v3.26.1
Summary of Significant Accounting Policies (Policy)
 12 Months Ended
May 30, 2026
Summary of Significant Accounting Policies [Abstract]  
Nature of Operations
Nature of Operations
Cal
-Maine Foods,
Inc. (“we,”
“us,”
“our,”
or the
“Company”)
is the
largest
egg
company
in the United
States
(“U.S.”)
and a
leading
player
in
the
egg-based
food
industry.
The
Company’s
shell
egg
portfolio
spans
the
full
egg
value
ladder
—from
conventional
to
specialty,
including
cage-free,
nutritionally
enhanced,
organic,
brown,
pasture
-raised, and
free-range
eggs—
serving both retail and foodservice
customers nationwide. Cal
-Maine Foods also participates
in
the growing prepared foods
sector,
with offerings
such as pre-cooked
egg patties,
omelets,
folded and
scrambled egg
formats,
hard
-cooked eggs, pancakes,
waffles,
and specialty
wraps.
Our branded
portfolio includes
Eggland’s
Best®, Land
O’Lakes®,
Farmhouse
Eggs®, 4Grain®,
Sunups®,
Van’s®,
MeadowCreek
Foods®,
and Crepini®.
We
sell most of
our products
throughout
much of
the U.S.
and aim
to maintain
efficient, state
-of-the-art
operations
located close to our
customers. We
were founded
in
1957 and
are headquartered in Ridgeland,
Mississippi.
Principles of Consolidation
Principles of Consolidation
The consolidated
financial statements
include the accounts
of all wholly-owned
subsidiaries
and of majority
-owned subsidiaries
over which
we exercise
control. All
significant intercompany
transactions
and
accounts
have
been eliminated
in consolidation.
Fiscal Year
Fiscal Year
The
Company’s
fiscal
year
-end is on
the Saturday
closest to May
31.
The fiscal
years ending
on May
30,
2026,
May 31,
2025,
June 1, 2024
each
included
52
weeks.
Use of Estimates
Use of Estimates
The preparation
of the consolidated
financial
statements
in conformity
with generally accepted
accounting
principles (“GAAP”)
in the United
States of
America requires
management
to make estimates
and assumptions
that affect
the amounts
reported in the
consolidated
financial
statements
and
accompanying
notes. Actual
results could differ
from
those estimates.
Cash and Cash Equivalents
Cash and Cash Equivalents
The
Company
considers
all
highly
liquid
investments
with
a
maturity
of
three
months
or
less
when
purchased
to
be
cash
equivalents.
We
maintain
bank
accounts
that
are insured
by
the
Federal
Deposit
Insurance
Corporation
up
to
$
250,000
.
The
Company
routinely
maintains
cash
balances
with
certain
financial
institutions
in
excess
of
federally
insured
amounts.
The
Company
has not experienced
any loss in such accounts.
The Company
manages this risk through maintaining
cash deposits
and
other highly
liquid
investments
in high quality financial
institutions.
Investment Securities Available-for-Sale
Investment
Securities
Available-for-Sale
The Company
has determined
that its
debt securities
are available
-for-sale investments
and are
classified
as current
because
the
amounts
invested
are
available
for
current
operations.
Available
-for-sale
securities
are
carried
at
fair
value,
based
on
quoted
market
prices
as
of
the
balance
sheet
date,
with
unrealized
gains
and
losses
recorded
in
other
comprehensive
income.
The
amortized
cost of debt securities
is adjusted
for amortization
of premiums and
accretion of
discounts to maturity
and is recorded
in interest income.
The Company
regularly evaluates
changes to the
rating of its debt
securities by
credit agencies
and economic
conditions
to
assess
and
record
any
expected
credit losses
through allowance
for
credit
losses,
limited
to
the
amount
that
fair
value
was less than
the amortized
cost basis.
There was
no
allowance
for credit losses at
May
30, 2026
and
May
31, 2025.
The
cost basis
for realized
gains and
losses on
available
-for-sale securities
is determined
by the
specific identification
method.
Gains and
losses are recognized in other
income (expense)
as “Other,
net”
in the Company’s
Consolidated
Statements
of Income.
Interest
and
dividends
on
securities
classified
as
available
-for-sale
are
recorded
in
“Interest
income
,
net”
in
the
Company’s
Consolidated
Statements
of Income.
Trade Receivables
Trade Receivables
Trade
receivables
are stated
at
their
carrying
values,
which
include
a reserve
for
credit losses.
At May
30,
2026
and
May
31,
2025, reserves
for credit losses
were $
719
thousand
and $
745
thousand,
respectively.
The Company
extends credit to customers
based
on
an
evaluation
of
each
customer
’s
financial
condition
and
credit
history.
Collateral
is generally
not
required.
The
Company
minimizes exposure
to
counter
party
credit
risk through
credit
analysis
and
approvals,
credit limits,
and
monitoring
procedures.
In
determining
our
reserve
for
credit
losses,
receivables
are
assigned
an
expected
loss
based
on
historical
loss
information
adjusted
as
needed
for
economic
and
other
forward-looking
factors.
At
May
30,
2026
and
May
31,
2025,
one
customer
accounted
for approximately
26.2
% and
28.1
% of the
Company’s
trade
accounts
receivable, respectively.
Inventories
Inventories
Inventories of flocks,
feed, supplies, raw materials
and finished
goods are valued
principally
at the lower
of cost or net realizable
value.
The cost
of inventories
is determined
by either the
first-in, first-out method
or the weighted-average
method.
The
cost
associated
with
flocks,
consisting
principally
of
chicks,
feed,
labor,
contractor
payments
and
overhead
costs,
are
accumulated
during a growing period
of approximately
22
weeks. Flock costs
are amortized
to cost
of sales
over the
productive
lives of the
flocks, generally
one
to
two years
. As the amortization
period of the flocks
is relatively
short,
disclosure of
the gross
cost and
accumulated
amortization
is omitted. Flock mortality
is charged to
cost of
sales as
incurred.
Property, Plant and Equipment
Property,
Plant
and Equipment
Property,
plant and
equipment
are stated
at cost.
Depreciation
is provided
by the
straight-line
method
over the
estimated
useful
lives,
which are
15
to
25
years for
buildings
and
improvements
and
3
to
12
years for
machinery
and
equipment.
Expenditures
that
significantly
extend
the
useful
life
of
the
related
assets
are capitalized.
Normal
repairs
and
maintenance
are expensed
as
incurred. When
property, plant,
and equipment
are retired, sold, or otherwise
disposed of, the
asset’s carrying
amount
and related
accumulated
depreciation
are removed from
the accounts
and
any
gain or loss is included
in operations.
When
certain
events or
changes
in
operating
conditions
occur,
asset
lives
may
be
adjusted
and
an
impairment
assessment
may
be
performed
on
the
recoverability
of the
carrying amounts.
Investments in Unconsolidated Entities
Investments
in Unconsolidated
Entities
The equity
method
of accounting
is used
when the
Company
can exert significant
influence
over
an entity,
but does
not control
its
financial
and
operating
decisions.
Under
the
equity
method,
original
investments
are
recorded
at
cost
and
adjusted
by the
Company’s
share of undistributed
earnings or
losses of these entities. Equity investments
without readily determinable
fair values,
when
the
Company
does
not
have
the
ability
to
exercise
significant
influence
over
the
investee,
are
recorded
at
cost,
less
impairment,
plus or minus observable
price changes.
Goodwill
Goodwill
Goodwill
represents
the
excess
of
the
purchase
price
over
the
fair
value
of
the
identifiable
net
assets
acquired.
Goodwill is
evaluated
for impairment
at
least
annually
or
more
frequently
if
impairment
indicators
arise
by
first
performing
a qualitative
assessment
to determine whether a quantitative
goodwill test is necessary.
After assessing
the totality of events or circumstances,
if we
determine
it is more
likely than
not that
the fair
value of
a reporting
unit is
less than
its carrying
amount,
then we perform
additional
quantitative
tests to determine
the magnitude
of any
impairment.
Intangible Assets
Intangible
Assets
Intangible assets
are initially recorded at fair value in business
acquisitions,
which include franchise
rights, customer relationships,
non-compete
agreements, trademarks
and right of use intangibles.
They are amortized
over their estimated
useful lives of
5
to
15
years. The
gross
cost
and
accumulated
amortization
of
intangible
assets
are
removed
when
the
recorded
amounts
are
fully
amortized
and
the asset
is no longer
in use
or the
contract
has
expired. When certain
events
or changes
in
operating
conditions
occur, asset
lives may be adjusted
and an impairment assessment
may be performed on the recoverability of the carrying amounts.
Indefinite life
assets
are recorded at
fair value in
business
acquisitions
and represent
brand names
and water
rights. They are not
amortized,
but are
reviewed for impairment
at
least annually
or more frequently
if impairment
indicators
arise.
Insurance Liabilities and Restricted Cash
Insurance Liabilities and Restricted Cash
The
Company
uses
a
combination
of
insurance
and
self-insurance
programs,
including
a
wholly-owned
captive
insurance
subsidiary
(the “Captive”)
to provide
coverage
for the
potential liabilities
for
workers’
compensation,
auto
liability and general
liability
risks. Liabilities
associated
with these
risks
that
are retained
by the
Company
are not discounted
and
are estimated,
in
part, by
considering
historical
claims experience,
severity
factors
and other
actuarial
assumptions.
These liabilities
are recorded
within
“Accrued
expenses
and other
current
liabilities”
in the
Company’s
Consolidated
Balance
Sheets and
were
$
11.4
million
and
$
8.0
million at May
30, 2026
and
May
31, 2025,
respectively.
The Captive
maintains
certain levels
of cash
and cash
equivalents
which
are restricted
in use
to secure
the insurer’s
obligations
for workers’ compensation,
auto
liability and general
liability programs.
Restricted
cash was $
6.3
million and
$
1.0
million as of
May
30,
2026
and
May
31,
2025,
respectively,
and
is recorded
within
“Prepaid
expenses
and
other
current
assets
”
in
the
Company’s
Consolidated
Balance
Sheets.
The
Company
also maintains
medical
plans
covering substantially
all full-time
employees.
Under the
plan, the
Company
self-
insures its portion of medical claims and
uses stop-loss insurance to limit its portion of medical claims to $
275,000
per occurrence.
Liabilities
associated
with
these
risks
are
estimated
in
part
by
considering
historical
claims
experience,
medical
cost
trends,
demographic
factors, severity
factors
and other
actuarial
assumptions.
The Company’s
expenses
including accruals
for incurred
but not reported
claims were approximately
$
26.6
million, $
22.8
million, and
$
23.0
million in fiscal years
2026, 2025, and
2024,
respectively.
The
liability recorded
for incurred
but not
reported
claims
was
$
4.3
million
and
$
3.0
million as
of May
30, 2026,
and
May
31,
2025,
respectively
and
are
classified
within
“Accrued
expenses
and
other
current
liabilities”
in
the
Company’s
Consolidated
Balance
Sheets.
Dividend Payable
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
stockholders
of its
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.
In accordance
with
our variable
dividend policy,
we will not
pay a cash
dividend to holders
of our Common
Stock with respect
to our fourth
quarter
of fiscal
2026.
Revenue Recognition
Revenue Recognition
The
Company
recognizes revenue
through
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
our
customers,
which
generally
occurs
upon
shipment or delivery
to a customer based
on 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
the subsequent
period.
Shipping And Distribution
Shipping and Distribution
Costs
to
deliver
product
to
customers
are
included
in
selling,
general
and
administrative
expenses
in
the
accompanying
Consolidated
Statements
of Income
and totaled $
108.0
million, $
93.5
million, and
$
72.7
million in fiscal
years 2026,
2025, and
2024,
respectively.
Income Taxes
Income
Taxes
Income
taxes
are
accounted
for
using
the
liability
method.
Deferred
income
taxes
reflect
the
net
tax
effects
of
temporary
differences
between
the
carrying
amounts
of assets
and
liabilities
for
financial
reporting
purposes
and
the
amounts
used
for
income tax
purposes. The Company’s
policy with
respect to evaluating uncertain
tax positions is based upon whether management
believes
it
is more
likely
than
not the
uncertain
tax
positions
will
be
sustained
upon
review
by
the taxing
authorities.
The
tax
positions
must meet
the more-likely-than
-not recognition
threshold
with consideration
given to
the amounts
and probabilities of
the
outcomes
that
could be
realized
upon
settlement
using
the
facts,
circumstances
and
information
at
the reporting
date.
The
Company
will reflect
only
the portion
of
the
tax
benefit
that
will
be
sustained
upon
resolution
of the
position
and
applicable
interest
on the portion of
the tax benefit
not recognized.
The Company
initially and subsequently
measures
the largest amount
of
tax
benefit
that
is greater
than
50% likely
to be
realized
upon
settlement
with
a taxing
authority
that
has
full knowledge
of all
relevant
information.
The
Company
records
interest
and
penalties
on
uncertain
tax
positions
as
a
component
of
income
tax
expense.
Based
upon
management’s
assessment,
there are
no uncertain
tax
positions expected
to have
a material
impact
on the
Company’s
consolidated
financial
statements.
Business Combinations
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,
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.
Gain (Loss) on Involuntary Conversions
Gain (Loss)
on Involuntary
Conversions
The
Company
maintains insurance
for both
property
damage
and
business interruption
relating
to catastrophic
events, such
as
fires,
hurricanes,
tornadoes
and
other acts
of God,
and
is eligible
to
participate
in U.S.
Department
of Agriculture
(“USDA”)
indemnity
and
compensation
programs
for
certain
losses
due
to
disease
outbreaks
such
as
highly
pathogenic
avian
influenza
(“HPAI”).
Specifically,
the Animal
Health Protection
Act authorizes
the USDA to
provide indemnity
payments
to producers for
birds and
eggs
that
must be destroyed
during a
disease response.
Payments
received under
these programs
are based
on the
fair
market
value
of the
poultry
and/or
eggs at the
time that
HPAI
virus
is detected
in the
flock.
Other covered
costs
include
feed,
depopulation
and
disposal costs,
and
virus elimination
costs.
The
USDA
does
not provide
indemnity
for income
or
production
losses
suffered
due
to
downtime
or
other
business
disruptions
nor
for
indirect
continuing
expenses.
Recoveries
received
for
property
damage,
business
interruption
and
disease
outbreaks
in excess
of or
less than
the
net book
value
of damaged
assets,
including poultry,
clean-up and
demolition costs, and other direct post-event costs are recorded within
“Gain (loss) on involuntary
conversions”
in the
period received
or committed
when all contingencies
associated
with the recoveries are
resolved.
Loss Contingencies
Loss Contingencies
Certain conditions may
exist as of the date the consolidated financial statements are issued that
may result
in
a loss to the Company
but which will
only be resolved
when one or
more future events
occur or fail to occur.
The Company’s
management
and its legal
counsel
assess
such
contingent
liabilities,
and
such assessment
inherently
involves
an
exercise
of
judgment.
In assessing
loss
contingencies
related
to
legal
proceedings
that
are pending
against
the
Company
or unasserted
claims that
may
result in
such
proceedings,
the Company’s
legal
counsel evaluates
the perceived
merits of
any legal
proceedings
or unasserted
claims as
well
as the
perceived merits
of the
amount
of relief sought or expected
to be sought
therein.
If the
assessment
of a
contingency
indicates
it is probable
that
a material
loss has
been incurred
and
the amount
of the
liability
can be estimated,
the estimated
liability would
be accrued
in the Company’s
consolidated
financial statements.
If the assessment
indicates a potentially
material loss contingency is not probable,
but is reasonably
possible, or is
probable but
cannot
be estimated,
then
the nature
of the
contingent
liability,
together
with an
estimate
of the
range
of possible
loss
if determinable
and
material,
would be
disclosed.
Loss contingencies
considered
remote are
generally
not disclosed
unless they
involve
guarantees,
in which
case
the nature
of the
guarantee
would be disclosed.
The Company
expenses
the costs
of litigation as
they
are incurred.
New Accounting Pronouncements and Policies
New Accounting Pronouncements and Policies
In December
2023, the
FASB
issued 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 fiscal
periods
beginning
after
December
15,
2024.
The
Company
has adopted
ASU
2023-09
for the
year
ended
May
30, 2026,
on a
prospective
basis.
See
Income
Taxes
for additional
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.