v3.25.2
Summary of Significant Accounting Policies
 3 Months Ended
Aug. 30, 2025
Summary of Significant Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
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 periods
 
ended on August 30, 2025
and August 31, 2024 included
13
 
weeks.
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
(“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.
 
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,
 
2024.
 
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.