increase in

the

volume

of

egg

products sales,

resulting

in

a

$706

thousand

increase in net sales.

Thirty-nine weeks – Fiscal 2026 vs.

Fiscal 2025

-

For the thirty-nine weeks ended February

28, 2026, egg products sales decreased

$15.7 million, or 14.9%, compared to

the same period of fiscal 2025, primarily due to a 16.4% decrease in

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