| Segment Reporting |
Note 15 – Segment Reporting The Company previously managed its business as one operating and reportable segment. Effective in the fourth quarter of 2026, the Company revised its internal reporting to change the manner in which its business is managed, which reflects a focus on managing operations based on the Company’s product categories rather than on a consolidated basis. As a result, the Company identified three reportable segments: Conventional Shell Eggs, Specialty Shell Eggs, and Prepared Foods. The Company’s remaining operations , which include co-pack shell eggs, egg products, hard -cooked eggs and other business activities, are not reportable segments, as defined by the applicable accounting standard . All prior fiscal year periods have been recast to reflect the new reportable segments . The Conventional Shell Eggs segment consists primarily of the production, grading, packaging, marketing and distribution of shell eggs sold as conventional shell eggs, which includes our brands Sunups® and Sunny Meadow®.
The Specialty Shell Eggs segment consists primarily of the production, grading, packaging, marketing and distribution of shell eggs sold as cage -free, nutritionally enhanced, organic, brown, pasture -raised and free-range eggs. This segment ® and 4Grain® as well as branded products from our membership of Eggland’s Best, Inc. cooperative which includes Land O’ Lakes®. The Prepared Foods segment consists primarily of the production , packaging, marketing and distribution of prepared foods offerings such as pre-cooked egg patties, omelets, folded and scrambled egg formats , pancakes, waffles, and specialty wraps. This segment includes our brands Crepini®. The Company’s operating segment s are 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. Segment income is utilized during our forecasting process to assess profitability, strategic initiatives and capital investments. The CODM primarily compares actual performance of segment sales and segment income to prior period results and periodic forecasts to assist with assessing performance and deciding how to allocate resources. The accounting policies of the segments are generally the same as those presented in Segment SG&A represents direct costs associated with each segment for mar keting, delivery and employee costs. Other – segment income represents the total segment income from other operating segments such as co-pack shell egg, egg products, hard -cooked eggs and other business activities that do not individually meet the quantitative thresholds for separate disclosure. Unallocated Corporate SG&A represents overhead such as corporate payroll related expenses, legal and professional fees, amortization and other expenses that are not used to measure segment income and is managed at the corporate office. Intersegment sales represent sales between segments as part of our vertical integration. Intersegment sales from the Conventional and Specialty Shell Egg segments are primarily sales related to our non-reportable egg products or hard -cooked segments. Conventional and Specialty Shell Egg intersegment sales are transferred at discounted fixed rates to account for undergrad es and yield loss, market rates, or at production costs. The Company does not report total assets by segment as operations are highly integrated, and assets are shared amongst segments. The CODM does not assess performance or allocate resources based on segment assets. Segment results, including the significant expense categories regularly provided to the CODM, are provided below (in thousand s):
Fiscal year ended May 30, 2026 Conventional Shell Eggs Eggs Segments Net sales - external customers $ 1,309,557 $ 1,049,228 $ 244,802 $ 2,603,587 38,519 21,230 — 59,749 1,348,076 1,070,458 244,802 2,663,336 Segment COGS 1,059,179 777,920 185,370 2,022,469 Segment SG&A 72,256 110,994 25,550 208,800 Segment income $ 216,641 $ 181,544 $ 33,882 $ 432,067 19,044 Unallocated corporate SG&A (108,353) Gain on involuntary conversions 8,819 Loss on disposal of fixed assets (1,391) 350,186 60,818 Income before income taxes $ 411,004
Fiscal year ended May 31, 2025 Conventional Shell Eggs Eggs Segments Net sales - external customers $ 2,703,502 $ 1,126,601 $ 4,050 $ 3,834,153 52,357 28,350 — 80,707 2,755,859 1,154,951 4,050 3,914,860 Segment COGS 1,393,212 717,411 4,511 2,115,134 Segment SG&A 72,644 103,938 1,658 178,240 Segment income $ 1,290,003 $ 333,602 $ (2,119) $ 1,621,486 42,091 Unallocated corporate SG&A (127,141) Loss on involuntary conversions (156) Gain on disposal of fixed assets 259 1,536,539 66,603 Income before income taxes $ 1,603,142
Fiscal year ended June 1, 2024 Conventional Shell Eggs Eggs Segments Net sales - external customers $ 1,226,903 $ 863,297 $ 2,090,200 20,389 10,322 30,711 1,247,292 873,619 2,120,911 Segment COGS 970,031 648,236 1,618,267 Segment SG&A 63,560 89,188 152,748 Segment income $ 213,701 $ 136,195 $ 349,896 33,566 Unallocated corporate SG&A (94,516) Gain on involuntary conversions 23,532 Loss on disposal of fixed assets (26) 312,452 47,519 Income before income taxes $ 359,971 The following table shows the reconciliation of net sales to consolidated results (in thousands):
June 1, 2024 Total reportable segments $ 2,603,587 $ 3,834,153 $ 2,090,200 308,045 427,732 236,243 Total consolidated net sales $ 2,911,632 $ 4,261,885 $ 2,326,443 Other – segment sales represent sales from our non-reportable segments which includes co-pack shell egg sales, egg product sales, hard -cooked eggs and other business activities. Revenue primarily derives from sales throughout the U.S. The following table provides revenue disaggregated by segment and by sales channel (in thousands):
Retail Foodservice Other Total $ 1,099,245 $ 193,614 $ 16,698 $ 1,309,557 952,556 92,343 4,329 1,049,228 92,031 104,157 48,614 244,802 245,415 60,269 2,361 308,045 $ 2,389,247 $ 450,383 $ 72,002 $ 2,911,632
Retail Foodservice Other Total $ 2,247,913 $ 424,133 $ 31,456 $ 2,703,502 1,022,253 98,508 5,840 1,126,601 4,050 — — 4,050 337,489 89,347 896 427,732 $ 3,611,705 $ 611,988 $ 38,192 $ 4,261,885
Retail Foodservice Other Total $ 1,007,282 $ 210,423 $ 9,198 $ 1,226,903 835,826 25,879 1,592 863,297 198,943 36,972 328 236,243 $ 2,042,051 $ 273,274 $ 11,118 $ 2,326,443 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 restaura nts, healthcare and education facilities and hotels. Our largest customer, Walmart Inc. (including Sam’s Club) accounted for 30.0 %, 33.6 % and 34.0 % of net sales dollars for fiscal 2026, 2025, and 2024, respectively. |