Cal-Maine Foods Inc (CALM)
Profitability ratios
Return on sales
| May 31, 2025 | Jun 1, 2024 | May 31, 2024 | Jun 3, 2023 | May 31, 2023 | |
|---|---|---|---|---|---|
| Gross profit margin | 43.43% | 23.28% | 23.28% | 38.03% | 38.03% |
| Operating profit margin | 36.40% | 13.43% | 13.43% | 30.76% | 30.76% |
| Pretax margin | 37.62% | 15.55% | 15.47% | 31.78% | 31.74% |
| Net profit margin | 28.63% | 11.95% | 11.94% | 24.10% | 24.09% |
The analysis of Cal-Maine Foods Inc.'s profitability ratios over the specified periods indicates notable fluctuations across the fiscal years analyzed.
The gross profit margin experienced a significant decline from 38.03% as of May 31, 2023, and June 3, 2023, to a low of 23.28% by May 31, 2024 and June 1, 2024. Subsequently, there was a marked rebound to 43.43% as of May 31, 2025. This variation suggests heightened volatility in the company's ability to control cost of goods sold relative to revenue, possibly due to changes in input costs, product mix, or pricing strategies.
Operating profit margins paralleled this trend, decreasing from approximately 30.76% in mid-2023 to 13.43% at the end of May 2024, which indicates a compression in operating efficiency or increased operating expenses during that period. By the end of May 2025, the operating margin recovered substantially to 36.40%, reflecting an improvement in core profitability and operating leverage.
Pretax margins mirrored the pattern observed in other profitability ratios, declining from around 31.74%-31.78% in mid-2023 to 15.47%-15.55% at the end of the 2024 period. The subsequent increase to 37.62% as of May 31, 2025, underscores a recovery in earnings before taxes, potentially driven by better cost management, revenue growth, or favorable market conditions.
Net profit margins followed a similar trajectory, decreasing from roughly 24.09%-24.10% in mid-2023 down to 11.94%-11.95% at the end of May 2024 and rebounding significantly to 28.63% as of May 31, 2025. This indicates a reduction in overall profitability during 2024 but a strong recovery by the following year.
Overall, the profitability ratios reflect a period of substantial decline during 2024, followed by a notable recovery in 2025. This pattern suggests that Cal-Maine Foods Inc. experienced challenges in maintaining profitability during the mid-year period, possibly due to external cost pressures or market dynamics, but managed to restore profitability levels strongly by the subsequent year.
Return on investment
| May 31, 2025 | Jun 1, 2024 | May 31, 2024 | Jun 3, 2023 | May 31, 2023 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 50.01% | 14.30% | 14.30% | 49.51% | 49.51% |
| Return on assets (ROA) | 39.32% | 12.72% | 12.72% | 38.78% | 38.78% |
| Return on total capital | 62.63% | 20.12% | 20.03% | 62.10% | 62.02% |
| Return on equity (ROE) | 47.65% | 15.44% | 15.44% | 47.05% | 47.05% |
The analysis of Cal-Maine Foods Inc.'s profitability ratios over the specified periods reveals significant fluctuations with underlying insights into the company's financial performance.
The Operating Return on Assets (Operating ROA) experienced a sharp decline from 49.51% as of May 31, 2023, to 14.30% by May 31, 2024, indicating a substantial reduction in the company's efficiency in generating operating income from its assets during that period. This figure then rebounded to 50.01% by May 31, 2025, suggesting an improvement in core operational efficiency.
Similarly, the Return on Assets (ROA), measuring overall asset profitability, diminished dramatically from 38.78% in May 2023 to 12.72% in May 2024, reflecting reduced net profitability relative to total assets. The ROA then recovered to 39.32% by May 2025, aligning with the previous year's high levels and indicating a notable resurgence in the company's net income generation capability.
The Return on Total Capital displayed a comparable trend, declining from approximately 62% in 2023 to around 20% in 2024, before again rising to over 62% in 2025. This pattern underscores significant fluctuations in the company's ability to generate returns on its combined debt and equity financing, with the observed dip potentially attributable to operational or market challenges in the interim period.
Finally, the Return on Equity (ROE) followed a similar pattern, decreasing markedly from 47.05% in 2023 to 15.44% in 2024, then increasing slightly to 47.65% in 2025. The decline in 2024 suggests a period of reduced profitability for shareholders, while the subsequent recovery indicates a return to more favorable earnings performance.
Overall, the profitability ratios depict a pattern of substantial variability over the periods considered. The notable downturn in 2024 may have been driven by market or operational headwinds, but the subsequent rebound suggests resilience and an ability to restore profitability levels close to or exceeding past performance.