Cal-Maine Foods CALM Form 10-Q filing Q3 FY2026

Page Number

Part I.

Financial Information

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets -

February 28, 2026 and May 31, 2025

3

Condensed Consolidated Statements of Income -

Thirteen and Thirty-nine Weeks Ended February 28, 2026 and March 1, 2025

4

Condensed Consolidated Statements of Comprehensive Income -

Thirteen and Thirty-nine Weeks Ended February 28, 2026 and March 1, 2025

5

Condensed Consolidated Statements of Cash Flows -

Thirty-nine Weeks Ended February 28, 2026 and March 1, 2025

6

Notes to Condensed Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

32

Item 4.

Controls and Procedures

32

Part II.

Other Information

Item 1.

Legal Proceedings

33

ITEM 1.

LEGAL PROCEEDINGS

Refer

to

the

discussion

of

certain

legal

proceedings involving

the

Company

and/or

its

subsidiaries

in

(i)

our

2025

Annual

Report,

Part

I Item

3

Legal Proceedings,

and Part

II Item

8,

Notes to

Consolidated Financial

Statements and

Supplementary

Data,

Note

16

Commitments

and

Contingencies,

and

(ii)

in

this

Quarterly

Report

in

Note 10

- Commitments and

Contingencies

of

the

Notes

to

Condensed Consolidated

Financial

Statements,

which discussions

are

incorporated herein

by

reference.

Item 1A,

“Risk Factors” under

the sub-

heading “Legal and Regulatory Risk

Factors.”

ACQUISITIONS

Subsequent to our

third quarter of fiscal 2026,

effective March 2, 2026,

we acquired the shell

egg, egg products, and prepared

foods

assets

of

Creighton

Brothers

LLC,

including

Crystal

Lake

LLC,

for

a

total

purchase

price

of

approximately

$128.5

Index

23

million, subject

to customary post-closing adjustments.

See further discussion in

Note 11 - Subsequent Events

of the Notes

to

Condensed Consolidated Financial Statements

included in this Quarterly

Report.

Effective October 10, 2025, the Company acquired certain

assets of Clean Egg, LLC (“Clean Egg”) based

in Langwood, Texas,

for approximately $23.7 million. The

assets acquired included 677 thousand

brown cage-free and free-range layers and

pullets

and other inventory,

machinery and equipment related to its

processing facility and contract production.

See further discussion

in

Note 2 – Acquisitions

of the Notes to Condensed Consolidated

Financial Statements included

in this Quarterly Report.

Effective June

2,

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 prepared foods, including

waffles, pancakes, scrambled eggs, frozen

cooked omelets, egg patties, toast

and diced

eggs.

The

acquisition

has expanded

our prepared

foods

product line

and

customer base.

See

further discussion

in

Note 2 – Acquisitions

of the

Notes to

Condensed Consolidated

Financial Statements

included in

this

Quarterly Report.

Our

previously announced projects to increase

efficiency and expand production capacity are ongoing and expected

to be completed

in

fiscal 2027.

While these

initiatives are

underway and

are expected

to

drive higher

output, improve

efficiency and

provide

greater operational

flexibility once

complete, Echo

Lake Foods

has and

will experience

a temporary

reduction in

production

volumes

and

higher

costs,

which

began

late

in

the

second

quarter of

fiscal

2026

and

are

expected to

continue

through

the

remainder of fiscal 2026.

During the

third quarter of

fiscal 2025, we

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

operations.

During

the

second

quarter

of

fiscal

2025,

we

completed

a

strategic

investment

with

Crepini

LLC,

establishing

a

new

egg

products 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 combined entity,

located

in

Hopewell

Junction,

New

York,

operates

as

Crepini

Foods

LLC

(“Crepini”).

We

capitalized

Crepini

with

approximately $6.75

million in

cash to

purchase additional equipment

and other

assets and

fund working

capital in

exchange

for a 51% interest 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

MeadowCreek

Foods,

LLC

(“MeadowCreek”), which

became

a

majority-owned subsidiary of

the Company.

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

first quarter of

fiscal 2025,

we acquired substantially

all the

commercial shell 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 production

and processing

facilities

with

a capacity

at

the

time

of acquisition

of approximately

4.7

million

laying

hens, including 1.0 million cage-free, and 1.2

million pullets, feed mills,

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 were

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.

EXECUTIVE OVERVIEW

For

the

third

quarter and

the

first

thirty-nine

weeks of

fiscal 2026,

we recorded

a gross

profit

of $119.3

million

and $638.0

million, respectively,

compared to $716.1

million and $1.3

billion, respectively,

for the same periods

of fiscal

2025, primarily

driven by a decrease

in the net average selling price of shell eggs, particularly

conventional eggs.

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

in

the

prior-year period.

Average

conventional egg

prices per

dozen declined

70.1% to

$1.423 from

$4.766 in

the

prior-year

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

for the third quarter of fiscal

2026 decreased 2.2% compared

to the third quarter of fiscal 2025.

Wholesale shell

egg prices are

volatile, cyclical,

and impacted

by

a number

of factors,

including

consumer demand, seasonal

fluctuations, the

number and

productivity of

laying hens

in the

U.S., outbreaks

of agricultural

diseases such

as HPAI,

severe

weather patterns and

retailers go-to-market strategies and how

they manage their inventories.

We

believe the

recent decline in

Index

24

wholesale egg

prices primarily

reflects improved

egg supply,

following

disruptions

associated with

HPAI

in

the

prior

fiscal

year. Compared to

the same period last year,

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

availability

relative to

the

prior

fiscal year

period

appears to

have

reduced the

need

for

accelerated purchasing

or inventory

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

shell egg prices have declined, while retail shell egg prices

have adjusted more gradually.

The daily

average price

for

the

Urner Barry

Southeast

Large Index

in

the

third

quarter

of fiscal

2026

fell

78.6%, while

the

USDA daily average price

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

period last year.

According to the

USDA, the monthly

average size of the

layer hen flock

from December 2025

through February 2026

(which

most

closely aligns

with

our

third

fiscal quarter)

was approximately

310.8

million

hens, an

increase

of 6.7

million

hens, or

2.2%,

compared

to

the

same

period

in

the

previous

year.

During

the

third

quarter

of

fiscal

2026,

13.2

million

hens

were

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

depopulations.

For more information about historical shell egg prices, see

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

Report.

Prepared food sales

for the

third quarter

of fiscal

2026 increased

$51.9 million,

compared to

the third

quarter of

fiscal 2025,

primarily due to our acquisition of Echo Lake

Foods in the first quarter

of fiscal 2026.

Our farm

production costs

per dozen

produced for

the

third quarter

of fiscal

2026 increased

4.4%, or

$0.04 compared to

the

prior year

period, primarily

due to

higher other

farm production

costs. Other

farm production

costs increased 9.1%

primarily

due

to

high

facility

costs

compared

to

the

comparable

period

in

the

prior

year.

Feed

costs

per

dozen

produced

remained

relatively flat

in the

third quarter of

fiscal 2026,

compared to the third

quarter of fiscal

2025. For information

about historical

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

our 2025 Annual Report.

Our prepared foods cost of sales increased $44.8

million for the third quarter of

fiscal 2026,

compared to the prior-year period,

primarily due to the acquisition of

Echo Lake Foods.

RESULTS OF OPERATIONS

The following table sets

forth, for the periods indicated, certain items

from our Condensed Consolidated Statements of Income

expressed as a percentage

of net sales.

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Net sales

100.0

%

100.0

%

100.0

%

100.0

%

Cost of sales

82.1

%

49.5

%

73.0

%

58.2

%

Gross profit

17.9

%

50.5

%

27.0

%

41.8

%

Selling, general and administrative

12.5

%

5.6

%

10.0

%

7.0

%

(Gain) loss on involuntary conversions

(0.1)

%

—

%

(0.3)

%

—

%

(Gain) loss on disposal of fixed assets

0.1

%

—

%

0.1

%

—

%

Operating income

5.4

%

44.9

%

17.2

%

34.8

%

Total other income, net

3.3

%

1.9

%

2.1

%

1.6

%

Income before income

taxes

8.7

%

46.8

%

19.3

%

36.4

%

Income tax expense

1.1

%

10.9

%

4.4

%

8.7

%

Net income

7.6

%

35.9

%

14.9

%

27.7

%

Less: Income (loss) attributable to

noncontrolling interest

0.1

%

—

%

—

%

—

%

Net income attributable to Cal-Maine

Foods, Inc.

7.5

%

35.9

%

14.9

%

27.7

%

NET SALES

Total

net sales

for the

third quarter of

fiscal 2026

were $667.0

million, compared to

$1.4 billion

for the

same period

of fiscal

Index

25

Shell egg sales represented 85.8% and

94.9% of total net

sales for the third

quarters

of fiscal 2026 and 2025,

respectively.

The

Company’s

shell

egg

offerings,

for

both

branded

and

private-label

products,

include

specialty

and

conventional

shell

eggs.

Specialty

shell

eggs

include

cage-free,

organic,

brown,

free-range,

pasture-raised

and

nutritionally

enhanced

shell

eggs.

Conventional shell eggs sales represent all

other shell egg sales not

sold as specialty shell eggs.

The Company’s

prepared food

offerings

include

items

such

as

pre-cooked

egg

patties,

omelets,

folded

and

scrambled

egg

formats,

hard-cooked

eggs,

pancakes, waffles, and specialty wraps.

Egg product offerings include liquid and frozen

egg products. Other sales represent

feed

sales, miscellaneous byproducts and resale

products.

Total

net sales

for both

the thirty-nine

weeks ended

February 28,

2026 and

March 1,

2025

was $2.4

billion

and $3.2

billion,

respectively.

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

and March 1,

2025, respectively.

The table below presents net sales in key

categories (in thousands, except

percentage data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

% Change

February 28, 2026

March 1, 2025

% Change

Shell Eggs

$

572,314

$

1,345,382

(57.5)

%

$

2,011,278

$

2,990,756

(32.8)

%

Prepared foods

63,626

11,757

441.2

219,212

31,134

604.1

Egg products

18,360

49,267

(62.7)

89,998

105,716

(14.9)

Other

12,651

11,279

12.2

38,563

30,621

25.9

Total net sales

$

666,951

$

1,417,685

(53.0)

%

$

2,359,051

$

3,158,227

(25.3)

%

The table below presents an analysis of

our shell egg sales (in thousands, except

percentage data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Shell egg sales

Conventional

$

283,173

49.5

%

$

1,016,438

75.6

%

$

1,152,979

57.3

%

$

2,118,065

70.8

%

Specialty

289,141

50.5

328,944

24.4

%

858,299

42.7

872,691

29.2

Total shell egg sales

$

572,314

100.0

%

$

1,345,382

100.0

%

$

2,011,278

100.0

%

$

2,990,756

100.0

%

Dozens sold

Conventional

199,035

61.4

%

213,247

64.3

%

600,291

62.3

%

622,833

64.1

%

Specialty

125,024

38.6

118,148

35.7

363,941

37.7

348,385

35.9

Total dozens sold

324,059

100.0

%

331,395

100.0

%

964,232

100.0

%

971,218

100.0

%

Net average selling price

per dozen

Conventional

$

1.423

$

4.766

$

1.921

$

3.401

Specialty

$

2.313

$

2.784

$

2.358

$

2.505

All shell eggs

$

1.766

$

4.060

$

2.086

$

3.079

Shell egg sales

Third Quarter – Fiscal 2026 vs. Fiscal 2025

In the

third quarter

of fiscal

2026, conventional

egg sales

decreased $733.3 million,

or 72.1%, compared

to the

third

quarter of

fiscal

2025,

primarily

due

to

a

70.1%

decrease in

the

prices

for

conventional

eggs,

which

resulted

in

a

$665.4 million decrease in net sales,

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

in

a $67.7 million decrease in net sales.

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

of

fiscal

2025,

primarily

due

to

a

16.9%

decrease in

prices

for

specialty

eggs,

which

resulted

in

a

$58.9

million

decrease in net sales,

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

in a $19.1

million increase in net sales.

Index

26

See “Executive Overview” above for additional discussion of factors

impacting shell egg sales for the third quarters of

fiscal 2026 and 2025.

Thirty-nine weeks – Fiscal 2026 vs.

Fiscal 2025

For

the

thirty-nine

weeks

ended

February

28,

2026,

conventional

egg

sales

decreased

$965.1

million,

or

45.6%,

compared to

the

same period

of fiscal

2025,

primarily

due to

a 43.5%

decrease in

the

prices

for conventional

shell

eggs,

which resulted

in

an $888.4

million

decrease in

net

sales,

and a

3.6% decrease in

the

volume

of conventional

eggs sold,

which resulted in a $76.7 million

decrease in net sales.

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

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

the same

period of

fiscal 2025,

primarily due to

a 5.9%

decrease in the

prices for specialty

eggs, which

resulted in a

$53.5

million

decrease in

net

sales,

partially

offset by

a 4.5%

increase in

the

volume

of

specialty eggs

sold,

which

resulted in a $39.0 million increase

in net sales.

During the first three quarters of fiscal 2026, a

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

that takes into account both our cost of production

as well as wholesale market prices,

instead of solely market-based pricing,

in

response to

customer demand.

We

believe the

hybrid pricing

arrangement may

help some

customers better

plan and

manage

their businesses

and reinforces

our role

as a

trusted

supplier as

well

as reduce

volatility in

our financial

results

compared to

historical time periods when wholesale

market prices were

volatile.

Prepared foods sales

Third Quarter – Fiscal 2026 vs. Fiscal 2025

In the third quarter of

fiscal 2026, prepared food

sales increased $51.9 million,

compared to the third quarter of

fiscal

2025, primarily due to

an 834.3% increase in pounds

sold which resulted in

a $49.3 million increase in net sales.

The

increase in

sales

volume

is

primarily

due to

the

acquisition

of Echo

Lake Foods,

which

was completed

in

the

first

quarter of fiscal 2026 as well as

a nine-fold increase in sales volume at

Crepini.

Thirty-nine weeks – Fiscal 2026 vs.

Fiscal 2025

Prepared

foods

net

sales

increased

$188.1

million,

compared

to

fiscal

2025,

primarily

due

to

the

same

reasons

discussed above.

Egg products sales

Third Quarter – Fiscal 2026 vs. Fiscal 2025

In the third quarter of fiscal 2026, egg

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

of fiscal 2025, primarily due to a 60.7%

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

in

net

sales,

partially

offset

by

a

3.6%

increase in

the

volume

of

egg

products sales,

resulting

in

a

$706

thousand

increase in net sales.

Thirty-nine weeks – Fiscal 2026 vs.

Fiscal 2025

For the thirty-nine weeks ended February

28, 2026, egg products sales decreased

$15.7 million, or 14.9%, compared to

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

27

COST OF SALES

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

products,

and other

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):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28,

2026

March 1, 2025

%

Change

February 28,

2026

March 1, 2025

%

Change

Cost of sales

Farm production

$

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)

Prepared foods

57,084

12,313

363.6

179,881

34,054

428.2

Egg products

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

%

Third Quarter – Fiscal 2026 vs. Fiscal 2025

Farm

production costs

increased 5.0%,

compared to

the

third quarter

of fiscal

2025, primarily

due to

an increase

in

production

costs

to

run

our

facilities,

specifically

within

labor

and

repairs

and

maintenance,

as

well

as

an

8.7%

increase

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

million,

primarily

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,

compared to

the third

quarter of fiscal

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.

Thirty-nine weeks – Fiscal 2026 vs.

Fiscal 2025

Farm production

costs increased 4.8%

primarily due

to a

3.0% increase

in production

costs, which

resulted in

$23.5

million increase in cost of

sales, and a 2.4%

increase in

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

28

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

Gross profit

for the

third quarter

of fiscal

2026 was

$119.3 million,

compared to $716.1

million for

the same

period of

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

thirty-nine

weeks

ended

February

28,

2026

was

$638.0

million,

compared to

$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”)

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. 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):

Thirteen Weeks Ended

February 28, 2026

March 1, 2025

$ Change

% Change

Delivery expense

$

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

%

Third Quarter – Fiscal 2026 vs. Fiscal 2025

Delivery expense

increased 18.2%,

compared to

the

third

quarter of

fiscal 2025,

primarily

due to

the

acquisition of

Echo Lake Foods and increased

contract trucking costs.

Marketing

expense

increased

37.2%,

compared

to

the

prior

fiscal

year

period,

primarily

due

a

54.8%

increase

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

third quarter of

fiscal 2026, other

general and administrative

expenses decreased 11.3%,

compared to the

prior

year period,

primarily due

to a

reduction in

the accrual for

anticipated employee bonuses

compared to

the prior

year

period.

In addition,

there was

an increase

in

the

adjustment

to

the

earnout liability

recorded in

the

prior

fiscal year

period.

This

was

partially

offset

by

increased

professional

and

legal

fees

as

well

as

increased

amortization

of

intangible assets acquired related

to acquisitions during the current

fiscal year.

Index

29

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

$ Change

% Change

Delivery expense

$

80,194

$

68,206

$

11,988

17.6

%

Marketing expense

44,572

40,666

3,906

9.6

%

Other general and administrative

expenses

110,939

110,660

279

0.3

%

Total

$

235,705

$

219,532

$

16,173

7.4

%

Thirty-nine weeks – Fiscal 2026 vs.

Fiscal 2025

Delivery

expense

increased

17.6%

in

fiscal

2026,

compared

to

fiscal

2025,

primarily

due

to

the

same

reasons

as

described above

In

fiscal

2026,

marketing

expense

increased

9.6%,

compared

to

fiscal

2025,

primarily

due

to

the

same

reasons

as

described above.

Other

general

and

administrative

expenses

were

relatively

flat,

compared

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

third quarter of

fiscal 2026,

we recorded operating

income of

$35.9 million,

compared to operating

income of

$635.7

million for the same period of fiscal 2025.

For

the thirty-nine

weeks ended

February 28,

2026,

we recorded

operating income

of $409.0

million,

compared to

operating

income of $1.1 billion 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 third

quarter of fiscal 2026, we earned $11.4

million of

interest income compared to $12.8

million for the same

period

of fiscal

2025, primarily due to

lower average cash and

cash equivalents and

investment securities available-for-sale balances.

The Company

recorded interest expense of

$156 thousand

and $146

thousand for

the third

quarters

ended February

28, 2026

and March 1, 2025, respectively.

For the thirty-nine weeks ended

February 28, 2026, we

earned $36.9 million

of interest income compared to $32.6

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 $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

fiscal 2025.

Income tax

expense of

$7.1 million

was recorded for

the

third quarter

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

30

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%.

For the thirty-nine weeks ended

February 28, 2026,

pre-tax income was $457.5

million, compared to $1.1

billion for the

same

period of

fiscal 2025.

Income tax

expense of $104.4

million was

recorded for the

thirty-nine weeks

ended February 28,

2026

with

an

effective

tax

rate

of

22.8%.

This

includes

the

discrete

tax

benefit

of

$8.2

million

associated

with

the

fiscal

2025

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.

Net income

attributable to

Cal-Maine Foods,

Inc. for

the thirty-nine

weeks ended

February 28,

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

Foods, Inc.

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

February

28,

2026,

compared to

$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

February 28, 2026

compared to

6.4 at

May 31,

2025. The increase

in our

current ratio is

primarily due

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

For the thirty-nine weeks ended

February 28, 2026, $476.9

million in

net cash was provided by

operating activities, compared

to

$811.7

million provided

by operating

activities for

the

comparable period

in

fiscal 2025.

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

thirty-nine weeks

ended February

28,

2026, $266.5

million

was used

in

investing activities,

primarily relating

to

the

acquisitions of

Echo Lake

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

February

28,

2026,

and

sales

and

maturities

of

investment

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,

compared to

$167.2 million

used in

financing activities

in

the

same

prior

fiscal year

period. Purchases

of common

stock

by

treasury were

$101.0

million

during the

thirty-nine weeks

ended February

28,

2026,

primarily due to the repurchase

of common stock under the Company’s share repurchase

program.

Index

31

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

November

15,

2021,

we

entered into

a

credit

agreement that

provides

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 February 28, 2026,

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 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

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

our

common

stock

and

general market

and

economic

conditions.

During

the

thirty-nine

weeks

ended

February

28,

2026,

the

Company

repurchased

1,175,867

shares

or

approximately

$99.2

million

under

the

program. As

of the

end of

the

third quarter

of fiscal

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

dividend

policy,

we

will

pay

a

cash

dividend

totaling

approximately

$16.8

million,

or

approximately $0.355 per

share,

to holders

of our

common stock

with respect to

our third

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

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

operating

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

Financial

Statements included in this Quarterly

Report.

Index

32

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

accounting

estimates identified in

our

2025 Annual Report.

ITEM 2. UNREGISTERED SALES OF

EQUITY SECURITIES AND USE

OF PROCEEDS

The following table is a summary of our

third quarter fiscal

2026 share repurchases:

Issuer Purchases of Equity Securities

Total

Number of

Maximum Approximate

Shares Purchased

Dollar Value of

Total

Number

Average

as Part of Publicly

Shares that May Yet

of Shares

Price Paid

Announced Plans

Be Purchased Under

Period

Purchased (a)

per Share

Or Programs

the Plans or Programs (b)

11/30/25 to 12/27/25

—

$

—

—

$

—

12/28/25 to 01/24/26

354,864

73.63

329,830

350,841,356

01/25/26 to 02/28/26

—

—

—

—

354,864

$

73.63

329,830

$

350,841,356

(a)

As permitted

under our

Amended and

Restated 2012

Omnibus Long-Term

Incentive Plan,

25,034 shares

were withheld

by us

to satisfy

tax withholding

obligations for employees in connection

with the vesting of restricted

common stock.

(b)

In

February

2025,

the

Company

announced

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 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET

RISK

There have been no material changes

in our exposure to market risk during the

thirty-nine weeks ended

February 28, 2026 from

the information provided in Part II Item 7A,

Quantitative and Qualitative

Disclosures About Market Risk

in our 2025 Annual

Report.

ITEM 4.

CONTROLS

AND

PROCEDURES

Disclosure Controls and Procedures

Our disclosure

controls and procedures are designed

to provide reasonable assurance that

information required to

be disclosed

by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time

periods specified

in

the

SEC’s

rules and

forms. Disclosure controls

and procedures

include,

without

limitation,

controls and

procedures designed

to

ensure that

information required

to be

disclosed by

us in

the

reports that

we file

or submit

under the

Exchange Act

is

accumulated and

communicated

to

management,

including

our

principal

executive

and

principal

financial

officers, or persons performing similar functions,

as appropriate to allow timely decisions regarding required disclosure. Based

on

an

evaluation

of

our

disclosure

controls

and

procedures

conducted

by

our

Chief

Executive

Officer

and

Chief

Financial

Officer,

together

with

other

financial

officers,

such

officers

concluded

that

our

disclosure

controls

and

procedures

were

effective as of February 28, 2026 at the reasonable

assurance level.

Changes in Internal Control Over

Financial Reporting

There was no change

in our internal

control over financial reporting that

occurred during the quarter

ended February 28,

2026

that

has

materially

affected,

or

is

reasonably

likely

to

materially

affect,

our

internal

control

over

financial

reporting.

As

disclosed elsewhere in this Quarterly Report,

we completed the acquisition of Echo Lake Foods during the first quarter of fiscal

As

permitted

by

SEC

guidance,

the

scope

of

management’s

review

of

its

internal

control

over

financial

reporting

excluded Echo Lake Foods.

Index

33

PART

II. OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

Refer

to

the

discussion

of

certain

legal

proceedings involving

the

Company

and/or

its

subsidiaries

in

(i)

our

2025

Annual

Report,

Part

I Item

3

Legal Proceedings,

and Part

II Item

8,

Notes to

Consolidated Financial

Statements and

Supplementary

Data,

Note

16

Commitments

and

Contingencies,

and

(ii)

in

this

Quarterly

Report

in

Note 10

- Commitments and

Contingencies

of

the

Notes

to

Condensed Consolidated

Financial

Statements,

which discussions

are

incorporated herein

by

reference.

ITEM 1A.

RISK

FACTORS

Except as set forth in our quarterly report on Form 10-Q for the quarter ended November 29, 2025, there have been no material

changes in the risk factors previously disclosed

in the 2025 Annual Report.

ITEM 2. UNREGISTERED SALES OF

EQUITY SECURITIES AND USE

OF PROCEEDS

The following table is a summary of our

third quarter fiscal

2026 share repurchases:

Issuer Purchases of Equity Securities

Total

Number of

Maximum Approximate

Shares Purchased

Dollar Value of

Total

Number

Average

as Part of Publicly

Shares that May Yet

of Shares

Price Paid

Announced Plans

Be Purchased Under

Period

Purchased (a)

per Share

Or Programs

the Plans or Programs (b)

11/30/25 to 12/27/25

—

$

—

—

$

—

12/28/25 to 01/24/26

354,864

73.63

329,830

350,841,356

01/25/26 to 02/28/26

—

—

—

—

354,864

$

73.63

329,830

$

350,841,356

(a)

As permitted

under our

Amended and

Restated 2012

Omnibus Long-Term

Incentive Plan,

25,034 shares

were withheld

by us

to satisfy

tax withholding

obligations for employees in connection

with the vesting of restricted

common stock.

(b)

In

February

2025,

the

Company

announced

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 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.

ITEM 5.

OTHER INFORMATION

During the

third quarter

of fiscal

2026, no

director or officer

of the

Company

adopted

or

terminated

any Rule

10b5-1 trading

arrangement or

non-Rule

10b5-1

trading arrangement, as such

terms are defined in Item 408(a)

of Regulation S-K.

Index

34

ITEM 6. EXHIBITS

Exhibits

No.

Description

2.1

Echo Lake Foods Purchase Agreement (incorporated by reference to Exhibit 10.5 to the Registrant’s Form

10-Q, filed April 8, 2025)

3.1

Fourth Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to

Exhibit 4.1 in the Registrant’s Form S-3, filed April 15, 2025, Registration No. 333-286548)

3.2

Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the

Registrant’s Form 8-K, filed March 27, 2025)

31.1*

Rule 13a-14(a) Certification of the Chief Executive Officer

31.2*

Rule 13a-14(a) Certification of the Chief Financial Officer

32**

Section 1350 Certification of the Chief Executive Officer and the Chief Financial Officer

101.SCH*+

Inline XBRL Taxonomy Extension Schema Document

101.CAL*+

Inline XBRL Taxonomy Extension Calculation Linkbase

Document

101.DEF*+

Inline XBRL Taxonomy Extension Definition Linkbase

Document

101.LAB*+

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*+

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data

File (formatted as Inline XBRL and contained in

Exhibit 101)

Filed herewith as an Exhibit.

**

Furnished herewith as an Exhibit.

Submitted electronically with this Quarterly

Report.

Index

35

໿

Date:

April 1, 2026

/s/ Matthew S. Glover

Matthew S. Glover

Vice President – Accounting

(Principal Accounting Officer)

໿

ITEM 1.

FINANCIAL STATEMENTS

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Balance

Sheets

(In thousands, except for par value

amounts)

(Unaudited)

February 28, 2026

May 31, 2025

Assets

Current assets:

Cash and cash equivalents

$

392,159

$

499,392

Investment securities available-for-sale

759,768

892,708

Trade and other receivables, net

185,176

259,304

Income tax receivable

49,722

13,057

Inventories

348,910

295,670

Prepaid expenses and other current

assets

13,751

7,979

Total current assets

1,749,486

1,968,110

Property, plant & equipment, net

1,221,162

1,026,684

Investments in unconsolidated entities

9,182

11,095

Goodwill

87,059

46,776

Intangible assets, net

53,361

15,157

Other long-term assets

19,011

16,797

Total Assets

$

3,139,261

$

3,084,619

Liabilities and Stockholders’

Equity

Current liabilities:

Accounts payable

$

106,494

$

101,033

Accrued wages and benefits

36,618

60,263

Dividends payable

16,841

114,163

Accrued expenses and other

liabilities

53,025

32,912

Total current liabilities

212,978

308,371

Other noncurrent liabilities

34,625

55,582

Deferred income taxes, net

184,526

154,651

Total liabilities

432,129

518,604

Commitments and contingencies - see

Note 10

—

—

Stockholders’ equity:

Common stock ($

0.01

par value) - authorized

120,000

shares, issued

75,061

shares

751

751

Paid-in capital

84,382

80,845

Retained earnings

2,800,993

2,565,928

Accumulated other comprehensive

income (loss), net of tax

1,404

(1,007)

Common stock in treasury at cost –

27,686

shares at February 28, 2026 and

26,567

shares at May 31, 2025

(187,362)

(85,893)

Total Cal-Maine Foods, Inc. stockholders’ equity

2,700,168

2,560,624

Noncontrolling interest in consolidated

entity

6,964

5,391

Total stockholders’ equity

2,707,132

2,566,015

Total Liabilities and Stockholders’ Equity

$

3,139,261

$

3,084,619

See Notes to Condensed Consolidated Financial Statements.

Index

4

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of

Income

(In thousands, except per share amounts)

(Unaudited)

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Net sales

$

666,951

$

1,417,685

$

2,359,051

$

3,158,227

Cost of sales

547,668

701,570

1,721,068

1,838,852

Gross profit

119,283

716,115

637,983

1,319,375

Selling, general and administrative

83,304

79,967

235,705

219,532

(Gain) loss on involuntary conversions

(480)

—

(7,968)

156

(Gain) loss on disposal of fixed assets

515

478

1,249

(1,001)

Operating income

35,944

635,670

408,997

1,100,688

Other income (expense):

Interest income, net

11,268

12,628

36,384

32,183

Patronage dividends

11,670

11,197

11,670

11,197

Other, net

(696)

3,534

479

5,875

Total other income, net

22,242

27,359

48,533

49,255

Income before income

taxes

58,186

663,029

457,530

1,149,943

Income tax expense

7,068

154,876

104,378

273,841

Net income

51,118

508,153

353,152

876,102

Less: Income (loss) attributable to noncontrolling

interest

659

(380)

594

(1,471)

Net income attributable to Cal-Maine Foods,

Inc.

$

50,459

$

508,533

$

352,558

$

877,573

Net income per common share:

Basic

$

1.07

$

10.42

$

7.37

$

17.99

Diluted

$

1.06

$

10.38

$

7.34

$

17.92

Weighted average shares outstanding:

Basic

47,299

48,798

47,866

48,774

Diluted

47,414

48,971

48,003

48,962

See Notes to Condensed Consolidated Financial Statements.

Index

5

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of

Comprehensive Income

(In thousands)

(Unaudited)

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Net income

$

51,118

$

508,153

$

353,152

$

876,102

Other comprehensive income, before

tax:

Unrealized holding gain on available-for-

sale securities, net of reclassification

adjustments

103

200

3,183

1,342

Income tax expense related

to items of other

comprehensive income

(25)

(49)

(772)

(326)

Other comprehensive income, net

of tax

78

151

2,411

1,016

Comprehensive income

51,196

508,304

355,563

877,118

Less: Comprehensive income (loss)

attributable to the noncontrolling interest

659

(380)

594

(1,471)

Comprehensive income attributable to

Cal-

Maine Foods, Inc.

$

50,537

$

508,684

$

354,969

$

878,589

See Notes to Condensed Consolidated Financial Statements.

Index

6

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of

Cash Flows

(In thousands)

(Unaudited)

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

Cash flows from operating activities:

Net income

$

353,152

$

876,102

Depreciation and amortization

90,294

69,430

Deferred income taxes

29,127

(14,749)

Other adjustments, net

4,349

(119,057)

Net cash provided by operations

476,922

811,726

Cash flows from investing activities:

Purchases of investment securities

(503,677)

(813,130)

Sales and maturities of investment securities

659,728

654,392

Distributions from unconsolidated entities

—

1,550

Acquisition of businesses, net of cash acquired

(299,010)

(116,193)

Purchases of property, plant and equipment

(123,708)

(115,395)

Net proceeds from disposal of property, plant and equipment

191

3,650

Net cash used in investing activities

(266,476)

(385,126)

Cash flows from financing activities:

Payments of dividends

(214,796)

(160,805)

Purchase of common stock by treasury

(100,996)

(3,953)

Principal payments on long-term debt

—

(2,481)

Net cash used in financing activities

(315,792)

(167,239)

Net change in cash, cash

equivalents and restricted cash

(105,346)

259,361

Cash, cash equivalents and restricted

cash at beginning of period

499,392

237,878

Cash, cash equivalents and restricted

cash at end of period

$

394,046

$

497,239

See Notes to Condensed Consolidated Financial Statements.

Index

7

Cal-Maine Foods, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements of

Cal-Maine Foods, Inc. and

its subsidiaries

(“Cal-Maine Foods,”

the

“Company,”

“we,” “us,”

“our”) have

been prepared

in

accordance with

the

instructions to

Form

10-Q

and Article

10

of

Regulation S-X and in accordance

with generally accepted accounting principles in the United States of America

(“GAAP”) for

interim financial

reporting and should

be read in

conjunction with our

Annual Report on Form

10-K for

the fiscal year

ended

May 31,

2025

(the “2025

Annual Report”).

These statements

reflect all

adjustments that

are, in

the

opinion of

management,

necessary to

a

fair

statement

of

the

results

for

the

interim

periods presented

and,

in

the

opinion

of

management,

consist of

adjustments of

a normal

recurring nature. Operating

results for

the

interim periods

are not

necessarily indicative of

operating

results for the entire fiscal year.

Fiscal Year

The Company’s

fiscal year ends on the Saturday closest to May 31. Each of the three-month

and year-to-date periods ended on

February 28, 2026 and March 1, 2025 included

13

and

39

weeks, respectively.

Use of Estimates

The preparation

of the

condensed consolidated financial

statements in

conformity with

GAAP requires

management to

make

estimates

and

assumptions

that

affect

the

amounts

reported

in

the

condensed

consolidated

financial

statements

and

accompanying notes. Actual results could

differ from those estimates.

Dividends Payable

Dividends are accrued

at the end of each quarter according to the Company’s dividend policy adopted by its Board of Directors

(the “Board”).

The Company pays a dividend to holders of its

Common Stock (and, prior to

its conversion to Common Stock on

April

14,

2025,

Class

A

Common Stock)

on

a

quarterly

basis

for

each quarter

for

which

the

Company

reports

net

income

attributable

to

Cal-Maine

Foods,

Inc.,

computed

in

accordance with

GAAP,

in

an

amount

equal

to

one-third

(1/3)

of

such

quarterly net

income. Dividends

are paid

to stockholders

of record

as of

the

60th day

following the

last day

of such

quarter,

except for the

fourth fiscal

quarter. For

the fourth

quarter, the

Company pays

dividends to

stockholders of

record on the

65th

day after the

quarter end. Dividends

are payable on

the 15th

day following the

record date. Following

a quarter for

which the

Company

does

not

report

net

income

attributable

to

Cal-Maine

Foods,

Inc.,

the

Company

will

not

pay

a

dividend

for

a

subsequent profitable quarter until the

Company is profitable on a

cumulative basis computed from the date of the

most recent

quarter for which a

dividend was paid. The dividend policy is subject

to periodic review by the

Board.

Revenue Recognition

The Company recognizes revenue

through the sale of its products to customers through retail, foodservice

and other distribution

channels.

The

majority

of

the

Company’s

revenue is

derived

from

agreements

or

contracts

with

customers

based

upon

the

customer

ordering

its

products

with

a

single

performance obligation

of

delivering

the

product.

The

Company

believes

the

performance obligation

is

met

upon

delivery

and

acceptance of

the

product

by

its

customers, which

generally

occurs

upon

shipment or

delivery to

a customer

based on

the terms

of the

sale. Costs

paid to

third party

brokers to

obtain agreements are

expensed as the Company’s agreements are

generally less than one year.

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.

The Company

regularly

reviews

these estimates

and

any difference

between the

estimated costs

and

actual realization of these

programs would be recognized in the subsequent

period.

Index

8

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

purchase price

over

fair

values

of

identifiable

assets

and

liabilities

is

recorded as

goodwill.

We

use various

models

and methods

to

determine the

fair values

of identifiable

assets and

liabilities,

such as

top-down and

bottom-up

approach for

inventory,

cost

method

and market

approach for

property,

and

relief-from-royalty and

multi-period

excess earnings to value intangibles. Significant estimates in valuing certain

intangible assets include, but are not limited to, the

amount and timing of future cash flows, growth

rates, discount rates and

useful lives.

New Accounting Pronouncements and Policies

In December 2023, the Financial

Accounting Standards Board (“FASB

”) issued Accounting Standards Update (“ASU”) 2023-

09,

Income Taxes (Topic

740. – Improvements to Income Tax Disclosures

. This ASU requires that an entity, on an annual basis,

disclose

additional

income tax

information,

primarily

related

to

the

rate

reconciliation

and

income

taxes

paid.

The

ASU

is

intended to

enhance the transparency and

decision usefulness

of income

tax disclosures.

ASU 2023-09

is effective

for annual

periods

beginning

after

December

15,

The

Company

is

currently

evaluating

the

impact

of

ASU

2023-09

on

its

consolidated financial statement disclosures.

In

November

2024,

the

FASB

issued

ASU

2024-03,

Income

Statement

—

Reporting

Comprehensive

Income

—

Expense

Disaggregation Disclosures (Subtopic 220-40)

. The objective of ASU 2024-03 is to improve disclosures about a public entity’s

expenses, primarily through additional disaggregation of income

statement expenses. Additionally,

in January 2025, the FASB

further clarified

the

effective date

of ASU

2024-03

with

the

issuance of ASU

2025-01. ASU

2024-03 is effective

for annual

periods beginning after December 15, 2026, and

interim periods within annual reporting

periods beginning after December 15,

2027. Early adoption is

permitted and may be applied either on

a prospective or retrospective basis.

The Company is currently

evaluating the impact of ASU 2024-03 on its

consolidated financial statement disclosures.

There are no other new accounting pronouncements

issued or effective during the fiscal year that had

or are expected to have a

material impact on our consolidated financial

statements.

Index

9

Note 2 - Acquisitions

Acquisition of Echo Lake Foods, LLC

Effective

June 2, 2025

, the Company

acquired Echo Lake Foods, LLC

and certain related companies (collectively “Echo Lake

Foods”). Echo Lake Foods

is based in

Burlington, Wisconsin

and produces, packages, markets and

distributes prepared foods,

including waffles, pancakes, scrambled

eggs, frozen cooked omelets, egg patties, toast and

diced eggs. The Company accounted

for the acquisition as a business combination.

The

Company

finalized

the

business

combination

accounting

during

the

second

quarter

of

fiscal

2026,

which

resulted

in

immaterial measurement period adjustments. The

following table summarizes the consideration paid for

Echo Lake Foods

and

the value of assets acquired

and liabilities assumed recognized

at the acquisition date (in thousands):

Cash consideration paid

$

275,406

Recognized amounts of identifiable

assets acquired and liabilities assumed

Cash

$

115

Investment securities available-for-sale

14,147

Accounts receivable

31,923

Inventories

21,601

Prepaid expenses and other current

assets

3,131

Property, plant & equipment

151,697

Intangible assets

36,800

259,414

Accounts payable and other current

liabilities

(14,114)

Total identifiable net assets

245,300

Goodwill

30,106

$

275,406

Cash and

accounts receivable acquired

along with

liabilities assumed were

valued at

their carrying value

which approximates

fair value due to the short maturity of

these instruments.

Inventories consisted primarily of raw materials,

supplies and finished goods.

Raw materials and supplies

were valued at their

carrying value as management believes that their carrying value best approximates their fair value. Finished goods were valued

using both the bottom-up and top-down

approach. The bottom-up approach

measures the value of inventory as

the value created

by the

target company

(i.e., the costs

incurred, profit realized, and

tangible and intangible assets

utilized) pre-acquisition date.

The top-down

approach measures the

value of

inventory as

the incremental

inventory value

created by

the market

participant

buyer as part of its

selling effort to an end customer (i.e.,

the costs that will be incurred, the profit

that will be realized, and the

tangible and intangible assets that will be

utilized) post-acquisition date.

Property,

plant and

equipment were

valued utilizing

the cost

approach and

market approach.

Machinery and

equipment were

valued

utilizing

the

cost

approach

which

is

based

on

replacement

or

reproduction

costs

of

the

assets

and

subtracting

any

depreciation resulting from physical deterioration and/or functional or economic obsolescence. Land and buildings were valued

utilizing the market approach

by using a real estate valuation.

Intangible assets consisted primarily of customer relationships and a

trade name. Customer relationships were valued using the

multi-period excess earnings method

and the trade name was valued

using the relief-from-royalty method.

Goodwill

represents the

excess of

the

purchase price

of the

acquired business

over the

acquisition

date fair

value of

the

net

assets acquired.

Goodwill recorded

in

connection with

the

Echo Lake

Foods acquisition

is primarily

attributable to

projected

synergies from

integrating the operations

of Echo

Lake Foods

with the

operations of the

Company.

The Company recognized

goodwill of $

30.1

million as a result of the acquisition,

all of which is deductible for tax

purposes.

Index

10

The

Company

recorded transaction

costs

of

$

594

thousand in

the

first

quarter of

fiscal 2026

and

$

6.6

million

in

the

fourth

quarter of fiscal

2025, respectively,

as a

result of

the Echo

Lake Foods

acquisition, within selling,

general and administrative

expenses in the condensed consolidated statements

of income.

Acquisition of Clean Egg, LLC

Effective

October 10, 2025

, the Company acquired certain assets of Clean Egg, LLC (“Clean

Egg”) based in Langwood, Texas,

for approximately $

23.7

million. The assets acquired included

677

thousand brown cage-free and

free-range layers and pullets

and

other

inventory,

machinery

and

equipment

related

to

its

processing

facility

and

contract

production.

The

Company

accounted for the acquisition as a

business combination.

Note 3 - InvestmentSecurities Available-for-Sale The following represents the Company’s investment securities available-for-sale as of February 28, 2026 and May 31, 2025 (in thousands):

February 28, 2026

Amortized

Cost

Unrealized

Gains

Unrealized

Losses

Estimated

Fair Value

Municipal bonds

$

17,494

$

48

$

—

$

17,542

Commercial paper

20,801

—

6

20,795

Corporate bonds

553,535

2,713

—

556,248

Certificates of deposits

4,055

10

—

4,065

US government and agency obligations

130,573

175

—

130,748

Treasury bills

30,360

10

—

30,370

Total current investment securities

$

756,818

$

2,956

$

6

$

759,768

May 31, 2025

Amortized

Cost

Unrealized

Gains

Unrealized

Losses

Estimated

Fair Value

Municipal bonds

$

21,695

$

3

$

—

$

21,698

Commercial paper

90,880

—

50

90,830

Corporate bonds

431,378

130

—

431,508

Certificates of deposits

5,200

—

6

5,194

US government and agency obligations

240,655

—

260

240,395

Treasury bills

103,119

—

36

103,083

Total current investment securities

$

892,927

$

133

$

352

$

892,708

Actual maturities may differ from

contractual maturities as some borrowers have the right to

call or prepay obligations with

or

without penalties. Contractual maturities of

current investment securities at February

28, 2026 are as follows (in thousands):

Estimated Fair Value

Within one year

$

353,520

1-5 years

406,248

Total

$

759,768

Note 4 - Fair Value Measurements

The Company

is required

to categorize both

financial and nonfinancial

assets and

liabilities based on

the following

fair value

hierarchy. The fair

value of

an asset

is the

price at

which the

asset could

be sold

in an

orderly transaction between

unrelated,

knowledgeable, and willing parties able to engage in the transaction. A liability’s fair value is defined as the amount that would

be paid

to

transfer the

liability to

a new

obligor in

a transaction

between such

parties, not

the

amount that

would be

paid

to

settle the liability with the creditor.

• Level 1
• Quoted prices in active markets

for identical assets or liabilities

Index

11

• Level 2
• Inputs

other than

quoted prices

included in

Level 1

that are

observable for

the

asset or

liability,

either

directly or indirectly, including:

• Quoted prices for similar assets or liabilities

in active markets

• Quoted prices for identical or similar

assets in non-active markets

• Inputs other than quoted prices that are

observable for the asset or

liability

• Inputs derived principally from or corroborated

by other observable market data

• Level 3
• Unobservable inputs for the asset or

liability that are supported by little or no market activity and that are

significant to the fair value of

the assets or liabilities

The disclosures of fair value of

certain financial assets and

liabilities that are recorded at cost are

as follows:

Cash and Cash Equivalents, Accounts

Receivable, and Accounts Payable

The carrying amount approximates fair

value due to the short maturity of these instruments.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

In accordance with the fair value hierarchy described above, the following table shows the fair value of our financial assets and

liabilities

that

are required

to

be measured

at

fair

value on

a

recurring basis

as of

February

28,

2026

and May

31,

2025

(in

thousands):

February 28, 2026

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

17,542

$

—

$

17,542

Commercial paper

—

20,795

—

20,795

Corporate bonds

—

556,248

—

556,248

Certificates of deposits

—

4,065

—

4,065

US government and agency obligations

—

130,748

—

130,748

Treasury bills

—

30,370

—

30,370

Total assets measured at fair value

$

—

$

759,768

$

—

$

759,768

Liabilities

Contingent consideration

$

—

$

—

$

23,000

$

23,000

Total liabilities measured at fair value

$

—

$

—

$

23,000

$

23,000

May 31, 2025

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

21,698

$

—

$

21,698

Commercial paper

—

90,830

—

90,830

Corporate bonds

—

431,508

—

431,508

Certificates of deposits

—

5,194

—

5,194

US government and agency obligations

—

240,395

—

240,395

Treasury bills

—

103,083

—

103,083

Total assets measured at fair value

$

—

$

892,708

$

—

$

892,708

Liabilities

Contingent consideration

$

—

$

—

$

21,500

$

21,500

Total liabilities measured at fair value

$

—

$

—

$

21,500

$

21,500

Investment securities – available-for-sale

are all classified as Level 2 and consist of securities

with maturities of three months or

longer

when

purchased. We

classified

these

securities as

current because

amounts

invested are

readily

available

for

current

operations. Observable inputs for these securities

are yields, credit risks, default

rates, and volatility.

Contingent consideration classified

as Level 3

consists

of the potential

obligation to pay

an earnout to

Fassio Egg Farms,

Inc.

(“Fassio”) contingent on

the acquired business

meeting certain return

on profitability

milestones over a

three-year

period that

commenced on the date of the

acquisition in the second quarter of fiscal 2024. The fair value of the

contingent consideration is

Index

12

estimated using a discounted cash flow model. Key assumptions and

unobservable inputs that require

significant judgment used

in the estimate include

weighted average cost of

capital, egg prices, projected

revenue and expenses over

the period for which

the

contingent

consideration

is

measured,

and

the

probability

assessments

with

respect

to

the

likelihood

of

achieving

the

forecasted projections.

The following table shows the beginning

and ending balances in fair value

of the contingent consideration (in thousands):

Fassio Contingent Consideration

Balance, May 31, 2025

$

21,500

Fair value adjustments

1,500

Balance, February 28, 2026

$

23,000

Adjustments to the fair value of contingent consideration

are recorded within the selling, general

and administrative expenses in

the condensed consolidation statements of income.

Note 5 - Inventories Inventories consisted of the following as of February 28, 2026 and May 31, 2025 (in thousands):

February 28, 2026

May 31, 2025

Flocks, net of amortization

$

176,270

$

166,507

Feed and supplies

113,986

99,188

Raw materials and finished goods inventory

58,654

29,975

$

348,910

$

295,670

We

grow

and

maintain

flocks

of

layers

(mature

female

chickens),

pullets

(female

chickens,

under

18

weeks

of

age),

and

breeders (male and female chickens used to produce fertile eggs to hatch

for egg production flocks). Our total flock at February

28, 2026 and May 31, 2025 consisted of approximately

14.3

million and

11.5

million pullets and breeders and

48.0

million and

48.3

million layers, respectively.

Note 6 - Equity The following reflects equity activity for the thirteen weeks ended February 28, 2026 and March 1, 2025 (in thousands):

Thirteen Weeks Ended February 28, 2026

Cal-Maine Foods, Inc. Stockholders

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Amount

Capital

Comp. Income

Earnings

Interest

Total

Balance at November 29, 2025

$

751

$

(161,477)

$

83,514

$

1,326

$

2,767,347

$

6,305

$

2,697,766

Other comprehensive income,

net of tax

—

—

—

78

—

—

78

Stock compensation plan

transactions

—

(1,366)

868

—

—

—

(498)

Repurchase of shares

—

(24,519)

—

—

—

—

(24,519)

Dividends ($

0.355

per share)

—

—

—

—

(16,813)

—

(16,813)

Net income

—

—

—

—

50,459

659

51,118

Balance at February 28, 2026

$

751

$

(187,362)

$

84,382

$

1,404

$

2,800,993

$

6,964

$

2,707,132

Index

13

Thirteen Weeks Ended March 1, 2025

Cal-Maine Foods, Inc. Stockholders

Class A

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at November

30, 2024

$

703

$

48

$

(31,661)

$

78,600

$

(908)

$

1,998,585

$

6,116

$

2,051,483

Other comprehensive

income, net of tax

—

—

—

—

151

—

—

151

Stock compensation

plan transactions

—

—

(3,835)

1,077

—

—

—

(2,758)

Dividends ($

3.456

per

share)

Common

—

—

—

—

—

(152,932)

—

(152,932)

Class A common

—

—

—

—

—

(16,589)

—

(16,589)

Net income (loss)

—

—

—

—

—

508,533

(380)

508,153

Balance at March 1,

2025

$

703

$

48

$

(35,496)

$

79,677

$

(757)

$

2,337,597

$

5,736

$

2,387,508

Thirty-nine Weeks Ended February 28, 2026

Cal-Maine Foods, Inc. Stockholders

Accum. Other

Treasury

Paid In

Comp. Income

Retained

Noncontrolling

Amount

Amount

Capital

(Loss)

Earnings

Interest

Total

Balance at May 31, 2025

$

751

$

(85,893)

$

80,845

$

(1,007)

$

2,565,928

$

5,391

$

2,566,015

Other comprehensive

income, net of tax

—

—

—

2,411

—

—

2,411

Stock compensation plan

transactions

—

(1,360)

3,537

—

—

—

2,177

Contributions

—

—

—

—

—

979

979

Repurchase of shares

—

(100,109)

—

—

—

—

(100,109)

Dividends ($

2.456

per

share)

—

—

—

—

(117,493)

—

(117,493)

Net income

—

—

—

—

352,558

594

353,152

Balance at February 28,

2026

$

751

$

(187,362)

$

84,382

$

1,404

$

2,800,993

$

6,964

$

2,707,132

Index

14

Thirty-nine Weeks Ended March 1, 2025

Cal-Maine Foods, Inc. Stockholders

Class A

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at June 1, 2024

$

703

$

48

$

(31,597)

$

76,371

$

(1,773)

$

1,756,395

$

(3,104)

$

1,797,043

Other comprehensive

income, net of tax

—

—

—

—

1,016

—

—

1,016

Stock compensation

plan transactions

—

—

(3,899)

3,306

—

—

—

(593)

Contributions to

Crepini Foods LLC

—

—

—

—

—

—

6,485

6,485

Acquisition of

noncontrolling interest

in MeadowCreek

Foods LLC

—

—

—

—

—

(3,826)

3,826

—

Dividends ($

5.965

per

share)

Common

—

—

—

—

—

(263,918)

—

(263,918)

Class A common

—

—

—

—

—

(28,627)

—

(28,627)

Net income (loss)

—

—

—

—

—

877,573

(1,471)

876,102

Balance at March 1,

2025

$

703

$

48

$

(35,496)

$

79,677

$

(757)

$

2,337,597

$

5,736

$

2,387,508

Note 7 - Net Income per Common Share

Basic net

income per

share

attributable to

Cal-Maine Foods,

Inc. is

based on

the

weighted average shares

of Common

Stock

(and when they

were outstanding

shares of

Class A

Common Stock) outstanding.

All shares of

Class A

Common Stock

were

converted into Common

Stock on

April 14, 2025.

Diluted net income per

share attributable to

Cal-Maine Foods, Inc.

is based

on weighted-average shares of

Common Stock

outstanding during the

relevant period adjusted for

the dilutive effect

of share-

based awards.

Index

15

The

following

table

provides

a

reconciliation

of

the

numerators

and

denominators

used

to

determine

basic

and

diluted

net

income per common share attributable to

Cal-Maine Foods, Inc. (amounts in

thousands, except per

share data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Numerator

Net income

$

51,118

$

508,153

$

353,152

$

876,102

Less: Gain (loss) attributable to

noncontrolling interest

659

(380)

594

(1,471)

Net income attributable to Cal-Maine

Foods, Inc.

$

50,459

$

508,533

$

352,558

$

877,573

Denominator

Weighted-average common shares

outstanding, basic

47,299

48,798

47,866

48,774

Effect of dilutive restricted shares

115

173

137

188

Weighted-average common shares

outstanding, diluted

47,414

48,971

48,003

48,962

Net income per common share

attributable to Cal-Maine Foods, Inc.

Basic

$

1.07

$

10.42

$

7.37

$

17.99

Diluted

$

1.06

$

10.38

$

7.34

$

17.92

Note 8 - Stock Based Compensation

Total

stock-based compensation expense was $

4.0

million and

$

3.4

million for the thirty-nine weeks ended February

28, 2026

and March 1, 2025, respectively.

Unrecognized compensation expense as

a result

of non-vested

shares of

equity-based awards outstanding

under the

Amended

and Restated 2012 Omnibus Long-Term Incentive Plan at February 28,

2026 of $

11.2

million will be recorded over a weighted

average period of

2.3

years. Refer to Part II Item

8, Notes to Consolidated Financial Statements and Supplementary Data, Note

13 – Stock-Based Compensation in our 2025

Annual Report for further information

on our stock compensation plans.

The Company’s equity-based award activity for the thirty-nine

weeks ended February

28, 2026 was as follows:

Number of

Shares

Weighted

Average Grant

Date Fair Value

Outstanding, May 31, 2025

212,717

$

66.93

Granted

95,747

78.69

Vested

(81,358)

54.12

Forfeited

(3,766)

82.85

Outstanding, February 28, 2026

223,340

$

76.37

Index

16

Note 9 – Segment Reporting

The Company has

one

operating and

one

reportable segment, which is the production, packaging, marketing

and distribution of

shell eggs,

prepared foods and egg

products. The Company is managed on a

consolidated basis.

The Company’s

operating segment is

determined on the

basis of

our organizational structure and

information that

is regularly

reviewed by our Chief Operating Decision Maker (“CODM”). The Company’s

CODM is Sherman Miller,

President and Chief

Executive Officer. The CODM reviews net income, which is reported on the Condensed Consolidated Statements of Income,

to

assess the performance of, and

make decisions on

how to

allocate resources to, the

segment. The CODM utilizes

consolidated

expense information regularly provided in the

CODM package in order to assist

with assessing performance and deciding how

to

allocate

resources,

which

align

with

the

consolidated

expense

categories

as

disclosed

on

the

face

of

the

Condensed

Consolidated Statements of Income. The measure of

segment assets is reported on

the Condensed

Consolidated Balance Sheet

as Total assets.

Revenue primarily

derives from

the

sales of

shell

eggs,

prepared foods,

and egg

products throughout

the

United States.

The

Company’s

shell egg

product offerings

include specialty

and conventional

shell

eggs. Specialty shell

eggs include

cage-free,

organic, brown,

free-range, pasture-raised

and nutritionally

enhanced eggs.

Conventional shell

eggs sales

represent

all

other

shell egg sales not sold as specialty shell eggs. The Company’s prepared

foods include offerings such as pre-cooked egg patties,

omelets,

folded and

scrambled egg

formats, hard-cooked

eggs,

pancakes,

waffles,

and specialty

wraps.

Egg

products include

liquid and frozen egg products.

Other sales represent

feed sales, miscellaneous byproducts and

resale products.

The following table provides revenue

disaggregated by product category

(in thousands):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Conventional shell egg sales

$

283,173

$

1,016,438

$

1,152,979

$

2,118,065

Specialty shell egg sales

289,141

328,944

858,299

872,691

Prepared foods

63,626

11,757

219,212

31,134

Egg products

18,360

49,267

89,998

105,716

Other

12,651

11,279

38,563

30,621

$

666,951

$

1,417,685

$

2,359,051

$

3,158,227

The following table provides revenue

disaggregated by sales channel

(in thousands):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Retail

$

560,843

$

1,199,697

$

1,925,993

$

2,679,826

Foodservice

94,389

207,315

371,410

451,040

Other

11,719

10,673

61,648

27,361

$

666,951

$

1,417,685

$

2,359,051

$

3,158,227

Retail customers include primarily national and regional

grocery store chains, club stores,

and companies servicing independent

supermarkets

in

the

U.S.

Foodservice

customers

include

primarily

companies

that

sell

food

products

and

related

items

to

restaurants, convenience

stores, healthcare and education facilities

and hotels.

Note 10 - Commitments and Contingencies

In re Shell Eggs Litigation

Since

November

2025,

the

Company

has

been

named

as

a

defendant

in

several

lawsuits

filed

in

federal

courts

alleging

substantially identical claims, including: (1) the following lawsuits in the Southern

District of Indiana: (a) King Kullen Grocery

Co., Inc.

v.

Cal-Maine Foods,

Inc., et

al., Case

No. 1:25-cv-2274,

(b) Nineteenseventynine LLC

d/b/a The

Breakfast Joynt

v.

Cal-Maine Foods, Inc., et

al., Case No. 1:25-cv-2301, (c)

Taylor Egg

Products, Inc. v.

Cal-Maine Foods, Inc., et

al., Case No.

1:25-cv-2554, (d) Hudson

v.

Cal-Maine Foods,

Inc. et

al., Case

No. 1:25-cv-02573,

(e) Brandon

Huyler v.

Cal-Maine Foods,

Inc., et al., Case No. 1:26-cv-00135, and (f) Gloria Emery,

Carol Goldberg, and Casey Whalen v.

Cal-Maine Foods, Inc., et al.,

Case

No.

1:26-cv-00135; (2)

the

following

lawsuits in

the

Northern

District

of

Illinois: (a)

Birchmans

Parisian,

LLC

(d/b/a

Index

17

Lisciandro's Restaurant) v. Cal-Maine Foods, Inc., et al., Case No. 1:25-cv-14030, (b) Phil-N-Cindy's Lunch, Inc. v.

Cal-Maine

Foods, Inc.,

et al.,

Case No.

1:25-cv-14082, (c) Yell

-O-Glow Corporation v.

Cal-Maine Foods, Inc.,

et al.,

Case No.

1:25-cv-

15084, and (d) Tariq

Habash, Delia Govea, Andrew Phillips,

and Catalina Torres

v.

Urner Barry Publications, Inc., Cal-Maine

Foods, Inc., et al., Case No. 1:25-cv-14112;

(3) the following lawsuits in the Western

District of Wisconsin: (a) Matthew Edlin

v.

Cal-Maine Foods,

Inc., et

al., Case

No. 3:25-cv-946,

and (b)

India Price,

Lakia Session,

and Karen Solomon

v.

Cal-Maine

Foods, Inc.,

et al., Case

No. 3:25-cv-1016; and

(4) the

following lawsuit in the

Western

District of Missouri:

(a) Ryan

v.

Cal-

Maine

Foods,

Inc.,

et

al.,

Case

No.

4:25-cv-00999.

The

lawsuits

generally

allege

that

the

Company,

along

with

other

egg

producers and industry associations, conspired to

artificially inflate the prices of conventional

shell eggs nationwide, primarily

through

manipulation of

industry

price

benchmarks (such

as

the

Urner Barry

Egg

Index and

Eggs

Clearinghouse,

Inc.

spot

market),

coordinated

reporting

and

supply

restrictions,

particularly

during

the

calendar

year

2022

highly

pathogenic

avian

influenza

(“HPAI”)

outbreak.

In

each

case,

the

plaintiff

seeks

Item 1A.

Risk Factors

33

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

33

Item 5.

Other Information

33

Item 6.

Exhibits

34

Signatures

35

Index

3

PART

I.

FINANCIAL

INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Balance

Sheets

(In thousands, except for par value

amounts)

(Unaudited)

February 28, 2026

May 31, 2025

Assets

Current assets:

Cash and cash equivalents

$

392,159

$

499,392

Investment securities available-for-sale

759,768

892,708

Trade and other receivables, net

185,176

259,304

Income tax receivable

49,722

13,057

Inventories

348,910

295,670

Prepaid expenses and other current

assets

13,751

7,979

Total current assets

1,749,486

1,968,110

Property, plant & equipment, net

1,221,162

1,026,684

Investments in unconsolidated entities

9,182

11,095

Goodwill

87,059

46,776

Intangible assets, net

53,361

15,157

Other long-term assets

19,011

16,797

Total Assets

$

3,139,261

$

3,084,619

Liabilities and Stockholders’

Equity

Current liabilities:

Accounts payable

$

106,494

$

101,033

Accrued wages and benefits

36,618

60,263

Dividends payable

16,841

114,163

Accrued expenses and other

liabilities

53,025

32,912

Total current liabilities

212,978

308,371

Other noncurrent liabilities

34,625

55,582

Deferred income taxes, net

184,526

154,651

Total liabilities

432,129

518,604

Commitments and contingencies - see

Note 10

—

—

Stockholders’ equity:

Common stock ($

0.01

par value) - authorized

120,000

shares, issued

75,061

shares

751

751

Paid-in capital

84,382

80,845

Retained earnings

2,800,993

2,565,928

Accumulated other comprehensive

income (loss), net of tax

1,404

(1,007)

Common stock in treasury at cost –

27,686

shares at February 28, 2026 and

26,567

shares at May 31, 2025

(187,362)

(85,893)

Total Cal-Maine Foods, Inc. stockholders’ equity

2,700,168

2,560,624

Noncontrolling interest in consolidated

entity

6,964

5,391

Total stockholders’ equity

2,707,132

2,566,015

Total Liabilities and Stockholders’ Equity

$

3,139,261

$

3,084,619

See Notes to Condensed Consolidated Financial Statements.

Index

4

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of

Income

(In thousands, except per share amounts)

(Unaudited)

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Net sales

$

666,951

$

1,417,685

$

2,359,051

$

3,158,227

Cost of sales

547,668

701,570

1,721,068

1,838,852

Gross profit

119,283

716,115

637,983

1,319,375

Selling, general and administrative

83,304

79,967

235,705

219,532

(Gain) loss on involuntary conversions

(480)

—

(7,968)

156

(Gain) loss on disposal of fixed assets

515

478

1,249

(1,001)

Operating income

35,944

635,670

408,997

1,100,688

Other income (expense):

Interest income, net

11,268

12,628

36,384

32,183

Patronage dividends

11,670

11,197

11,670

11,197

Other, net

(696)

3,534

479

5,875

Total other income, net

22,242

27,359

48,533

49,255

Income before income

taxes

58,186

663,029

457,530

1,149,943

Income tax expense

7,068

154,876

104,378

273,841

Net income

51,118

508,153

353,152

876,102

Less: Income (loss) attributable to noncontrolling

interest

659

(380)

594

(1,471)

Net income attributable to Cal-Maine Foods,

Inc.

$

50,459

$

508,533

$

352,558

$

877,573

Net income per common share:

Basic

$

1.07

$

10.42

$

7.37

$

17.99

Diluted

$

1.06

$

10.38

$

7.34

$

17.92

Weighted average shares outstanding:

Basic

47,299

48,798

47,866

48,774

Diluted

47,414

48,971

48,003

48,962

See Notes to Condensed Consolidated Financial Statements.

Index

5

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of

Comprehensive Income

(In thousands)

(Unaudited)

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Net income

$

51,118

$

508,153

$

353,152

$

876,102

Other comprehensive income, before

tax:

Unrealized holding gain on available-for-

sale securities, net of reclassification

adjustments

103

200

3,183

1,342

Income tax expense related

to items of other

comprehensive income

(25)

(49)

(772)

(326)

Other comprehensive income, net

of tax

78

151

2,411

1,016

Comprehensive income

51,196

508,304

355,563

877,118

Less: Comprehensive income (loss)

attributable to the noncontrolling interest

659

(380)

594

(1,471)

Comprehensive income attributable to

Cal-

Maine Foods, Inc.

$

50,537

$

508,684

$

354,969

$

878,589

See Notes to Condensed Consolidated Financial Statements.

Index

6

Cal-Maine Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of

Cash Flows

(In thousands)

(Unaudited)

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

Cash flows from operating activities:

Net income

$

353,152

$

876,102

Depreciation and amortization

90,294

69,430

Deferred income taxes

29,127

(14,749)

Other adjustments, net

4,349

(119,057)

Net cash provided by operations

476,922

811,726

Cash flows from investing activities:

Purchases of investment securities

(503,677)

(813,130)

Sales and maturities of investment securities

659,728

654,392

Distributions from unconsolidated entities

—

1,550

Acquisition of businesses, net of cash acquired

(299,010)

(116,193)

Purchases of property, plant and equipment

(123,708)

(115,395)

Net proceeds from disposal of property, plant and equipment

191

3,650

Net cash used in investing activities

(266,476)

(385,126)

Cash flows from financing activities:

Payments of dividends

(214,796)

(160,805)

Purchase of common stock by treasury

(100,996)

(3,953)

Principal payments on long-term debt

—

(2,481)

Net cash used in financing activities

(315,792)

(167,239)

Net change in cash, cash

equivalents and restricted cash

(105,346)

259,361

Cash, cash equivalents and restricted

cash at beginning of period

499,392

237,878

Cash, cash equivalents and restricted

cash at end of period

$

394,046

$

497,239

See Notes to Condensed Consolidated Financial Statements.

Index

7

Cal-Maine Foods, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements of

Cal-Maine Foods, Inc. and

its subsidiaries

(“Cal-Maine Foods,”

the

“Company,”

“we,” “us,”

“our”) have

been prepared

in

accordance with

the

instructions to

Form

10-Q

and Article

10

of

Regulation S-X and in accordance

with generally accepted accounting principles in the United States of America

(“GAAP”) for

interim financial

reporting and should

be read in

conjunction with our

Annual Report on Form

10-K for

the fiscal year

ended

May 31,

2025

(the “2025

Annual Report”).

These statements

reflect all

adjustments that

are, in

the

opinion of

management,

necessary to

a

fair

statement

of

the

results

for

the

interim

periods presented

and,

in

the

opinion

of

management,

consist of

adjustments of

a normal

recurring nature. Operating

results for

the

interim periods

are not

necessarily indicative of

operating

results for the entire fiscal year.

Fiscal Year

The Company’s

fiscal year ends on the Saturday closest to May 31. Each of the three-month

and year-to-date periods ended on

February 28, 2026 and March 1, 2025 included

13

and

39

weeks, respectively.

Use of Estimates

The preparation

of the

condensed consolidated financial

statements in

conformity with

GAAP requires

management to

make

estimates

and

assumptions

that

affect

the

amounts

reported

in

the

condensed

consolidated

financial

statements

and

accompanying notes. Actual results could

differ from those estimates.

Dividends Payable

Dividends are accrued

at the end of each quarter according to the Company’s dividend policy adopted by its Board of Directors

(the “Board”).

The Company pays a dividend to holders of its

Common Stock (and, prior to

its conversion to Common Stock on

April

14,

2025,

Class

A

Common Stock)

on

a

quarterly

basis

for

each quarter

for

which

the

Company

reports

net

income

attributable

to

Cal-Maine

Foods,

Inc.,

computed

in

accordance with

GAAP,

in

an

amount

equal

to

one-third

(1/3)

of

such

quarterly net

income. Dividends

are paid

to stockholders

of record

as of

the

60th day

following the

last day

of such

quarter,

except for the

fourth fiscal

quarter. For

the fourth

quarter, the

Company pays

dividends to

stockholders of

record on the

65th

day after the

quarter end. Dividends

are payable on

the 15th

day following the

record date. Following

a quarter for

which the

Company

does

not

report

net

income

attributable

to

Cal-Maine

Foods,

Inc.,

the

Company

will

not

pay

a

dividend

for

a

subsequent profitable quarter until the

Company is profitable on a

cumulative basis computed from the date of the

most recent

quarter for which a

dividend was paid. The dividend policy is subject

to periodic review by the

Board.

Revenue Recognition

The Company recognizes revenue

through the sale of its products to customers through retail, foodservice

and other distribution

channels.

The

majority

of

the

Company’s

revenue is

derived

from

agreements

or

contracts

with

customers

based

upon

the

customer

ordering

its

products

with

a

single

performance obligation

of

delivering

the

product.

The

Company

believes

the

performance obligation

is

met

upon

delivery

and

acceptance of

the

product

by

its

customers, which

generally

occurs

upon

shipment or

delivery to

a customer

based on

the terms

of the

sale. Costs

paid to

third party

brokers to

obtain agreements are

expensed as the Company’s agreements are

generally less than one year.

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.

The Company

regularly

reviews

these estimates

and

any difference

between the

estimated costs

and

actual realization of these

programs would be recognized in the subsequent

period.

Index

8

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

purchase price

over

fair

values

of

identifiable

assets

and

liabilities

is

recorded as

goodwill.

We

use various

models

and methods

to

determine the

fair values

of identifiable

assets and

liabilities,

such as

top-down and

bottom-up

approach for

inventory,

cost

method

and market

approach for

property,

and

relief-from-royalty and

multi-period

excess earnings to value intangibles. Significant estimates in valuing certain

intangible assets include, but are not limited to, the

amount and timing of future cash flows, growth

rates, discount rates and

useful lives.

New Accounting Pronouncements and Policies

In December 2023, the Financial

Accounting Standards Board (“FASB

”) issued Accounting Standards Update (“ASU”) 2023-

09,

Income Taxes (Topic

740. – Improvements to Income Tax Disclosures

. This ASU requires that an entity, on an annual basis,

disclose

additional

income tax

information,

primarily

related

to

the

rate

reconciliation

and

income

taxes

paid.

The

ASU

is

intended to

enhance the transparency and

decision usefulness

of income

tax disclosures.

ASU 2023-09

is effective

for annual

periods

beginning

after

December

15,

The

Company

is

currently

evaluating

the

impact

of

ASU

2023-09

on

its

consolidated financial statement disclosures.

In

November

2024,

the

FASB

issued

ASU

2024-03,

Income

Statement

—

Reporting

Comprehensive

Income

—

Expense

Disaggregation Disclosures (Subtopic 220-40)

. The objective of ASU 2024-03 is to improve disclosures about a public entity’s

expenses, primarily through additional disaggregation of income

statement expenses. Additionally,

in January 2025, the FASB

further clarified

the

effective date

of ASU

2024-03

with

the

issuance of ASU

2025-01. ASU

2024-03 is effective

for annual

periods beginning after December 15, 2026, and

interim periods within annual reporting

periods beginning after December 15,

2027. Early adoption is

permitted and may be applied either on

a prospective or retrospective basis.

The Company is currently

evaluating the impact of ASU 2024-03 on its

consolidated financial statement disclosures.

There are no other new accounting pronouncements

issued or effective during the fiscal year that had

or are expected to have a

material impact on our consolidated financial

statements.

Index

9

Note 2 - Acquisitions

Acquisition of Echo Lake Foods, LLC

Effective

June 2, 2025

, the Company

acquired Echo Lake Foods, LLC

and certain related companies (collectively “Echo Lake

Foods”). Echo Lake Foods

is based in

Burlington, Wisconsin

and produces, packages, markets and

distributes prepared foods,

including waffles, pancakes, scrambled

eggs, frozen cooked omelets, egg patties, toast and

diced eggs. The Company accounted

for the acquisition as a business combination.

The

Company

finalized

the

business

combination

accounting

during

the

second

quarter

of

fiscal

2026,

which

resulted

in

immaterial measurement period adjustments. The

following table summarizes the consideration paid for

Echo Lake Foods

and

the value of assets acquired

and liabilities assumed recognized

at the acquisition date (in thousands):

Cash consideration paid

$

275,406

Recognized amounts of identifiable

assets acquired and liabilities assumed

Cash

$

115

Investment securities available-for-sale

14,147

Accounts receivable

31,923

Inventories

21,601

Prepaid expenses and other current

assets

3,131

Property, plant & equipment

151,697

Intangible assets

36,800

259,414

Accounts payable and other current

liabilities

(14,114)

Total identifiable net assets

245,300

Goodwill

30,106

$

275,406

Cash and

accounts receivable acquired

along with

liabilities assumed were

valued at

their carrying value

which approximates

fair value due to the short maturity of

these instruments.

Inventories consisted primarily of raw materials,

supplies and finished goods.

Raw materials and supplies

were valued at their

carrying value as management believes that their carrying value best approximates their fair value. Finished goods were valued

using both the bottom-up and top-down

approach. The bottom-up approach

measures the value of inventory as

the value created

by the

target company

(i.e., the costs

incurred, profit realized, and

tangible and intangible assets

utilized) pre-acquisition date.

The top-down

approach measures the

value of

inventory as

the incremental

inventory value

created by

the market

participant

buyer as part of its

selling effort to an end customer (i.e.,

the costs that will be incurred, the profit

that will be realized, and the

tangible and intangible assets that will be

utilized) post-acquisition date.

Property,

plant and

equipment were

valued utilizing

the cost

approach and

market approach.

Machinery and

equipment were

valued

utilizing

the

cost

approach

which

is

based

on

replacement

or

reproduction

costs

of

the

assets

and

subtracting

any

depreciation resulting from physical deterioration and/or functional or economic obsolescence. Land and buildings were valued

utilizing the market approach

by using a real estate valuation.

Intangible assets consisted primarily of customer relationships and a

trade name. Customer relationships were valued using the

multi-period excess earnings method

and the trade name was valued

using the relief-from-royalty method.

Goodwill

represents the

excess of

the

purchase price

of the

acquired business

over the

acquisition

date fair

value of

the

net

assets acquired.

Goodwill recorded

in

connection with

the

Echo Lake

Foods acquisition

is primarily

attributable to

projected

synergies from

integrating the operations

of Echo

Lake Foods

with the

operations of the

Company.

The Company recognized

goodwill of $

30.1

million as a result of the acquisition,

all of which is deductible for tax

purposes.

Index

10

The

Company

recorded transaction

costs

of

$

594

thousand in

the

first

quarter of

fiscal 2026

and

$

6.6

million

in

the

fourth

quarter of fiscal

2025, respectively,

as a

result of

the Echo

Lake Foods

acquisition, within selling,

general and administrative

expenses in the condensed consolidated statements

of income.

Acquisition of Clean Egg, LLC

Effective

October 10, 2025

, the Company acquired certain assets of Clean Egg, LLC (“Clean

Egg”) based in Langwood, Texas,

for approximately $

23.7

million. The assets acquired included

677

thousand brown cage-free and

free-range layers and pullets

and

other

inventory,

machinery

and

equipment

related

to

its

processing

facility

and

contract

production.

The

Company

accounted for the acquisition as a

business combination.

Note 3 - InvestmentSecurities Available-for-Sale The following represents the Company’s investment securities available-for-sale as of February 28, 2026 and May 31, 2025 (in thousands):

February 28, 2026

Amortized

Cost

Unrealized

Gains

Unrealized

Losses

Estimated

Fair Value

Municipal bonds

$

17,494

$

48

$

—

$

17,542

Commercial paper

20,801

—

6

20,795

Corporate bonds

553,535

2,713

—

556,248

Certificates of deposits

4,055

10

—

4,065

US government and agency obligations

130,573

175

—

130,748

Treasury bills

30,360

10

—

30,370

Total current investment securities

$

756,818

$

2,956

$

6

$

759,768

May 31, 2025

Amortized

Cost

Unrealized

Gains

Unrealized

Losses

Estimated

Fair Value

Municipal bonds

$

21,695

$

3

$

—

$

21,698

Commercial paper

90,880

—

50

90,830

Corporate bonds

431,378

130

—

431,508

Certificates of deposits

5,200

—

6

5,194

US government and agency obligations

240,655

—

260

240,395

Treasury bills

103,119

—

36

103,083

Total current investment securities

$

892,927

$

133

$

352

$

892,708

Actual maturities may differ from

contractual maturities as some borrowers have the right to

call or prepay obligations with

or

without penalties. Contractual maturities of

current investment securities at February

28, 2026 are as follows (in thousands):

Estimated Fair Value

Within one year

$

353,520

1-5 years

406,248

Total

$

759,768

Note 4 - Fair Value Measurements

The Company

is required

to categorize both

financial and nonfinancial

assets and

liabilities based on

the following

fair value

hierarchy. The fair

value of

an asset

is the

price at

which the

asset could

be sold

in an

orderly transaction between

unrelated,

knowledgeable, and willing parties able to engage in the transaction. A liability’s fair value is defined as the amount that would

be paid

to

transfer the

liability to

a new

obligor in

a transaction

between such

parties, not

the

amount that

would be

paid

to

settle the liability with the creditor.

• Level 1
• Quoted prices in active markets

for identical assets or liabilities

Index

11

• Level 2
• Inputs

other than

quoted prices

included in

Level 1

that are

observable for

the

asset or

liability,

either

directly or indirectly, including:

• Quoted prices for similar assets or liabilities

in active markets

• Quoted prices for identical or similar

assets in non-active markets

• Inputs other than quoted prices that are

observable for the asset or

liability

• Inputs derived principally from or corroborated

by other observable market data

• Level 3
• Unobservable inputs for the asset or

liability that are supported by little or no market activity and that are

significant to the fair value of

the assets or liabilities

The disclosures of fair value of

certain financial assets and

liabilities that are recorded at cost are

as follows:

Cash and Cash Equivalents, Accounts

Receivable, and Accounts Payable

The carrying amount approximates fair

value due to the short maturity of these instruments.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

In accordance with the fair value hierarchy described above, the following table shows the fair value of our financial assets and

liabilities

that

are required

to

be measured

at

fair

value on

a

recurring basis

as of

February

28,

2026

and May

31,

2025

(in

thousands):

February 28, 2026

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

17,542

$

—

$

17,542

Commercial paper

—

20,795

—

20,795

Corporate bonds

—

556,248

—

556,248

Certificates of deposits

—

4,065

—

4,065

US government and agency obligations

—

130,748

—

130,748

Treasury bills

—

30,370

—

30,370

Total assets measured at fair value

$

—

$

759,768

$

—

$

759,768

Liabilities

Contingent consideration

$

—

$

—

$

23,000

$

23,000

Total liabilities measured at fair value

$

—

$

—

$

23,000

$

23,000

May 31, 2025

Level 1

Level 2

Level 3

Balance

Assets

Municipal bonds

$

—

$

21,698

$

—

$

21,698

Commercial paper

—

90,830

—

90,830

Corporate bonds

—

431,508

—

431,508

Certificates of deposits

—

5,194

—

5,194

US government and agency obligations

—

240,395

—

240,395

Treasury bills

—

103,083

—

103,083

Total assets measured at fair value

$

—

$

892,708

$

—

$

892,708

Liabilities

Contingent consideration

$

—

$

—

$

21,500

$

21,500

Total liabilities measured at fair value

$

—

$

—

$

21,500

$

21,500

Investment securities – available-for-sale

are all classified as Level 2 and consist of securities

with maturities of three months or

longer

when

purchased. We

classified

these

securities as

current because

amounts

invested are

readily

available

for

current

operations. Observable inputs for these securities

are yields, credit risks, default

rates, and volatility.

Contingent consideration classified

as Level 3

consists

of the potential

obligation to pay

an earnout to

Fassio Egg Farms,

Inc.

(“Fassio”) contingent on

the acquired business

meeting certain return

on profitability

milestones over a

three-year

period that

commenced on the date of the

acquisition in the second quarter of fiscal 2024. The fair value of the

contingent consideration is

Index

12

estimated using a discounted cash flow model. Key assumptions and

unobservable inputs that require

significant judgment used

in the estimate include

weighted average cost of

capital, egg prices, projected

revenue and expenses over

the period for which

the

contingent

consideration

is

measured,

and

the

probability

assessments

with

respect

to

the

likelihood

of

achieving

the

forecasted projections.

The following table shows the beginning

and ending balances in fair value

of the contingent consideration (in thousands):

Fassio Contingent Consideration

Balance, May 31, 2025

$

21,500

Fair value adjustments

1,500

Balance, February 28, 2026

$

23,000

Adjustments to the fair value of contingent consideration

are recorded within the selling, general

and administrative expenses in

the condensed consolidation statements of income.

Note 5 - Inventories Inventories consisted of the following as of February 28, 2026 and May 31, 2025 (in thousands):

February 28, 2026

May 31, 2025

Flocks, net of amortization

$

176,270

$

166,507

Feed and supplies

113,986

99,188

Raw materials and finished goods inventory

58,654

29,975

$

348,910

$

295,670

We

grow

and

maintain

flocks

of

layers

(mature

female

chickens),

pullets

(female

chickens,

under

18

weeks

of

age),

and

breeders (male and female chickens used to produce fertile eggs to hatch

for egg production flocks). Our total flock at February

28, 2026 and May 31, 2025 consisted of approximately

14.3

million and

11.5

million pullets and breeders and

48.0

million and

48.3

million layers, respectively.

Note 6 - Equity The following reflects equity activity for the thirteen weeks ended February 28, 2026 and March 1, 2025 (in thousands):

Thirteen Weeks Ended February 28, 2026

Cal-Maine Foods, Inc. Stockholders

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Amount

Capital

Comp. Income

Earnings

Interest

Total

Balance at November 29, 2025

$

751

$

(161,477)

$

83,514

$

1,326

$

2,767,347

$

6,305

$

2,697,766

Other comprehensive income,

net of tax

—

—

—

78

—

—

78

Stock compensation plan

transactions

—

(1,366)

868

—

—

—

(498)

Repurchase of shares

—

(24,519)

—

—

—

—

(24,519)

Dividends ($

0.355

per share)

—

—

—

—

(16,813)

—

(16,813)

Net income

—

—

—

—

50,459

659

51,118

Balance at February 28, 2026

$

751

$

(187,362)

$

84,382

$

1,404

$

2,800,993

$

6,964

$

2,707,132

Index

13

Thirteen Weeks Ended March 1, 2025

Cal-Maine Foods, Inc. Stockholders

Class A

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at November

30, 2024

$

703

$

48

$

(31,661)

$

78,600

$

(908)

$

1,998,585

$

6,116

$

2,051,483

Other comprehensive

income, net of tax

—

—

—

—

151

—

—

151

Stock compensation

plan transactions

—

—

(3,835)

1,077

—

—

—

(2,758)

Dividends ($

3.456

per

share)

Common

—

—

—

—

—

(152,932)

—

(152,932)

Class A common

—

—

—

—

—

(16,589)

—

(16,589)

Net income (loss)

—

—

—

—

—

508,533

(380)

508,153

Balance at March 1,

2025

$

703

$

48

$

(35,496)

$

79,677

$

(757)

$

2,337,597

$

5,736

$

2,387,508

Thirty-nine Weeks Ended February 28, 2026

Cal-Maine Foods, Inc. Stockholders

Accum. Other

Treasury

Paid In

Comp. Income

Retained

Noncontrolling

Amount

Amount

Capital

(Loss)

Earnings

Interest

Total

Balance at May 31, 2025

$

751

$

(85,893)

$

80,845

$

(1,007)

$

2,565,928

$

5,391

$

2,566,015

Other comprehensive

income, net of tax

—

—

—

2,411

—

—

2,411

Stock compensation plan

transactions

—

(1,360)

3,537

—

—

—

2,177

Contributions

—

—

—

—

—

979

979

Repurchase of shares

—

(100,109)

—

—

—

—

(100,109)

Dividends ($

2.456

per

share)

—

—

—

—

(117,493)

—

(117,493)

Net income

—

—

—

—

352,558

594

353,152

Balance at February 28,

2026

$

751

$

(187,362)

$

84,382

$

1,404

$

2,800,993

$

6,964

$

2,707,132

Index

14

Thirty-nine Weeks Ended March 1, 2025

Cal-Maine Foods, Inc. Stockholders

Class A

Treasury

Paid In

Accum. Other

Retained

Noncontrolling

Amount

Amount

Amount

Capital

Comp. Loss

Earnings

Interest

Total

Balance at June 1, 2024

$

703

$

48

$

(31,597)

$

76,371

$

(1,773)

$

1,756,395

$

(3,104)

$

1,797,043

Other comprehensive

income, net of tax

—

—

—

—

1,016

—

—

1,016

Stock compensation

plan transactions

—

—

(3,899)

3,306

—

—

—

(593)

Contributions to

Crepini Foods LLC

—

—

—

—

—

—

6,485

6,485

Acquisition of

noncontrolling interest

in MeadowCreek

Foods LLC

—

—

—

—

—

(3,826)

3,826

—

Dividends ($

5.965

per

share)

Common

—

—

—

—

—

(263,918)

—

(263,918)

Class A common

—

—

—

—

—

(28,627)

—

(28,627)

Net income (loss)

—

—

—

—

—

877,573

(1,471)

876,102

Balance at March 1,

2025

$

703

$

48

$

(35,496)

$

79,677

$

(757)

$

2,337,597

$

5,736

$

2,387,508

Note 7 - Net Income per Common Share

Basic net

income per

share

attributable to

Cal-Maine Foods,

Inc. is

based on

the

weighted average shares

of Common

Stock

(and when they

were outstanding

shares of

Class A

Common Stock) outstanding.

All shares of

Class A

Common Stock

were

converted into Common

Stock on

April 14, 2025.

Diluted net income per

share attributable to

Cal-Maine Foods, Inc.

is based

on weighted-average shares of

Common Stock

outstanding during the

relevant period adjusted for

the dilutive effect

of share-

based awards.

Index

15

The

following

table

provides

a

reconciliation

of

the

numerators

and

denominators

used

to

determine

basic

and

diluted

net

income per common share attributable to

Cal-Maine Foods, Inc. (amounts in

thousands, except per

share data):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Numerator

Net income

$

51,118

$

508,153

$

353,152

$

876,102

Less: Gain (loss) attributable to

noncontrolling interest

659

(380)

594

(1,471)

Net income attributable to Cal-Maine

Foods, Inc.

$

50,459

$

508,533

$

352,558

$

877,573

Denominator

Weighted-average common shares

outstanding, basic

47,299

48,798

47,866

48,774

Effect of dilutive restricted shares

115

173

137

188

Weighted-average common shares

outstanding, diluted

47,414

48,971

48,003

48,962

Net income per common share

attributable to Cal-Maine Foods, Inc.

Basic

$

1.07

$

10.42

$

7.37

$

17.99

Diluted

$

1.06

$

10.38

$

7.34

$

17.92

Note 8 - Stock Based Compensation

Total

stock-based compensation expense was $

4.0

million and

$

3.4

million for the thirty-nine weeks ended February

28, 2026

and March 1, 2025, respectively.

Unrecognized compensation expense as

a result

of non-vested

shares of

equity-based awards outstanding

under the

Amended

and Restated 2012 Omnibus Long-Term Incentive Plan at February 28,

2026 of $

11.2

million will be recorded over a weighted

average period of

2.3

years. Refer to Part II Item

8, Notes to Consolidated Financial Statements and Supplementary Data, Note

13 – Stock-Based Compensation in our 2025

Annual Report for further information

on our stock compensation plans.

The Company’s equity-based award activity for the thirty-nine

weeks ended February

28, 2026 was as follows:

Number of

Shares

Weighted

Average Grant

Date Fair Value

Outstanding, May 31, 2025

212,717

$

66.93

Granted

95,747

78.69

Vested

(81,358)

54.12

Forfeited

(3,766)

82.85

Outstanding, February 28, 2026

223,340

$

76.37

Index

16

Note 9 – Segment Reporting

The Company has

one

operating and

one

reportable segment, which is the production, packaging, marketing

and distribution of

shell eggs,

prepared foods and egg

products. The Company is managed on a

consolidated basis.

The Company’s

operating segment is

determined on the

basis of

our organizational structure and

information that

is regularly

reviewed by our Chief Operating Decision Maker (“CODM”). The Company’s

CODM is Sherman Miller,

President and Chief

Executive Officer. The CODM reviews net income, which is reported on the Condensed Consolidated Statements of Income,

to

assess the performance of, and

make decisions on

how to

allocate resources to, the

segment. The CODM utilizes

consolidated

expense information regularly provided in the

CODM package in order to assist

with assessing performance and deciding how

to

allocate

resources,

which

align

with

the

consolidated

expense

categories

as

disclosed

on

the

face

of

the

Condensed

Consolidated Statements of Income. The measure of

segment assets is reported on

the Condensed

Consolidated Balance Sheet

as Total assets.

Revenue primarily

derives from

the

sales of

shell

eggs,

prepared foods,

and egg

products throughout

the

United States.

The

Company’s

shell egg

product offerings

include specialty

and conventional

shell

eggs. Specialty shell

eggs include

cage-free,

organic, brown,

free-range, pasture-raised

and nutritionally

enhanced eggs.

Conventional shell

eggs sales

represent

all

other

shell egg sales not sold as specialty shell eggs. The Company’s prepared

foods include offerings such as pre-cooked egg patties,

omelets,

folded and

scrambled egg

formats, hard-cooked

eggs,

pancakes,

waffles,

and specialty

wraps.

Egg

products include

liquid and frozen egg products.

Other sales represent

feed sales, miscellaneous byproducts and

resale products.

The following table provides revenue

disaggregated by product category

(in thousands):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Conventional shell egg sales

$

283,173

$

1,016,438

$

1,152,979

$

2,118,065

Specialty shell egg sales

289,141

328,944

858,299

872,691

Prepared foods

63,626

11,757

219,212

31,134

Egg products

18,360

49,267

89,998

105,716

Other

12,651

11,279

38,563

30,621

$

666,951

$

1,417,685

$

2,359,051

$

3,158,227

The following table provides revenue

disaggregated by sales channel

(in thousands):

Thirteen Weeks Ended

Thirty-nine Weeks Ended

February 28, 2026

March 1, 2025

February 28, 2026

March 1, 2025

Retail

$

560,843

$

1,199,697

$

1,925,993

$

2,679,826

Foodservice

94,389

207,315

371,410

451,040

Other

11,719

10,673

61,648

27,361

$

666,951

$

1,417,685

$

2,359,051

$

3,158,227

Retail customers include primarily national and regional

grocery store chains, club stores,

and companies servicing independent

supermarkets

in

the

U.S.

Foodservice

customers

include

primarily

companies

that

sell

food

products

and

related

items

to

restaurants, convenience

stores, healthcare and education facilities

and hotels.

Note 10 - Commitments and Contingencies

In re Shell Eggs Litigation

Since

November

2025,

the

Company

has

been

named

as

a

defendant

in

several

lawsuits

filed

in

federal

courts

alleging

substantially identical claims, including: (1) the following lawsuits in the Southern

District of Indiana: (a) King Kullen Grocery

Co., Inc.

v.

Cal-Maine Foods,

Inc., et

al., Case

No. 1:25-cv-2274,

(b) Nineteenseventynine LLC

d/b/a The

Breakfast Joynt

v.

Cal-Maine Foods, Inc., et

al., Case No. 1:25-cv-2301, (c)

Taylor Egg

Products, Inc. v.

Cal-Maine Foods, Inc., et

al., Case No.

1:25-cv-2554, (d) Hudson

v.

Cal-Maine Foods,

Inc. et

al., Case

No. 1:25-cv-02573,

(e) Brandon

Huyler v.

Cal-Maine Foods,

Inc., et al., Case No. 1:26-cv-00135, and (f) Gloria Emery,

Carol Goldberg, and Casey Whalen v.

Cal-Maine Foods, Inc., et al.,

Case

No.

1:26-cv-00135; (2)

the

following

lawsuits in

the

Northern

District

of

Illinois: (a)

Birchmans

Parisian,

LLC

(d/b/a

Index

17

Lisciandro's Restaurant) v. Cal-Maine Foods, Inc., et al., Case No. 1:25-cv-14030, (b) Phil-N-Cindy's Lunch, Inc. v.

Cal-Maine

Foods, Inc.,

et al.,

Case No.

1:25-cv-14082, (c) Yell

-O-Glow Corporation v.

Cal-Maine Foods, Inc.,

et al.,

Case No.

1:25-cv-

15084, and (d) Tariq

Habash, Delia Govea, Andrew Phillips,

and Catalina Torres

v.

Urner Barry Publications, Inc., Cal-Maine

Foods, Inc., et al., Case No. 1:25-cv-14112;

(3) the following lawsuits in the Western

District of Wisconsin: (a) Matthew Edlin

v.

Cal-Maine Foods,

Inc., et

al., Case

No. 3:25-cv-946,

and (b)

India Price,

Lakia Session,

and Karen Solomon

v.

Cal-Maine

Foods, Inc.,

et al., Case

No. 3:25-cv-1016; and

(4) the

following lawsuit in the

Western

District of Missouri:

(a) Ryan

v.

Cal-

Maine

Foods,

Inc.,

et

al.,

Case

No.

4:25-cv-00999.

The

lawsuits

generally

allege

that

the

Company,

along

with

other

egg

producers and industry associations, conspired to

artificially inflate the prices of conventional

shell eggs nationwide, primarily

through

manipulation of

industry

price

benchmarks (such

as

the

Urner Barry

Egg

Index and

Eggs

Clearinghouse,

Inc.

spot

market),

coordinated

reporting

and

supply

restrictions,

particularly

during

the

calendar

year

2022

highly

pathogenic

avian

influenza

(“HPAI”)

outbreak.

In

each

case,

the

plaintiff

seeks