v3.26.3
Summary of Significant Accounting Policies
 3 Months Ended
Aug. 29, 2026
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
30,
2026
(the
“2026
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 29,
2026
and
August 30, 2025
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.
Intangible
Assets
Intangible
assets
are
initially recorded
at
fair value
in business acquisitions,
which include primarily
customer
relationships
and
other
definite-lived
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.
The
Company
periodically
evaluates
the
remaining useful
lives of our intangible assets
and
whether events
and
circumstances
continue
to
support
the related
accounting
conclusions.
As of May
31,
2026,
the Company
reassessed
the estimated
useful life
of
certain
intangible
assets
previously
classified
as
with
a
definite
life
and
determined
that
it
was
appropriate
to
reclassify
franchise
rights to
an
indefinite
life. The
use
of an
indefinite life for all franchise
rights contemplates
the Company’s
historical
ability
to
renew
its
franchise
agreements
indefinitely
and
at
little
cost.
Therefore,
cash
flows
derived
from
the
franchise
agreements
are
expected
to
continue
indefinitely.
As of
May
31,
2026,
the
franchise
agreements
intangible
assets
had
an
aggregate
carrying
amount
of
approximately
$
8.6
million and
are
presented
within “Intangible
assets,
net” on
our condensed
consolidated
balance
sheets.
Amortization
expense
decreased
by
approximately
$
399
thousand
for
the thirteen
weeks ended
August
29,
2026
and
future
periods
as
a
result of
this change
in estimate.
As of
August 29,
2026,
the
franchise
agreements
intangible
assets
had
an
aggregate
carrying
value
of
approximately
$
33.6
million with
the
$
25
million acquisition
of
the
franchise
rights further
described in
Indefinite
life assets
are
recorded
at
fair
value
in business
acquisitions
and
represent
franchise
rights, brand names
and
water
rights. They
are
not
amortized,
but
are
reviewed for
impairment
at
least
annually
or more frequently
if impairment
indicators
arise.
Dividends Payable
Dividends are
accrue
d
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 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 first
quarter
of fiscal
2027.
Revenue Recognition
The
Company
recognizes revenue
through
the sale
of its products
to customers
through retail, foodservice
,
industrial 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.
New Accounting Pronouncements and Policies
In
November
2024,
the
Financial
Accounting Standards
Board
(“FASB”) issued Accounting Standards
Update
(“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
pronouncement
s
issued or effective
during the fiscal
year that
had
or are expected
to have
a
material
impact
on our
consolidated
financial
statements.