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

%

82.1

%

49.5

%

73.0

%

58.2

%

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

%

7.6

%

35.9

%

14.9

%

27.7

%

Less: Income (loss) attributable to

0.1

%

—

%

—

%

—

%

Net income attributable to Cal-Maine

7.5

%

35.9

%

14.9

%

27.7

%

NET SALES

Total

net sales

for the

fiscal 2026

were $667.0

million, compared to

$1.4 billion

for the

same period

Index

Shell egg sales represented 85.8% and

94.9% of total net

sales for the third

of fiscal 2026 and 2025,

The

shell

egg

offerings,

for

both

branded

and

private-label

include

and

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

2026 and

March 1,

was $2.4

billion

and $3.2

billion,

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):

Shell Eggs

$

572,314

$

1,345,382

(57.5)

%

$

2,011,278

$

2,990,756

(32.8)

%

63,626

11,757

441.2

219,212

31,134

604.1

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

$

(53.0)

%

$

$

(25.3)

%

The table below presents an analysis of

our shell egg sales (in thousands, except

percentage data):

Shell egg sales

$

283,173

49.5

%

$

1,016,438

75.6

%

$

1,152,979

57.3

%

$

2,118,065

70.8

%

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

199,035

61.4

%

213,247

64.3

%

600,291

62.3

%

622,833

64.1

%

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

$

1.423

$

4.766

$

1.921

$

3.401

$

2.313

$

2.784

$

2.358

$

2.505

All shell eggs

$

1.766

$

4.060

$

2.086

$

3.079

Shell egg sales

In the

2026, conventional

egg sales

decreased $733.3 million,

or 72.1%, compared

to the

third

fiscal

2025,

due

to

a

70.1%

the

prices

for

eggs,

which

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,

due

to

a

16.9%

prices

for

eggs,

which

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

See “Executive Overview” above for additional discussion of factors

impacting shell egg sales for the third quarters of

fiscal 2026 and 2025.

For

the

weeks

ended

28,

2026,

egg

sales

decreased

$965.1

or

45.6%,

the

same period

2025,

due to

a 43.5%

the

prices

for conventional

shell

eggs,

which resulted

in

an $888.4

million

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

primarily due to

a 5.9%

decrease in the

prices for specialty

eggs, which

resulted in a

$53.5

million

net

sales,

offset by

a 4.5%

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

historical time periods when wholesale

market prices were

volatile.

Prepared foods sales

In the third quarter of

fiscal 2026, prepared food

sales increased $51.9 million,

compared to the third quarter of

fiscal

an 834.3% increase in pounds

sold which resulted in

a $49.3 million increase in net sales.

The

sales

volume

is

due to

the

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.

Prepared

foods

net

sales

$188.1

to

fiscal

2025,

due

to

the

same

reasons

discussed above.

Egg products sales

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,

offset

by

a

3.6%

the

volume

of

egg

products sales,

resulting

in

a

$706

thousand

increase in net sales.

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 the net average

selling price, resulting in an $18.6

million decrease in net sales, partially

offset by a 6.8% increase in the volume of egg products sales,

resulting in a $6.0

million increase in net sales.

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.

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

$

279,331

$

266,056

5.0

%

$

803,052

$

766,003

4.8

%

Processing, packaging,

and warehouse - shell

eggs

107,788

101,631

6.1

312,851

292,165

7.1

Egg purchases and other

cost of sales

79,517

291,703

(72.7)

355,220

658,182

(46.0)

57,084

12,313

363.6

179,881

34,054

428.2

23,948

29,867

(19.8)

70,064

88,448

(20.8)

Total cost of sales

$

547,668

$

701,570

(21.9)

%

$

1,721,068

$

1,838,852

(6.4)

%

Farm production costs (per

dozen produced)

Feed

$

0.494

$

0.492

0.4

%

$

0.482

$

0.489

(1.4)

%

Other

$

0.456

$

0.418

9.1

%

$

0.454

$

0.420

8.1

%

Total farm production cost

$

0.950

$

0.910

4.4

%

$

0.936

$

0.909

3.0

%

Dozens produced

296,455

293,088

1.1

%

868,715

847,962

2.4

%

Percent produced to sold

91.5%

88.4%

3.5

%

90.1%

87.3%

3.2

%

Farm

production costs

increased 5.0%,

the

2025, primarily

due to

an increase

in

costs

to

run

our

facilities,

specifically

within

labor

and

repairs

and

maintenance,

as

well

as

an

8.7%

in our specialty egg production compared to the same

period in the prior fiscal year.

Processing, packaging and warehouse costs increased

$6.2 million,

compared to the third quarter of fiscal 2025, as our

processing costs

and packing

materials

cost per

dozen increased 6.4%

resulting in

a $6.1

million increase

in

cost of

sales.

Egg

purchases and

other cost

of sales

decreased $212.2

due

to

a

62.7% decrease

in

the

price

of

outside egg purchases compared to the third quarter of fiscal 2025,

which resulted in a $180.7 million decrease in cost

of sales,

and a

12.8% decrease in

the volume

of outside

egg purchases,

2025,

which resulted in a $42.2 million decrease

in cost of sales.

Prepared foods costs increased primarily due

to the increased sales volume which is primarily due to the acquisition of

Echo Lake Foods as well as increased

production at Crepini.

costs increased 4.8%

to a

3.0% increase

in production

costs, which

resulted in

$23.5

million increase in cost of

sales, and a 2.4%

egg production, resulting

in an $18.9

million increase in cost

of sales. This increase was primarily

due to the same reasons as described

above.

Index

Processing, packaging and warehouse increased $20.7

million, as

our processing costs and packing

materials

cost per

dozen increased 5.5% which resulted in

a $15.3 million

increase in cost of sales, as

well as

an increase in the

volume

of eggs processed, which resulted

in $3.6 million increase in cost of sales.

Egg purchases and other cost of sales decreased $303.0 million, compared to the same

prior-year period, primarily due

to a 35.8% decrease in the price of

outside egg purchases,

resulting in a $240.8 million decrease in cost of sales, and a

10.6% decrease in the volume of

outside egg purchases, resulting in a $80.4 million

decrease in cost of sales.

Prepared foods costs increased

primarily due to the same reasons described

above..

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

for the

2026 was

$119.3 million,

compared to $716.1

million for

The decrease was primarily driven by 56.5%

lower net average selling prices

for shell eggs partially offset

by a decrease in the

price and volume of outside egg purchases,

as our percent produced

to sold increased 3.5% to 91.5%.

Gross

profit

for

the

weeks

ended

28,

was

$638.0

$1.3

billion

for

the

same

period of 2025.

The decrease was primarily driven by 32.3% 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 2.4%, 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 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

expenses and other

general corporate overhead costs.

The following table presents

an analysis of

our

SGA expenses (in thousands):

$ Change

$

27,749

$

23,476

$

4,273

18.2

%

Marketing expense

15,424

11,240

4,184

37.2

%

Other general and administrative expenses

40,131

45,251

(5,120)

(11.3)

%

Total

$

83,304

$

79,967

$

3,337

4.2

%

increased 18.2%,

the

third

due to

the

acquisition of

Echo Lake Foods and increased

contract trucking costs.

Marketing

expense

37.2%,

to

the

prior

fiscal

year

period,

due

a

54.8%

in

franchise fees.

Franchise

fees increased

as specialty

dozens sold

increased 5.8%.

In

the

prior fiscal

year

period the

higher prices for conventional eggs compared to

specialty eggs diminished the need to

promote specialty eggs; during

which time,

EB temporarily reduced the related franchise fees for certain specialty egg brands to

encourage continued

production of these branded eggs.

In the

fiscal 2026, other

general and administrative

expenses decreased 11.3%,

compared to the

prior

year period,

to a

reduction in

the accrual for

anticipated employee bonuses

the prior

year

period.

In addition,

there was

an increase

in

the

adjustment

to

the

earnout liability

recorded in

the

prior

period.

This

was

offset

by

professional

and

legal

fees

as

well

as

amortization

of

intangible assets acquired related

to acquisitions during the current

fiscal year.

Index

$ Change

$

80,194

$

68,206

$

11,988

17.6

%

Marketing expense

44,572

40,666

3,906

9.6

%

Other general and administrative

110,939

110,660

0.3

%

Total

$

235,705

$

219,532

$

16,173

7.4

%

Delivery

expense

17.6%

in

fiscal

2026,

to

fiscal

2025,

due

to

the

same

reasons

as

described above

In

fiscal

2026,

marketing

expense

9.6%,

to

fiscal

2025,

due

to

the

same

reasons

as

described above.

Other

general

and

administrative

were

relatively

flat,

to

fiscal

During

fiscal

2026,

we

incurred higher professional and legal fees

primarily related to our acquisitions

made during the current fiscal year

as

well

as increased

amortization of

intangible

assets acquired

which was

offset by

a

reduced charge

in

the

change in

earnout

liability

recorded

in

the

prior

fiscal

year

period

and

a

reduction

in

the

accrual

for

anticipated

employee

bonuses compared to the prior fiscal year

period.

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

related to

a weather-related event

that occurred in fiscal 2021.

OPERATING INCOME

For the

we recorded operating

income of

$35.9 million,

compared to operating

income of

$635.7

million for the same period of fiscal 2025.

For

2026,

we recorded

operating income

of $409.0

income of $1.1 billion for the same period of

OTHER INCOME (EXPENSE)

Total

other

income

(expense)

consists

of

items

not

directly

charged

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.

For the third

quarter of fiscal 2026, we earned $11.4

million of

interest income compared to $12.8

million for the same

period

lower average cash and

cash equivalents and

investment securities available-for-sale balances.

recorded interest expense of

$156 thousand

and $146

thousand for

28, 2026

and March 1, 2025, respectively.

February 28, 2026, we

earned $36.9 million

of interest income compared to $32.6

million for

period of fiscal

higher average cash and

cash equivalents and investment

securities available-

for-sale balances. The Company recorded

interest expense of $507 thousand and $457 thousand for the thirty-nine weeks ended

February 28, 2026 and March 1, 2025, respectively.

INCOME TAXES

For the third

quarter of fiscal 2026, our

pre-tax income was

$58.2 million,

compared to $663.0 million

for the third quarter

of

Income tax

expense of

$7.1 million

was recorded for

the

2026 with

an effective

tax

rate of

12.1%.

This includes the discrete tax benefit of $8.2 million associated with the fiscal 2025 provision-to-return adjustments. Excluding

Index

the

discrete

tax

benefit,

income

tax

expense

was

$15.3

million

with

an

adjusted effective

tax

rate

of

26.2%.

For

the

third

quarter 2025, income tax expense

was $154.9 million with an effective

tax rate of 23.4%.

February 28, 2026,

pre-tax income was $457.5

million, compared to $1.1

billion for the

same

Income tax

expense of $104.4

million was

recorded for the

ended February 28,

with

an

effective

tax

rate

of

22.8%.

This

the

discrete

tax

benefit

of

$8.2

million

associated

with

the

fiscal

provision-to-return adjustments.

Excluding the

discrete tax

benefit, income

tax

expense was

$112.6

million with

an adjusted

effective tax rate of 24.6%.

For the same period

fiscal 2025, income tax expense was $273.9 million

with an effective tax rate

of 23.8%.

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

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 attributable to Cal-Maine Foods, Inc. for the third quarter ended February 28, 2026 was $50.5 million, or $1.07 per

basic and $1.06 per diluted common share, compared to

net income attributable to Cal-Maine Foods, Inc. of

$508.5 million,

or

$10.42 per basic and $10.38 per diluted

common share,

for the same period of fiscal 2025.

Inc. for

2026, was

$352.6 million,

or

$7.37 per

basic and $7.34

per diluted common share,

compared to net

income attributable to Cal-Maine

of $877.6

million or $17.99 per basic and

$17.92 per diluted common share, for

the same period of fiscal

LIQUIDITY AND CAPITAL RESOURCES

Working Capital and Current Ratio

Our

working

capital

was

$1.5

billion

at

28,

2026,

$1.7

billion

at

May

31,

The

calculation

of

working capital is defined as

current assets less current liabilities.

Our current ratio was

8.2 at

6.4 at

May 31,

2025. The increase

in our

current ratio is

to a

decrease in dividends

payable with

respect to

our

third quarter 2026. The current

ratio is calculated by dividing current

assets by current liabilities.

Cash Flows from Operating Activities

February 28, 2026, $476.9

net cash was provided by

operating activities, compared

to

$811.7

million provided

by operating

activities for

the

comparable period

in

The decrease

in

cash

flow from

operating activities resulted primarily from a decrease

in cash collections from customers as a result of decreased

prices of shell

eggs compared to the prior fiscal year

period.

Cash Flows Used in Investing Activities

For

the

28,

2026, $266.5

million

was used

in

investing activities,

primarily relating

to

the

acquisitions of

Foods and

Clean Egg

and purchases

of

investment securities, compared

to

$385.1 million

used in

investing activities in the

same period of fiscal 2025.

Purchases of investment securities were $503.7 million

during the thirty-

nine

weeks

ended

28,

2026,

and

sales

and

maturities

of

securities

were

$659.7

million.

Sales

and

maturities of investment

securities were $654.4

million in the

prior fiscal year

period while purchases of

investment securities

were $813.1

million

during

the

period. Cash

paid

for business

acquisitions,

net

of cash

acquired, was

$299.0

million

in

the

thirty-nine weeks ended February 28, 2026,

related to the Echo Lake

Foods and Clean

Egg acquisitions, and

$116.2 million in

the prior-year period, related

to the ISE acquisition. Purchases of property, plant and equipment were

$123.7 million and $115.4

million in fiscal 2026

and 2025, respectively, primarily reflecting progress

on our construction projects.

Cash Flows Used in Financing Activities

For the thirty-nine weeks ended February 28,

2026, $315.8 million

was used in financing activities, primarily due to

dividends

paid

of

$214.8

million

in

fiscal

2026,

$167.2 million

used in

financing activities

in

the

same

prior

period. Purchases

of common

stock

by

treasury were

$101.0

million

during the

28,

2026,

primarily due to the repurchase

of common stock under the Company’s share repurchase

program.

Index

Net Change in Cash and Cash Equivalents

As of February 28, 2026,

cash,

cash equivalents and restricted cash decreased $105.3 million since May 31, 2025, compared to

an increase of $259.4 million during the same period of fiscal 2025. The

decrease is primarily due to decreased cash collections

from customers as a

result of decreased prices of

shell eggs compared to the

prior year as

well as the use

of cash

for the Echo

Lake Foods and Clean Egg acquisitions

completed during fiscal 2026.

Credit Facility

On

15,

2021,

we

entered into

a

credit

agreement that

for

a senior

secured revolving

credit

(the

“Credit Facility”), in an initial aggregate

principal amount of up to $250 million with a five-year

term. As of February 28, 2026,

no

amounts

were borrowed

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 shares of our common stock from time

to time for an aggregate purchase price 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

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

our

common

stock

and

general market

and

economic

conditions.

During

the

weeks

ended

28,

2026,

the

Company

repurchased

1,175,867

shares

or

$99.2

million

under

the

program. As

of the

end of

the

2026, we

had remaining

authorization to

purchase up

to

$350.8 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

$16.8

or

approximately $0.355 per

share,

to holders

of our

common stock

with respect to

our third

2026. The

amount

paid

per share

will

vary based

on the

number of

outstanding shares

on the

record date.

The dividend

is payable

on

May 14,

2026, to holders of record

on April 29, 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

material

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.

Index

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.