CAL-MAINE FOODS INC

ITEM

MANAGEMENT’S

DISCUSSION

AND

ANALYSIS

OF

FINANCIAL

CONDITION

AND

RESULTS

OF

OPERATIONS

RISK FACTORS; FORWARD

-LOOKING STATEMENTS

For

relating

to

important

risks

and

that

could

materially

affect

our

securities,

condition,

operating results,

or

cash

flow,

reference is

made

to

the

disclosure set

forth

under

Part I. Item 1A. Risk

Factors

. In

addition, because

the following

discussion includes

numerous forward-looking

statements relating

to our

securities, financial condition, operating

results and cash flow, reference is made

to the disclosure set forth

under

Part I. Item 1A.

and

to

the

set

forth

in

the

section

of

Part

I

immediately preceding

Item

above

under

the

caption

“

Forward-Looking Statements

.”

COMPANY OVERVIEW

Cal-Maine Foods, Inc. is primarily

engaged in the production, grading,

packaging, marketing and distribution

of fresh shell eggs,

conventional,

cage-free,

brown,

free-range,

pasture-raised

and

nutritionally-enhanced eggs,

as

well

as

egg

products and a variety of prepared

foods. Our fiscal year end is

the Saturday closest to May 31. The fiscal

years 2025 and 2024

included 52 weeks and fiscal year 2023 included 53 weeks. The

Company, which is headquartered in

Ridgeland, Mississippi, is

the

largest

producer

and

distributor

of

fresh

shell

eggs

in

the

United

States

(“U.S”).

In

fiscal

2025,

we

sold

1.3 billion dozen shell

eggs, which we

believe represented approximately

24% of domestic

shell egg consumption.

Our total flock

as of May 31, 2025 of

approximately 48.3 million layers and 11.5

million pullets and breeders is the

largest in the U.S. We

sell

most of

our shell

eggs to

a diverse

group of

customers, including

national and

regional grocery

store chains,

club stores,

servicing independent supermarkets in the U.S., food service distributors,

and egg product consumers throughout the majority of

The Company has one operating and one

reportable segment, which is the production, packaging, marketing and

distribution of

shell eggs, egg products

and prepared foods. Many of

our customers rely on

us to provide most

of their shell egg

needs, including

specialty and

conventional eggs. We

have recently

expanded our

prepared foods

product offerings,

as described

in this

report.

For further description of our business, refer to

Part I. Item I. Business

.

ACQUISITIONS

During the

first quarter

acquired substantially

all the

egg production,

processing and

egg

products breaking assets of ISE America, Inc. and certain of its

affiliates (“ISE”). The assets acquired included commercial shell

egg

and

processing

with

a

at

the

time

of

approximately 4.7

million

laying

hens,

including 1.0

million cage-free,

and 1.2

million pullets,

approximately 4,000

acres of

land, inventories

and an

egg

products breaking facility. The acquired assets also include an extensive customer distribution network across the Northeast and

Mid-Atlantic states, and production operations in Maryland, New Jersey, Delaware and South Carolina. These production assets

are our first in Maryland, New Jersey and Delaware. We believe this acquisition provides us with an opportunity to significantly

enhance our market reach in the Northeast and Mid-Atlantic states.

During the second

quarter of fiscal

2025, we completed

a strategic investment

with Crepini LLC,

establishing a new

and prepared foods venture. Crepini LLC, founded in 2007, grew its brand throughout

the U.S. and Mexico featuring egg wraps,

protein pancakes, crepes,

and wrap-ups, which

are sold online

and in over

3,500 retail stores.

The new entity, located in

Hopewell

Junction, New

York,

operates as

We

approximately $6.75

cash

to

equipment

and

other

assets

and

fund

working

capital

in

exchange

for

a

51%

in

the

new

venture. Crepini LLC contributed its existing assets and business in exchange for a 49% interest in the new venture.

In fiscal 2022,

we announced a

strategic investment in

a new entity, MeadowCreek Food,

LLC (“MeadowCreek”), which

became

a majority-owned subsidiary of

During the fourth quarter

of fiscal 2023,

MeadowCreek began operations with

a

focus on

being a

leading provider

of hard-cooked

eggs. During

the second

quarter of

fiscal 2025,

we acquired

the remaining

ownership interests in MeadowCreek and it became a wholly-owned subsidiary of the Company.

During the

third quarter

acquired certain

assets of

Deal-Rite Foods,

Inc. and

certain of

its affiliates

(“Deal-

Rite”). The assets acquired included two feed mills, storage facilities, usable

grain, vehicles, related equipment and a retail feed

sales business located

in North

Carolina. The acquired

assets will produce

and deliver feed

to our nearby

shell egg production

In the second quarter of

fiscal 2024, we acquired the

assets of Fassio Egg Farms,

Inc. (“Fassio”) related to its

egg production and

processing business. Fassio

owned and operated

commercial shell egg

production and processing

with a

capacity at

the time

of acquisition

1.2 million

laying hens,

primarily cage-free,

a feed

mill, pullets,

a

fertilizer production and composting operation and land located in Erda, Utah, outside Salt Lake City. This acquisition provided

us with an opportunity to expand our market presence in Utah and the western U.S., particularly for cage-free eggs.

In the fourth quarter of fiscal 2024, we acquired a broiler processing

plant, hatchery and feed mill in Dexter, Missouri, which we

repurposed for use in shell egg production.

For additional discussion of our

acquisitions during fiscal 2024 and 2025,

see

Note 2 – Acquisitions

in Part II. Item 8.

Notes to

In addition, subsequent to our fiscal 2025, the Company acquired Echo Lake Foods, LLC (formerly Echo Lake Foods, Inc.) and

certain related companies (collectively “Echo Lake Foods”). Echo Lake

Foods is based in Burlington, Wisconsin

and produces,

packages,

markets

and

distributes

foods,

waffles,

pancakes,

scrambled

eggs,

frozen

cooked

omelets,

egg

patties, toast and diced

eggs. The purchase price

was approximately $258 million

and was funded with

available cash on hand.

Refer to

Part II. Item 8. Notes to the Consolidated Financial Statements, Note 17 – Subsequent Events

.

HPAI

Outbreaks of HPAI

have continued

to occur

in U.S. poultry

flocks. Since the

HPAI

outbreaks in 2015,

there were no

reported

of

HPAI

in

the

table

egg

layer

flocks

until

the

–

December

time

period.

Thereafter,

there were

no HPAI

cases affecting

commercial layers

until November

2023. In

calendar year

2024, 40.2

million

layer

hens

and

pullets

were

depopulated

due

to

HPAI,

and

in

calendar

year

2025,

an

39.0

million

commercial layer hens

and pullets

were depopulated

through May

due to

HPAI.

The United

States Department of

Agriculture

(the “USDA”) reported that the

estimated table-egg layer flock as of

June 1, 2025 was approximately

285.5 million, compared to

304.3 million, 321.6 million, 311.5 million and 330.5 million as of June 1, 2024, 2023, 2022 and 2021, respectively.

HPAI is currently widespread in the wild bird population

worldwide. We remain dedicated to robust biosecurity programs

across

our locations and have invested more than $75 million in biosecurity

technology, equipment, procedures, and training across our

locations since the

last major HPAI

outbreak in 2015.

However, no

farm is immune

from HPAI.

For example, during

the third

and fourth quarters of fiscal 2024, we experienced

HPAI

outbreaks within our facilities located in Kansas and

Texas, which are

now fully operational. According

to the U.S. Centers

for Disease Control and

Prevention (“CDC”), as of

June 5, 2025, there

were

outbreaks in

1,073 herds

of dairy

cows in

17 states,

and 70

human cases

in the

U.S., almost

entirely among

poultry and

dairy

workers. In

2024, one

of the

human cases

resulted in

severe illness

after the

patient was

exposed to

sick and

dead birds

in backyard

flocks. The patient, who

was reported to have

underlying health conditions, died in

January 2025. There have been

no reported

cases

of

person-to-person

spread.

to

the

CDC,

the

human

health

risk

to

the

U.S.

public

from

the

HPAI

virus

is

considered to be low. The rate of depopulations slowed during our fourth quarter fiscal 2025 compared to our

third quarter fiscal

2025 and there

were no reported

significant depopulations in

June and through

July 22, 2025.

However, the

extent of possible

future outbreaks among U.S.

commercial egg layer

flocks, with heightened risk

during migration seasons, cannot

be predicted.

According to the USDA, HPAI

cannot be transmitted through safely handled and properly cooked eggs. There is no known risk

related to HPAI associated with eggs that are currently in the market and no eggs

have been recalled. For additional information,

refer to

.

We

have taken proactive

steps to help

mitigate the tight

egg supply situation

across the country.

Our efforts

resulted in a

18%

the average

layer hens

(reflecting re-start

of prior

year facility

outages and

both organic

and inorganic

expansion) and a 56% increase

in total chicks hatched during

the fourth quarter of

fiscal 2025 compared to

the prior-year quarter.

Our breeder flocks increased 48% as of the end of

fiscal 2025 compared to the end of fiscal 2024. We

also continue to invest in

expansion projects

within our

current operations

expected to

add approximately

1.1 million

cage-free layer

hens and

250,000 pullets by

the end of

calendar 2025, and

added production support

through the integration

of recently acquired

assets,

including the processing facilities from ISE and feed mills from Deal-Rite.

Executive Overview of Results – Fiscal Years Ended May 31, 2025, June 1, 2024 and June 3, 2023

Net sales (in thousands)

$

$

$

Gross profit (in thousands)

$

1,850,885

$

541,571

$

1,196,457

$

$

277,888

$

758,024

Net income per share attributable to Cal-Maine Foods, Inc.

Basic

$

25.04

$

5.70

$

15.58

Diluted

$

24.95

$

5.69

$

15.52

Net average shell egg price

(a)

$

3.134

$

1.932

$

2.622

Average UB Southeast Region - Shell Eggs - White Large

$

4.474

$

2.049

$

3.115

Feed costs per dozen produced

$

0.490

$

0.550

$

0.676

(a) The net average shell

egg selling price is the

blended price for all

sizes and grades of shell

eggs, including graded and

non-graded shell egg sales, breaking stock and undergrades.

For fiscal 2024,

net sales decreased

to $2.3 billion,

gross profit to

$541.6 million and

net income to

$277.9 million. The

decreases

compared to fiscal 2023

were primarily a result

of a decrease in

average egg selling prices.

The average UB southeastern

large

index price for fiscal 2024

decreased 34% compared to fiscal

2023. The decrease is

due in large part

to the recovery of

the egg

supply

the

HPAI

during

most

of

calendar

year

However,

the

resurgence

of

HPAI

in

November 2023 resulted

in the UB

southeastern large index

price being 9.1%

higher in the

fourth quarter of

fiscal 2024 compared

to the fourth quarter of fiscal 2023.

Our dozens sold for fiscal 2024

remained relatively flat compared to fiscal

2023. We had an increase in production capacity with

the acquisition

of the

and processing

business of

Fassio Egg

Farms, Inc.

during fiscal

2024,

which was offset by the temporary decrease in production due to the HPAI outbreaks at our facilities.

For fiscal 2025, we recognized net sales of $4.3 billion and net income of $1.2 billion. We recorded a gross profit of $1.9 billion

compared to $541.6

million for

fiscal 2024, primarily

driven by an

increase in the

net average selling

price of shell

eggs, primarily

conventional egg prices, as well

as an increase in total

dozens sold. Our results were

also positively impacted by lower

feed costs

and our

recent acquisitions

discussed above,

and were

partially offset

by an

the volume

and price

of outside

egg

purchases.

Our net average selling price

per dozen for fiscal 2025

was $3.134 compared to $1.932

in fiscal 2024. Conventional egg

prices

per dozen were

$3.490 compared to

$1.730 for the

prior year, and specialty

egg prices per

dozen were $2.519

compared to $2.309

for the

prior year.

Egg prices

2025 were

elevated compared

to fiscal

2024, primarily

due to

the resurgence

of HPAI

outbreaks, which decreased supply during

the higher seasonal demand

cycle. According to the

USDA, the size of

the layer hen

flock was 285.5 million hens

at June 1, 2025, compared

to the five-year average of

313.1 million hens. The daily average

price

for the Urner Barry southeast large index for fiscal 2025 increased 118.3%

from fiscal 2024.

Our dozens sold

increased 11.8%

2024. We

had an

increase in production

capacity with the

acquisitions of

the commercial

processing business

of ISE

during the

first quarter

2025. In

addition, sales increased in part due to increased volumes of outside egg purchases to provide shell

eggs to our customers during

the peak of HPAI outbreaks during the second and third quarters of fiscal 2025.

Our feed costs per dozen

produced decreased to $0.490 in

fiscal 2025, compared to $0.550

in fiscal 2024. For fiscal

year 2025,

the average Chicago Board

of Trade

(“CBOT”) daily market price

was $4.38 per bushel

for corn and $311

per ton for soybean

meal, representing decreases of 8.1% and 20.1%, respectively,

compared to the daily average CBOT prices for

fiscal 2024. Our

egg purchases and other cost of sales increased $439.4 million compared to fiscal 2024,

primarily due to higher shell egg prices

as well

as an

dozens purchased

to supply

eggs for

our customers,

including those

acquired in

our ISE

acquisition,

during the higher seasonal demand cycle while the nation experienced lower supply due to HPAI.

The following table sets

forth, for the fiscal

years indicated, certain items

from our Consolidated Statements

of Income expressed

as a percentage of net sales.

Net sales

100.0

%

100.0

%

Cost of sales

56.6

%

76.7

%

Gross profit

43.4

%

23.3

%

Selling, general and administrative

7.4

%

10.9

%

Gain on involuntary conversions

—

%

(1.0)

%

Operating income

36.0

%

13.4

%

Total other income

1.6

%

2.0

%

Income before income taxes

37.6

%

15.4

%

Income tax expense

9.0

%

3.6

%

28.6

%

11.8

%

Less:

Net loss attributable to noncontrolling interest

—

%

(0.1)

%

28.6

%

11.9

%

Ended May 31, 2025 Compared to Fiscal Year Ended June 1, 2024

NET SALES

Total net sales for fiscal 2025 were $4.3 billion compared to $2.3 billion for the prior fiscal year.

Shell egg sales represented

94.3% and 95.3% of

total net sales in

fiscal 2025 and 2024,

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,

brown,

free-range,

pasture-raised

and

enhanced

shell

eggs.

shell

eggs

sales

represent all

other shell

egg sales

not sold

as specialty

shell eggs.

and prepared

foods offerings

include liquid and

frozen egg products

and prepared foods

such as hard-cooked

eggs, egg wraps,

protein pancakes, crepes

and

wrap-ups. Other sales represent feed sales, miscellaneous byproducts and resale products.

The table below presents net sales in key categories (in thousands, except percentage data):

May 31,

Shell Eggs

$

4,019,910

$

2,217,408

81.3

%

198,833

89,009

123.4

Other

43,142

20,026

115.4

Total net sales

$

$

83.2

%

The table below presents an analysis of our shell egg sales (in thousands, except percentage data):

Shell egg sales

$

2,835,423

70.5

%

$

1,291,743

58.3

%

1,184,487

29.5

%

925,665

41.7

%

Total shell egg sales

4,019,910

100.0

%

2,217,408

100.0

%

Dozens sold

812,396

63.3

%

746,687

65.1

%

470,215

36.7

%

400,946

34.9

%

Total dozens sold

1,282,611

100.0

%

1,147,633

100.0

%

Net average selling price per dozen

$

3.490

$

1.730

$

2.519

$

2.309

All shell eggs

$

3.134

$

1.932

Shell egg sales

For

fiscal

2025,

shell

egg

sales

increased

$1.8

billion

to

fiscal

2024,

due

to

the

in

net

average selling prices for conventional eggs, and to a lesser extent the increase in dozens sold.

For fiscal 2025, conventional egg sales increased $1.5 billion, or 119.5%, compared to fiscal 2024, primarily due to the

in

egg

prices.

Changes in

price resulted

in

a $1.4

billion

net

sales and

changes

in

volume resulted

in a

$114

million increase

in net

sales. Conventional

egg prices

increased significantly

during fiscal

2025 due to a resurgence of HPAI outbreaks, which decreased the supply.

Specialty egg

sales increased

$258.8 million,

or 28.0%,

for fiscal

2025 compared

to fiscal

2024, primarily

due to a

17.3%

the volume

of specialty

dozens sold,

and to

a lesser

extent a

9.1% increase

in price.

Changes in

volume

resulted in a $159.9 million increase in net sales and changes in price resulted in a $98.7 million increase in net sales.

Our dozens sold

increased 11.8%

2024. We

had an

increase in production

with the acquisition

of the commercial

shell egg production

and processing business

of ISE during

the first quarter

of

fiscal 2025 as well as the resumption of full operations at our facilities in Chase, KS, and Farwell, TX, which were shut

down in the third and fourth quarters of fiscal 2024 due to HPAI outbreaks.

Egg products and prepared foods sales

Egg products and prepared foods sales increased $109.8 million, or 123.4% compared to fiscal 2024, primarily due to a

138.7% increase in sales of liquid eggs, which had a $54.9

million positive impact on net sales, and a 41.4% increase in

volume of liquid egg products sold.

The increase in volume, which had a

$23.3 million positive impact on net

sales, is

primarily related to the acquisition of ISE, which included a breaking facility.

Our egg products net average selling price increased in fiscal 2025, compared to fiscal 2024 as the supply of shell eggs

used to produce egg products decreased due to the resurgence of HPAI outbreaks.

Sales from hard-cooked eggs increased

$22.7 million or 137.3% to 39.1

million in fiscal 2025, compared to

as more processing capabilities came online throughout fiscal 2025 from our investments in MeadowCreek.

Other

Other sales increased compared to

the prior year period primarily

due to higher feed sales

related to our ISE acquisition.

COST OF SALES

Cost of

sales consists

of costs

directly related

to producing,

processing and

packing shell

eggs, purchases

eggs from

outside sources, processing and packing of egg products and other non-egg costs. Farm production costs are those costs

incurred

at the egg production facility, including feed, facility

(including labor), hen amortization and

other related farm production costs.

The following table presents the key variables affecting our cost of sales (in thousands, except cost per dozen data):

Cost of Sales

Farm production

$

1,035,638

$

987,861

4.8

%

Processing, packaging, and warehouse

396,116

335,949

17.9

Egg purchases and other cost of sales

819,619

380,200

115.6

159,627

80,862

97.4

Total cost of sales

$

2,411,000

$

1,784,872

35.1

%

Farm production costs (per dozen produced)

Feed

$

0.490

$

0.550

(10.9)

%

Other

$

0.428

$

0.433

(1.2)

%

Total farm production cost

$

0.918

$

0.983

(6.6)

%

Outside egg purchases (average cost per dozen)

$

3.67

$

2.16

69.9

%

Dozens produced

1,135,955

1,018,835

11.5

%

Percent produced to sold

88.6%

88.8%

(0.2)

%

Farm Production

Feed costs

per dozen

produced decreased

10.9% in

fiscal 2025

compared to

primarily due

to lower

feed

ingredient prices. The decrease in feed cost per dozen

resulted in a decrease in cost of sales of

$68.2 million compared

to the prior year.

For fiscal 2025, the average daily CBOT market price was $4.38 per bushel for corn and $311 per ton of soybean meal,

representing decreases of 8.1% and 20.1%, respectively, as compared to the average daily CBOT prices for fiscal 2024.

Other farm production costs per dozen produced decreased primarily due to lower flock amortization. Feed costs

reached their peak in the second quarter of fiscal 2023 and have since trended downward. Lower costs resulted in

lower capitalized values of the flocks during the grow out phase, which reduced amortization cost over time.

Current indications for corn

and soybean project

a neutral stocks-to-use ratio

in the near term

compared with the levels

prevailing

today; however,

as long

as outside

factors remain

uncertain (including

weather patterns

and global

supply chain

disruptions),

volatility could remain.

Processing, packaging, and warehouse

Processing, packaging, and

warehouse costs increased

primarily due to

an 11.7%

increase in the

volume of processed

dozens as well as an increase in costs of packaging materials.

Egg purchases and other cost of sales

Costs in

this category

increased primarily due

to higher

prices as

the average

cost per

dozen of

outside egg

purchases increased 69.9%

2024, as well

as due to an

increase of 27.6%

in dozens purchased.

Dozens

purchased increased due

to purchasing more

eggs to supply

our customers while

the nation experienced

lower supply

due to HPAI.

GROSS PROFIT

Gross

profit,

as

a

percentage

of

net

sales,

was

43.4%

for

fiscal

2025,

to

23.3%

for

fiscal

The

was

primarily due to higher net average selling

prices, particularly for conventional eggs, and higher volumes,

as well as lower feed

ingredient prices, partially offset by the increase in volume and price of outside egg purchases.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling, general, and administrative (“SGA”)

expenses include costs of delivery, marketing, and

other general and administrative

expenses. Delivery expense includes contract trucking expense

and all costs to maintain and operate

our fleet of trucks to deliver

products to

customers including

the related

payroll expenses.

includes franchise

fees that

are submitted

to

Eggland’s Best, Inc. (“EB”) to

support the EB

brand, brokerage and

commission fees, and

other general marketing

expenses such

as

payroll expenses

for our

in-house sales

team. Other

general

and

administrative expenses

include corporate

payroll related

and

other

general

corporate

costs.

The

table

an

analysis

of

our

SGA

(in

thousands):

$ Change

Delivery expense

$

93,460

$

72,742

$

20,718

28.5

%

53,861

52,285

1,576

3.0

%

Litigation loss contingency accrual

—

19,648

(19,648)

N.M.

%

Other general and administrative expenses

167,128

107,950

59,178

54.8

%

Total

$

314,449

$

252,625

$

61,824

24.5

%

N.M. - Not Meaningful

Delivery expense

The increased delivery expense is primarily due to an increase

in our sales volumes of egg and egg products

to fiscal 2024.

Contract trucking

expenses increased

in connection

with our

ISE and our

facilities in

Chase,

KS and Farwell, TX being fully operational in fiscal year 2025.

Marketing expense increased

slightly in fiscal

2025 compared to

fiscal 2024 primarily

due to an

increase in franchise

fees as specialty sales increased.

Litigation loss contingency accrual

In the second quarter of fiscal 2024, we accrued a $19.6 million loss contingency relating to a jury decision returned in

pending anti-trust

litigation. See

further discussion

in

Note 16 – Commitments and Contingencies

of Part

Notes to Consolidated Financial Statements.

Other general and administrative expenses

The increase

in other

general and

administrative expense

is primarily

due both

to an

the accrual

for anticipated

employee bonuses

and to

a $15

million increased

adjustment to

the fair

contingent consideration

with the

Fassio acquisition.

See further

discussion in

Note 4 – Fair Value Measurements

of Part

to

(GAIN) LOSS ON INVOLUNTARY

CONVERSIONS

For fiscal 2025

and 2024, we

recorded a loss

of $156 thousand

and gain of

$23.5 million, respectively. The gain

recorded in fiscal

2024 was due

to recoveries

under indemnity

and insurance

programs that exceeded

the amortized

book value

of the covered

assets

and our direct costs, primarily related to the HPAI outbreaks

at our Kansas and Texas facilities.

OPERATING

INCOME

As a result of the above, our operating income was $1.5 billion for fiscal 2025, compared to $312.5 million for fiscal 2024.

OTHER INCOME (EXPENSE)

Total

other

income

(expense)

consists

of

items

not

directly

charged

to,

or

related

to, operations

such

as

income

and

expense, equity in

income or loss

of unconsolidated entities,

and patronage dividends, among

other items. Patronage dividends

are paid to us from our membership in the EB cooperative.

The Company recorded interest income of $48.7 million

in fiscal 2025, compared to $32.3 million in

fiscal 2024, primarily due

to significantly higher

cash and cash

equivalents and investment

securities available-for-sale balances

and yields. We

interest expense of $612

thousand and $549 thousand

in fiscal 2025 and

2024, respectively, primarily related to commitment

fees

on our Credit Facility described below.

INCOME TAXES

For the fiscal year ended

May 31, 2025, our pre-tax

income was $1.6 billion, compared

to $360.0 million for fiscal

2024. Income

tax expense

of $384.9

million was

recorded for

fiscal 2025

with an

effective tax

rate of

24.0%.

For fiscal

2024, income

tax

expense was $83.7 million with an effective tax rate of 23.2%.

Items causing

our effective

tax rate

to differ

federal statutory

income tax

rate of

21% are

state income

taxes, certain

federal tax credits

and certain items included

in income or

loss for financial reporting

purposes that are

not included in taxable

income or loss

for income tax

purposes, including tax exempt

interest income, certain nondeductible

expenses, and net

income

or loss attributable to noncontrolling interest.

NET LOSS ATTRIBUTABLE

TO NONCONTROLLING INTEREST

Net loss attributable

to noncontrolling interest

was $1.8 million

compared to a

$1.6 million net

loss for fiscal

NET INCOME ATTRIBUTABLE

TO CAL-MAINE FOODS, INC.

As a result

of the above,

net income attributable

to Cal-Maine Foods,

Inc. for fiscal

2025 was $1.2

billion, or $25.04

per basic

and $24.95 per diluted share, compared to $277.9 million, or $5.70 per basic and $5.69 per diluted share for fiscal 2024.

Ended June 1, 2024 Compared to Fiscal Year Ended June 3, 2023

The discussion of our results of operations for the fiscal year ended June 1, 2024 compared to the fiscal year ended June 3, 2023

can be found in Part II.

Financial Condition and Results of Operations in

the

Company’s fiscal 2024 Annual Report on Form 10-K.

LIQUIDITY AND CAPITAL RESOURCES

We aim to maintain

a strong balance

sheet and liquidity, particularly

given the cyclical

nature of our

business. We believe a

strong

balance sheet supports our growth opportunities and stockholder returns. Our priorities for the use of cash in

recent periods have

included the payment of

dividends pursuant to our

variable dividend policy, inorganic growth through acquisitions

of businesses,

organic

growth

construction

and

conversion

of

and

in

value-added

and

maintenance capital expenditures.

Working Capital and Current Ratio

Our working

capital at

May 31,

2025 was

$1.7 billion, compared

to $1.0

billion at

June 1,

2024. The

calculation of

working

capital is defined as

current assets less current

liabilities. Our current ratio was

6.4 at May 31,

2025 compared to 5.5

at June 1,

2024. The current ratio is calculated by dividing

current assets by current liabilities. The increase

in our current ratio is primarily

due to the increase in total current assets, which increased by $726.3 million to $2.0 billion at May 31, 2025, due to increases in

cash

and

cash

equivalents

and

available-for-sale.

Due

to

seasonal

factors

described

in

Part I. Item I.

, we generally

expect our

need for working

capital to be

highest in

the fourth and

first fiscal

quarters ending

in May/June and August/September, respectively.

Cash Flows from Operating Activities

Net cash

provided by

operating activities

was $1.2

billion for

fiscal 2025,

compared to

$451.4 million for

fiscal 2024.

The increase

in

cash

flow

from

activities

resulted

from

higher

net

average

selling

prices

per

dozen,

for

conventional eggs, increased volume of sales and

a decrease in feed ingredient costs compared

to the prior year,

partially offset

by the increase in volume and price of outside egg purchases.

Cash Flows from Investing Activities

For fiscal 2025, $575.5 million was

used in investing activities, primarily due

to purchases of investment securities,

purchases of

property, plant and equipment

and the acquisition

of assets of

ISE compared to

$412.6 million used

in investing activities

2024, primarily due to purchases

of investment securities, purchases of

property, plant and equipment and the Fassio acquisition.

Purchases of investment

securities were $1.2

billion in fiscal

2025 compared to

$573.6 million in

fiscal 2024. Sales

and maturities

of investment securities were

$907.6 million in fiscal

2025, compared to $358.9 million

for fiscal 2024. The increase

in sales and

maturities of investment securities is primarily due to the maturities of

short-term investments during fiscal 2025. Cash paid for

business acquisitions was $116.2 million in

fiscal 2025, primarily related to

the ISE acquisition, and

$53.7 million in fiscal 2024,

acquisition. Purchases

of property,

equipment were

$161.3 million

and $147.1

fiscal

2025 and 2024, respectively, primarily reflecting progress on our construction projects.

Cash Flows from Financing Activities

We

paid

dividends

totaling

$330.3

million

and

$91.9

million

in

fiscal

and

2024,

During

fiscal

2025,

we

repurchased $54.0 million

in shares of

Common Stock, primarily

under our share

repurchase program. See

“Share Repurchase

Program,” below.

Increase (decrease) in Cash and Cash Equivalents

As of May 31, 2025, cash increased $261.5 million since June 1, 2024, compared to a $54.9 million decrease

during fiscal 2024.

The increase is primarily due to the increase in net sales during fiscal 2025.

Acquisition of Echo Lake Foods

Subsequent to our fiscal 2025 year-end, we acquired Echo Lake Foods. The purchase price was approximately $258 million and

was funded with available cash on hand. For additional information, refer to Part II. Item 8. Notes to the Consolidated Financial

Statements,

Note 17 – Subsequent Events

.

Credit Facility

On November 15,

2021, we entered

into an Amended

and Restated Credit

Agreement (as amended,

the “Credit Agreement”)

with

a five-year term. The Credit Agreement provides

for a senior secured revolving credit facility

(the “Credit Facility”), in an initial

aggregate principal amount of up to $250 million. As of May 31, 2025, no amounts were borrowed under the Credit Facility. As

of May 31, 2025, we

had $4.7 million in outstanding

standby letters of credit, which

were issued under our Credit

Facility for the

benefit of

certain insurance

companies. On

March 25,

entered into

the Second

Amendment to

Facility to

amend the definition

of Change of

Control to exclude

the conversion of

all outstanding shares

of Class A

Common Stock into

Common Stock.

Refer to

Notes to

the Financial

Statements,

Note 10 – Credit Facility

for further

regarding our long-term debt.

Share Repurchase Program

On

25,

2025,

the

Board

a

new

$500

million

share

The

share

program

authorizes the Company, in management’s discretion, to repurchase Common Stock from time to time for

an aggregate purchase

price up

to $500

million (exclusive

of any

fees, taxes,

commissions or

other expenses

such repurchases),

subject to

market

and

other

The

actual

timing,

number

and

value

of

shares

under

the

program

will

be

determined by

including, but

to, the

market

price of the Common Stock and general market and economic conditions.

The Company expects to strategically and opportunistically repurchase shares from time to time through solicited or unsolicited

transactions in the

open market, in

privately negotiated transactions

or by other

means in accordance

with securities laws.

The

Company expects that share repurchases under the program will be

funded from one or a combination of existing cash balances

and future free

cash flow.

The share repurchase

program does not

obligate the Company

to repurchase any

specific amount of

shares, does

not have an

expiration date, and

may be suspended,

modified or

discontinued at

any time without

prior notice. During

fiscal

2025,

the

Company

$50

million

in

shares

under

the

See

Part II. Item 5. Issuer

Purchases of Equity Securities

and Part II. Item 8. Notes to the Financial Statements,

Note 11 – Equity

for further information.

Dividends

In

with

our

variable

dividend

policy,

we

will

pay

a

cash

dividend

totaling

$114.2

or

approximately $2.362 per share, to holders

of our Common Stock with respect

to our fourth quarter of fiscal

2025. The amount

paid per

share will vary

the number of

outstanding shares on

the record date.

The dividend is

payable on August

19,

2025 to holders of record on August 4, 2025.

Material Cash Requirements

Material cash

requirements for operating

activities primarily consist

of feed

ingredients, processing, packaging

and warehouse

costs, employee related costs, and

other general operating expenses, which

we expect to be paid

from our cash from operations

and cash and investment

securities on hand for

at least the next

12 months. While volatile

egg prices and feed

ingredient costs,

among

other

things, make

long-term predictions

difficult,

we

have

substantial liquid

availability under

our

Credit

Facility to fund future operating requirements.

Our material cash requirements for capital expenditures consist primarily of our projects to increase our cage-free production

capacity. We

continue to monitor the increasing demand for cage-free eggs and to engage with our customers in efforts to help

them achieve their announced timelines for cage-free egg sales. The following table presents material construction

approved as of May 31, 2025 (in thousands):

Project(s) Type

Projected

Completion

Projected Cost

Spent as of

Remaining

Projected Cost

Feed Mill

$

9,800

$

4,936

$

4,864

Egg Products Expansion

19,576

10,958

8,618

Cage-Free Layer & Pullet Houses

219,004

179,281

39,723

$

248,380

$

195,175

$

53,205

31, 2025, we

had $75.5 million

of purchase obligations

outstanding, all of

which is due

within one year.

Purchase

obligations primarily

include contractual

agreements to

purchase feed ingredients

and commitments

to make

capital expenditures.

Timing

of payments

amounts paid

may be

different depending

on the

timing of

the receipt

of goods

or services

or

changes to agreed-upon amounts for some obligations.

We

believe our

current cash

balances, investments,

projected cash

flows from

operations, and

available borrowings

Credit Facility will

be sufficient

to fund our

capital needs for

at least the

next 12 months

and to fund

our capital commitments

currently in place thereafter.

IMPACT OF RECENTLY

ISSUED ACCOUNTING STANDARDS

For information on changes in accounting principles and new accounting principles, see “

New Accounting Pronouncements and

Policies

” in Part II. Item 8. Notes to Consolidated Financial Statements,

Note 1 - Summary of Significant Accounting Policies

.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements

in accordance with U.S. GAAP

requires management to make estimates

and assumptions

that affect the

reported amounts

of assets

and liabilities

at the

date of

the financial

statements and

the reported

amounts of

revenues

and expenses

during the

reporting period. Actual

results could

differ materially

from these

estimates. Critical

accounting estimates

are those estimates made in accordance with GAAP that involve a significant level

of estimation uncertainty and have had or are

reasonably likely to have a

material impact on the financial condition

or results of operations. Our

critical accounting estimates

are described below.

BUSINESS COMBINATIONS

The Company applies the acquisition method of accounting, which requires that once control is obtained, all

the assets acquired

and liabilities assumed, including amounts

attributable to noncontrolling interests, are

recorded at their respective fair

values at

the

date

of acquisition.

The

excess

of

the

price

over

fair

values

of

assets

and

is

as

goodwill.

We

typically use

the income

method approach

for intangible

assets acquired

in a

business combination.

Significant judgment

exists in valuing certain

intangible assets and the

most significant assumptions

requiring judgment involve estimating

the amount

and timing of future

cash flows, growth rates,

discount rates selected to

measure the risks inherent

in the future cash

flows and

the asset’s expected useful lives.

The

fair

values of

identifiable assets

and

liabilities are

determined internally

and

requires estimates

and

the

use

of

various valuation

techniques. When

a market

value is

not readily

available, our

internal valuation

methodology considers

the

remaining estimated life

of the assets

acquired and significant

judgment is required

as management determines

the fair market

value for those assets.

Due

to

inherent

volatile

egg

prices

and

feed

costs,

unanticipated

market

changes, events,

or

circumstances may occur that could affect the estimates and assumptions used, which could result in subsequent impairments.

INVENTORIES

Inventories of eggs, feed, supplies and flocks

are valued principally at the lower of

cost or net realizable value. If market

prices

for eggs

and feed

grains move

substantially lower,

we record

adjustments to

write down

the carrying

values of

feed

inventories to fair market value. The cost associated

with flock inventories, consisting principally of chick

purchases or hatching

costs,

feed,

labor,

contractor

payments

and

costs,

are

accumulated

during

the

hatching

and

growing

periods

of

weeks. Capitalized

flock

costs

are

then

amortized

over

the

flock’s

productive

life,

one

to

two

years. Judgment exists in determining the flock’s

productive life including factors such as laying

rate and egg size, molt cycles,

and customer demand. Furthermore, other factors such as hen type

or weather conditions could affect the productive life.

These

factors could make

our estimates of

productive life differ

materially from actual

results. Flock mortality

is charged to cost

of sales

as

incurred. High

mortality

from

disease

or

extreme

temperatures

will

result

in

abnormal

write-downs

to

flock

inventories. Management

continually

monitors

each

flock

and

attempts

to

take

appropriate

actions

to

minimize

the

risk

of

mortality loss.

GOODWILL

As a result of acquiring businesses,

the Company had $46.8 million of goodwill

as of May 31, 2025, representing

1.5% of total

assets

and

1.8%

of

stockholders’

equity.

is

evaluated

for

annually

(or

more

frequently

if

indicators arise) by first

performing a qualitative assessment

to determine whether a

quantitative goodwill test is

necessary. After

assessing the totality of events or

circumstances, if we determine it is

more likely than not that the

fair value of a reporting

unit

is less

than its

carrying amount,

then we

perform additional

quantitative tests

to determine

the magnitude

of any

impairment.

During

our

annual

test,

which

was

the

first

day

of

the

fourth

quarter,

we

that

goodwill

passed

the

qualitative assessment and therefore no quantitative analysis of goodwill impairment was necessary in fiscal 2025.

The

Company

has

that

all

of

our

locations

share

similar

characteristics

and

support

each

other

in

the

production of eggs and customer support.

Therefore, we aggregate all our locations

as a single reporting unit for

testing goodwill

for

impairment.

When

the

Company

acquires

a

new

location,

we

determine

whether

it

should

be

integrated

into

our

single

reporting unit

or treated

as a separate

reporting unit.

Historically, we have concluded

that acquired

operations should

be integrated

into our single reporting unit due to the

operational changes, redistribution of customers, and significant

changes in management

that occur when we acquire businesses, which result in the acquired operations sharing similar economic characteristics with the

rest of our locations. Once goodwill associated with acquired operations becomes

part of goodwill of our single reporting unit, it

no longer represents the particular acquired operations that gave rise to the goodwill. We

may conclude that a business acquired

in the future should be treated as a separate reporting unit, in which case it would be tested separately for goodwill impairment.

Judgment exists in management’s evaluation of the qualitative factors which include macroeconomic conditions, the current egg

industry environment, cost

inputs such as

feed ingredients and

overall financial performance.

Furthermore, judgment exists

in the

the threshold

of whether

it is

more likely

than not

that the

of a

reporting unit

is less

than its

amount. Uncertainty exists due to uncontrollable events that could occur that could negatively affect our operating conditions.

REVENUE RECOGNITION

Revenue

recognition

is

completed upon

satisfaction of

the

performance obligation

which

occurs

upon

shipment

or

delivery to a customer based on terms of the sale.

Revenues are

recognized in

an amount

that reflects

the net

consideration we

expect to

receive in

exchange for

delivery of

the

products. The Company periodically

offers sales incentives or other

programs such as rebates,

discounts, coupons, volume-based

incentives, guaranteed sales

and other programs.

The Company records

an estimated allowance

for costs associated

with these

programs, which is recorded

as a reduction in

revenue at the time

of sale using historical

trends and projected redemption

rates

of

each program.

regularly reviews

these estimates

and

any difference

estimated costs

realization of these programs would be recognized in the subsequent period.

As the estimates

noted above are

based on historical

information, we do

not believe that

there will be

a material change

in the

estimates and assumptions used to recognize revenue. However, if actual results varied significantly from our estimates, it could

expose us to material gains or losses.

LOSS CONTINGENCIES

The Company evaluates whether a loss contingency exists,

and if the assessment of a

contingency indicates it is probable that a

material loss has been

incurred and the amount

of the loss can

be reasonably estimated, the

estimated loss would be

accrued in

the Company’s financial statements. The Company expenses the costs of litigation as they are incurred.

Except for

the $19.6

million litigation loss

contingency accrual in

there were no

loss contingency accruals

for the

past three fiscal years. Our evaluation of whether loss contingencies exist primarily relates to litigation matters. The

outcome of

litigation is

uncertain due

to, among

other things,

uncertainties regarding

the facts

will be

established during

the proceedings,

uncertainties regarding

how the

law will

be applied

to the

facts established,

and uncertainties

regarding the

calculation of

any

potential damages or

the costs of

any potential injunctive

relief. If the

facts discovered or

assumptions change,

future

accruals

for

loss

contingencies

may

be

required.

Results

of

may

be

materially

affected

by

losses

or

a

loss

contingency accrual resulting from adverse legal proceedings.

INCOME TAXES

We

determine our effective tax

rate by estimating our

permanent differences resulting from

differing treatment of

items for tax

and accounting purposes. Judgment and uncertainty

exist with management’s application of tax regulations

and evaluation of the

more-likely-than-not recognition and measurement thresholds. We are periodically audited by taxing authorities. An adverse tax

settlement could have a negative impact on our effective tax rate and our results of operations.

QUANTITATIVE

AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISKS