CAL-MAINE FOODS INC

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.

Net sales

100.0

%

100.0

%

100.0

%

100.0

%

73.0

%

62.7

%

69.3

%

65.3

%

Gross profit

27.0

%

37.3

%

30.7

%

34.7

%

Selling, general and administrative

10.8

%

8.1

%

9.0

%

8.0

%

(Gain) loss on involuntary conversions

—

%

—

%

(0.4)

%

—

%

(Gain) loss on disposal of fixed assets

0.1

%

—

%

—

%

(0.1)

%

Operating income

16.1

%

29.2

%

22.1

%

26.8

%

Total other income, net

1.6

%

1.1

%

1.6

%

1.3

%

Income before income

taxes

17.7

%

30.3

%

23.7

%

28.1

%

Income tax expense

4.3

%

7.4

%

5.8

%

6.8

%

13.4

%

22.9

%

17.9

%

21.3

%

Less: Income (loss) attributable to

—

%

(0.1)

%

—

%

(0.1)

%

Net income attributable to Cal-Maine

13.4

%

23.0

%

17.9

%

21.4

%

Index

NET SALES

Total

net sales

for the

2026 were

$769.5 million

,

$954.7 million

for the

of

Shell egg

sales represented 84.4%

and 94.6%

of total

net sales

for the

second quarters

2026 and

2025, respectively.

shell egg offerings,

for both branded and private-label products, include specialty and conventional shell eggs.

shell

eggs

include

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.

prepared food

offerings

include

items

such

as

pre-cooked

egg

patties,

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 twenty-six weeks ended November

29, 2025 and November 30, 2024 was

$1.7 billion.

Shell

egg

sales

represented

85.0%

and

94.5%

of

total

net

sales

for

the

weeks

ended

29,

and

November 30, 2024, respectively.

The table below presents net sales in key

categories (in thousands, except

percentage data):

Shell Eggs

$

649,567

$

903,861

(28.1)

%

$

1,438,964

$

1,645,374

(12.5)

%

71,650

10,439

586.4

155,586

19,377

702.9

34,531

30,212

14.3

71,638

56,449

26.9

Other

13,750

10,159

35.3

25,912

19,342

34.0

Total net sales

$

769,498

$

954,671

(19.4)

%

$

$

(2.8)

%

The table below presents an analysis of

our shell egg sales (in thousands, except

percentage data):

Shell egg sales

$

363,865

56.0

%

$

616,891

68.3

%

$

869,806

60.4

%

$

1,101,627

67.0

%

285,702

44.0

286,970

31.7

%

569,158

39.6

543,747

33.0

Total shell egg sales

$

649,567

100.0

%

$

903,861

100.0

%

$

1,438,964

100.0

%

$

1,645,374

100.0

%

Dozens sold

201,963

62.6

%

209,597

63.5

%

401,256

62.7

%

409,586

64.0

%

120,623

37.4

120,247

36.5

238,917

37.3

230,237

36.0

Total dozens sold

322,586

100.0

%

329,844

100.0

%

640,173

100.0

%

639,823

100.0

%

Net average selling price

per dozen

$

1.802

$

2.943

$

2.168

$

2.690

$

2.369

$

2.387

$

2.382

$

2.362

All shell eggs

$

2.014

$

2.740

$

2.248

$

2.572

Shell egg sales

In

the

second

fiscal

2026,

egg

sales

decreased $253.0

or

41.0%,

the

second quarter of fiscal 2025, primarily due to a

38.8

%

decrease in the prices for conventional eggs, which resulted in

a $230.4 million

decrease in net sales and a 3.6%

decrease in the volume

of conventional dozens sold, which resulted

in a $19.9 million decrease

in net sales.

Index

egg

sales

decreased $1.3

or

0.4%, in

the

second

fiscal

2026,

the

second

quarter of fiscal

2025, primarily

due to

a 0.8%

decrease in prices

for specialty

eggs, which resulted

in a

$2.1 million

net sales,

offset by

a 0.3%

the

volume of

specialty eggs

sold, which

resulted in

$1.0 million

See “Executive Overview” above for additional discussion of factors impacting shell

egg sales for the second quarters

of fiscal 2026 and 2025.

For

the

weeks

ended

29,

2025,

egg

sales

decreased $231.8

or

21.0%,

the

same

period

of

fiscal

2025,

due

to

a

the

prices

for

shell

eggs.

Prices for

conventional eggs

decreased 19.4%,

which resulted

in

a $209.5

million

net sales,

and a

2.0%

decrease in the volume of conventional eggs

sold resulted in a $22.4 million decrease

in net sales.

Specialty egg sales increased $25.4 million, or 4.7%, for the twenty-six weeks ended November 29, 2025 compared to

the

same

period

in

fiscal

2025,

due

to

an

the

volume

of

eggs

sold.

The

volume

of

specialty eggs sold increased 3.8%, which resulted in

a $20.5 million increase in net sales,

and the prices for specialty

eggs increased 0.8%, which resulted

in a $4.8 million increase in net sales.

During the first two

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.

Although hybrid

pricing may

reduce our

profitability

when egg

prices are high, compared to pure market-based pricing, it

could enhance our profitability when egg prices are low,

and lead to

reduced volatility in our financial results.

Prepared foods sales

The acquisition

of Echo

positively impacted our

net

sales with

an increase

of $56.6

revenue,

compared to the second quarter

of fiscal 2025.

net

sales increased

$136.2

fiscal

2025,

due to

the

$127.1

million in revenue from the acquisition

of Echo Lake Foods in the first quarter

of fiscal 2026.

Egg products sales

Egg

products sales

increased $4.3

or 14.3%,

in

the

second

fiscal 2026,

the

second

primarily due

to

a 10.1%

the net

price, resulting

in a

$3.0 million

Egg

products sales

increased $15.2

or 26.9%,

primarily due

to

increased net

price. The

net

average

selling

price

increased

17.0%,

resulting

in

a

$10.4

million

in

net

sales,

and

an

8.5%

in

pounds sold, resulted in a $5.6 million

Index

COST OF SALES

consists of costs

directly related to producing, processing and packaging shell

eggs, purchases of shell eggs from

outside sources,

processing and

packing of

prepared foods

and egg

non-egg costs.

Farm production

costs

are those

costs incurred

at

our egg

production facilities,

including feed,

facility (including

labor), hen

amortization and

other

related farm production costs.

The following table presents our cost

of sales (in thousands):

%

Change

%

Change

Farm production

$

263,794

$

258,246

2.1

%

$

523,721

$

499,947

4.8

%

Processing, packaging,

and warehouse - shell

eggs

103,916

98,823

5.2

205,063

190,534

7.6

Egg purchases and other

cost of sales

112,109

198,030

(43.4)

275,703

366,479

(24.8)

57,583

11,626

395.3

122,797

21,741

464.8

24,710

31,904

(22.5)

46,116

58,581

(21.3)

Total cost of sales

$

562,112

$

598,629

(6.1)

%

$

1,173,400

$

1,137,282

3.2

%

Farm production costs (per

dozen produced)

Feed

$

0.477

$

0.483

(1.2)

%

$

0.475

$

0.488

(2.7)

%

Other

$

0.449

$

0.418

7.4

%

$

0.453

$

0.421

7.6

%

Total farm production cost

$

0.926

$

0.901

2.8

%

$

0.928

$

0.909

2.1

%

Dozens produced

289,886

288,035

0.6

%

572,260

554,874

3.1

%

Percent produced to sold

89.9%

87.3%

3.0

%

89.4%

86.7%

3.1

%

Farm

production costs

increased 2.1%

due to

increased production

costs

to

run our

facilities,

specifically

within labor and repairs and maintenance,

partially offset by a 1.2% decrease

in feed costs.

Processing, packaging and

warehouse increased $5.1

as our

processing costs

and packing

materials

cost per

dozen increased 5%

which had a $4.7 million increase

Egg

purchases and

other

cost

of

sales

decreased

$85.9

due

to

a

29.7%

the

price

of

outside egg purchases compared

to the second quarter of fiscal 2025, which resulted

in a $61.0 million decrease in cost

of sales, and a 11.5%

decrease in the volume of outside egg purchases,

compared to the second quarter of fiscal 2025,

which resulted in a $26.6 million decrease

costs

increased primarily

due

to

the

acquisition of

Echo

Lake

Foods

which increased

cost

of

sales

$42.9 million compared to the second

quarter of fiscal 2025.

Farm

production costs

increased 4.8%

due to

eggs

produced, which

in

$15.8

million

increase in cost of sales, and a 2.1% increase in production costs.

This increase was primarily due to the same reasons

as described above.

Processing, packaging and warehouse increased $14.5 million,

as our processing costs and

packing materials

cost per

dozen increased 5% which had

a $9.2 million

increase in cost of sales,

as well as

increase volume of

eggs processed,

which resulted in $3.5 million increase

in cost of sales

Index

Egg

purchases and

other

cost

of

sales

decreased

$90.8

due

to

a

14.9%

the

price

of

outside egg

purchases compared to

the same

prior-year period,

which resulted

in a

$57.3

million decrease in

cost of

sales, and

a

9.6% decrease

in

the

volume

of outside

egg

purchases compared

to

the

same

period, which

resulted in a $41.1 million decrease

costs

increased primarily

due

to

the

acquisition of

Echo

Lake

Foods

which increased

cost

of

sales

$94.6 million compared to the twenty-six weeks

ended November 30, 2024.

Current indications

for corn

and soybean

project a

favorable stocks-to-use ratio

for us

near the levels

prevailing today

for the

remainder of fiscal 2026; however, as

long as outside

factors remain uncertain (including trade and tariff negotiations, weather

patterns and global supply chain disruptions),

volatility could remain.

GROSS PROFIT

Gross profit for the second

quarter of fiscal 2026 was $207.4 million, compared to $356.0 million for

the same period of 2025.

The decrease

was primarily

driven by

26.5% lower

net

prices

for shell

eggs

and 2.2%

lower shell

egg sales

volume,

offset

partially by

lower egg

prices for

outside purchases

and a

3% increase

in

percent produced

to

sold,

as well

as

contributions from prepared

foods.

Gross profit for the twenty-six

weeks ended November 26, 2025 was $518.7

million, compared to $603.3 million

for the same

period of 2026.

The decrease was primarily driven by 12.6% lower net

average selling prices

for shell eggs, offset

partially by

a decrease in the price and

volume of outside egg purchases, as dozens produced increased 3.1%, as well

as contributions from

prepared foods.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling,

general,

and

administrative

(“SGA”)

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. Marketing expense includes

franchise fees tha

t

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

expenses and other

general corporate overhead costs.

The following table presents

an analysis of

our

SGA expenses (in thousands):

$ Change

Delivery expense

$

26,402

$

23,666

$

2,736

11.6

%

Marketing expense

14,686

15,074

(388)

(2.6)

%

Other general and administrative expenses

41,799

38,893

2,906

7.5

%

Total

$

82,887

$

77,633

$

5,254

6.8

%

Delivery expense increased

primarily due to the acquisition of Echo Lake Foods.

In the second quarter of

fiscal 2026, other general

and administrative expenses increased 7.5%,

compared to the prior

year period,

primarily due to the acquisition of Echo Lake Foods and increased

spending in professional and legal fees.

This was partially offset

by a reduced charge

in the change in

earnout liability

recorded in the prior year period

and a

reduction in the accrual for

anticipated employee bonuses compared

to the prior year period.

Index

$ Change

Delivery expense

$

52,445

$

44,730

$

7,715

17.2

%

Marketing expense

29,148

29,426

(278)

(0.9)

%

Other general and administrative

70,808

65,409

5,399

8.3

%

Total

$

152,401

$

139,565

$

12,836

9.2

%

Delivery

expense

increased 17.2%

in

fiscal

2026,

fiscal

This

increase was

due

to

the

acquisition of Echo Lake Foods.

In fiscal 2026, other general and

administrative expenses increased 8.3% in fiscal 2026

compared to fiscal 2025. This

increase was primarily due to the same

reasons as described above.

GAIN ON INVOLUNTARY CONVERSION

In the first quarter of fiscal 2026, we recorded a gain of $7.5 million due to business interruption insurance

recoveries

a weather-related event

that occurred in fiscal 2021.

OPERATING INCOME

For

the

second

quarter

of

fiscal

2026,

we

recorded

income

of

$123.9

to

income

of

$278.1 million for the same period of

For the

ended November 29, 2025,

we recorded operating income

of $373.1

compared to operating

income of $465.0 million for the same

period of fiscal 2025.

OTHER INCOME (EXPENSE)

Total

other

income

(expense)

consists

of

items

not

directly

charged

or

related

to

operations,

such

as

interest

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.

For the second quarter of fiscal 2026,

we earned $12.5 million of interest income compared to $9.9 million for the same period

of fiscal 2025, primarily

due to higher average cash and cash equivalents

and investment securities available-for-sale balances.

The

Company

recorded interest

expense

of

$201

thousand

and $150

thousand

for

the

second quarters

ended

29,

2025 and November 30, 2024, respectively.

For the twenty-six weeks ended November 29, 2025, we earned $25.5 million of interest income compared to $19.9 million for

the same

period of fiscal

2025, primarily due to

higher average cash and

cash equivalents and investment

securities available-

for-sale balances. The Company recorded

interest expense of $351 thousand and $310 thousand for the twenty-six weeks ended

November 29, 2025 and November

30, 2024, respectively.

INCOME TAXES

For

the

second

quarter

of

fiscal

2026,

our

pre-tax

income

was

$136.1

$289.0

million

for

the

second

quarter of fiscal 2025. Income

tax expense of $33.2

million was recorded for second

quarter 2026 with

an effective tax rate

of

24.4%. For the second quarter 2025, income

tax expense was $70.6 million with

an effective tax rate

of 24.4%.

For the

ended November 29,

2025, pre-tax

income was

$399.3 million,

$486.9 million

for the

2025. Income tax

expense of $97.3

million was recorded for

the twenty-six

weeks ended November

29,

2025,

with

an effective

tax

rate of

24.4%. For

the

income tax

expense was

$119.0

million

with an

effective tax rate of 24.4%.

Items causing our effective tax rate to

differ from the federal statutory income tax rate of

21% are state income taxes, offset

by

certain federal tax credits and

certain items included in

income or loss for

financial reporting purposes that

are not included in

Index

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 INCOME ATTRIBUTABLE

TO CAL-MAINE FOODS, INC.

Net

income

Foods,

Inc.

for

the

second

quarter ended

29,

was

$102.8

or

$2.14 per

basic and $2.13

per diluted common share,

compared to net

income attributable to Cal-Maine Foods,

Inc. of

$219.1

million, or $4.49 per basic and $4.47 per

diluted common share,

for the same period of fiscal

attributable to Cal-Maine Foods,

Inc. for the

twenty-six weeks ended

November 29, 2025,

was $302.1 million,

or

$6.27 per

basic and $6.26

per diluted common share,

compared to net

income attributable to Cal-Maine

of $369.0

million or $7.57 per basic and $7.54 per

diluted common share, for the same

period of fiscal 2025.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital and Current Ratio

Our working

capital was

$1.5

billion

at

2025,

$1.7

billion

at

May 31,

The calculation

of

working capital is defined as current assets less current liabilities. Our current ratio was 8.0 at November 29, 2025 compared to

6.4 at

May 31, 2025.

The increase in

our current ratio

is primarily due

to a

decrease in dividends

payables with respect to

our

second quarter 2026. The current

ratio is calculated by dividing current assets by current

liabilities.

Cash Flows from Operating Activities

For the twenty-six weeks ended November 29, 2025, $373.4 million in net cash was provided by operating

activities, compared

to

$240.2

million

provided by

operating activities

for the

comparable period

in

The increase

in

cash flow

from

activities

from

an

in

cash

collections

from

and

the

addition

of

Echo

Lake

Foods.

Cash Flows from Investing Activities

For

the

weeks

ended

29,

2025,

$246.0

million

was

used

in

investing

activities,

due

to

the

acquisitions of

Foods and

Clean Egg

and purchases

of

investment securities, compared

to

$247.4 million

used in

investing activities in the same period of fiscal 2025. Purchases

of investment securities were $345.4 million during the twenty-

six weeks

ended November 29, 2025,

and sales and maturities

of investment securities

were $490.4 million during

the period.

Sales

and

maturities

of

securities

were

$426.5

million

in

the

period

while

purchases

of

securities were $501.6 million

during the period. Cash paid

for business acquisitions,

net of cash acquired, was $299.0

million

in

the

ended November

29, 2025,

the

Foods and

Clean Egg

acquisitions, and

$111.5

the prior-year period,

related to the

ISE acquisition. Purchases of

property, plant

and equipment were

$92.1 million

and $65.6 million in fiscal 2026 and 2025,

respectively, primarily reflecting progress on our

construction projects.

Cash Flows from Financing Activities

For the twenty-six weeks ended November

29, 2025, $255.4 million was used in financing

activities, primarily due to dividends

paid of $180.5 million in

fiscal 2026, compared to $87.8 million in

the same prior-year period. Purchases of common

stock by

treasury were $74.9

million

during the

ended November

29, 2025,

due

to the

repurchase of

common stock

under the Company’s share repurchase

Net Change in Cash and Cash Equivalents

As of November 29, 2025,

cash,

cash equivalents and restricted

cash decreased $128.0 million

since May 31, 2025,

to a decrease of $97.6 million during the same period of fiscal

2025. The decrease is primarily due to the cash paid for the

Echo

Lake Foods acquisition during the first quarter

of fiscal 2026 and higher dividends paid with respect

to our first quarter of fiscal

Credit Facility

On

15,

2021,

we

entered into

a

credit

agreement that

for

a senior

secured revolving

credit

facility

(the

“Credit Facility”),

in

an initial

aggregate principal

amount of

up to

$250 million

with

a five-year

term. As

of November

29,

Index

2025,

no

amounts

were borrowed

under

the

Credit

Facility

and we

had $4.7

million

in outstanding

standby letters

of credit

issued under our Credit Facility for the benefit

of certain insurance companies.

Share Repurchase Program

In February 2025, the Company’s

Board of Directors (“Board”) approved a $500 million

share repurchase program. The share

repurchase program authorizes the Company,

in management’s discretion,

to repurchase Common Stock

from time to

time for

an aggregate

up

to

$500 million

(exclusive of

any fees,

taxes, commissions

or other

expenses related

to such

repurchases), subject to market conditions

and other factors. The actual timing,

number and value of shares

repurchased under

the

program will

be determined

by management

in

its discretion

and will

depend on

a number

of factors,

including,

but not

limited to,

the market price

of the

and general market and

economic conditions.

During the twenty-six

weeks

ended November 29, 2025, the Company repurchased 846,037 shares or approximately $74.8 million under the program. As of

the

end

of

the

second

quarter

of

fiscal

2026,

we

had

remaining

authorization

to

purchase up

to

$375.2

million

under

the

repurchase program. See

Part II. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

for further information.

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 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.

Dividends

In

accordance

with

our

variable

policy,

we

will

pay

a

cash

totaling

approximately

$34.3

or

approximately $0.719 per share,

to holders of our Common Stock with respect

to our second quarter of fiscal

2026. The amount

paid per share will vary based on the number of outstanding shares on the record date. The dividend is payable on February 12,

2026, to holders of record

on January 28, 2026.

Material Cash Requirements

Material cash requirements

for operating activities primarily consist

of feed ingredients,

processing, packaging and warehouse

costs,

employee

related

costs,

maintenance

capital

expenditures

and

other

general

expenses.

Our

cash

requirements for growth capital expenditures consist

primarily of our construction projects

to increase our production

capacity

of prepared foods and cage-free shell

egg production. We

believe our current cash

balances, investments, projected cash flows

from operations,

and available

borrowings under

our Credit

Facility will

be sufficient

to fund

our cash

needs for

at

least the

next 12 months and to fund our capital commitments currently

in place thereafter. Future acquisitions of businesses

may require

additional financing.

IMPACT OF RECENTLY

ISSUED ACCOUNTING

STANDARDS

For information on changes in accounting principles and new

accounting principles,

see “

New Accounting Pronouncements and

Policies”

in

Note 1 - Summary of Significant Accounting Policies

of

the

Notes

to

Condensed

Consolidated

Statements included in this Quarterly

Report.

CRITICAL ACCOUNTING ESTIMATES

Critical accounting

estimates are those

estimates made

in accordance

with U.S.

generally accepted

accounting principles

that

involve

a significant

level of

estimation uncertainty

and have

had or

are

reasonably likely

to

have a

material impact

on

our

financial condition

or results

of operations.

There have

been no

changes to

our critical

estimates identified in

our

2025 Annual Report.