Cal-Maine reports sunny-side up earnings — are eggs the new (perishable) TP?
I like eggs... Not just Debbie from Nickelodeon's "The Girls Room." America's largest egg producer, Cal-Maine, reported expectation-beating earnings — but sales actually fell 10% last quarter (that was pre-full on corona-conomy). Now it's warning that egg prices might get a little crazy as the pandemic intensifies, which would be good for Cal-Maine. On that note:
- Egg sales soared 44% in America for the week ending March 14 (compared to last year). Americans are starting to hoard eggs as more cooking/baking goes on at home.
- Retailers are ordering 6X more eggs than usual and paying extra to secure massive egg purchases — wholesale egg prices have jumped 180% since March 1.
- Walmart is (Cal-Maine's biggest customer) and has had to implement shopper limits on egg purchases.
Wholesale price controls retail price... 90% of Cal-Maine's biz is selling eggs wholesale to big retailers like Walmart. After completing 22 egg-quisitions, it now produces around 1 of every 5 eggs you consume from hoarding destinations like Costco. The CEO is now eyeing the rising wholesale prices. Which could mean...
Your morning scramble won't get pricier — until retailers say so... When demand for a product surges, your wallet might not feel it immediately (or at all). But Cal-Maine might raise prices on Walmart after the chain buys 6X more eggs than usual — then, Walmart may pass some or all of that added costs onto us consumers. Most retailers haven't. Yet.