22
-
Facilitycostsincreaseddueprimarilytoincreasedlaborcosts.Laborcostsincreased16.5%comparedtothefirstquarter of fiscal 2023 primarily due to increase in contract labor in response to labor shortages.
Current indicationsfor cornproject anoverall betterstocks-to-use ratio;however,until thisyear’s harvestis completeand aslongasoutsidefactorsremainuncertain(includingweatherpatternsandtheRussia-Ukrainewaranditseffectonexportmarkets), volatility could remain. Soybean meal supply has remained tight relative to demand in the first quarter of fiscal2024.Processing, packaging, and warehouse
First Quarter – Fiscal 2024 vs. Fiscal 2023
-
Processing, packaging, and warehouse costs remained relatively consistent compared to the first quarter of fiscal 2023.
On a per dozen basis, costs in this category increased due to the decrease in processing volume.Egg purchases and other (including change in inventory)
First Quarter – Fiscal 2024 vs. Fiscal 2023
-
Costs inthis categorydecreased primarilydue tolower shellegg pricesas theaverage costper dozenof outsideeggpurchases decreased 35.8% compared to first quarter of fiscal 2023. The decrease was partially offset by an increase in
the volume of outside egg purchases, causing the percentage of produced to sold to decrease to 91.7% from 93.6%.
Gross profit for the first quarter of fiscal 2024 was $45.4 million compared to $217.5 million for the same period of fiscal 2023.
The decrease of $172.1 million was primarily due to lower conventional egg prices and increased labor costs, partially offset by
lower farm production costs due to the decrease in feed ingredient prices.26
SELLING, GENERAL, AND ADMINISTRATIVE
EXPENSES
Selling,
general,
and
administrative
(“SGA”)
expenses
include
costs
of
marketing,
distribution,
accounting
and
corporate
overhead. The following table presents an analysis of our SGA expenses (in thousands):
SeptemberDecember 2, 2023
August 27,November 26, 2022
$ Change
% Change
Specialty egg expense
$
12,00515,924
$
13,06714,673
$
(1,062)1,251
(8.1)8.5
%
Delivery expense
17,69117,706
19,91618,175
(2,225)(469)
(11.2)(2.6)
%
Payroll, taxes and benefits
12,06611,076
10,98713,827
1,079(2,751)
9.8(19.9)
%
Stock compensation expense
1,0401,061
1,025987
1574
1.57.5
%
Litigation loss contingency accrual
19,648
—
19,648
Other expenses
9,44411,163
8,61210,290
832873
9.78.5
%
Total
$
52,24676,578
$
53,60757,952
$
(1,361)18,626
(2.5)32.1
%
FirstN.M. – Not Meaningful
Second Quarter – Fiscal 2024
vs. Fiscal 2023
Specialty egg expense
-
SpecialtyDuring the second
eggpart of fiscal year2023, the higherprices for conventionaleggs and thecomparatively lower pricesforspecialty eggsdiminishedthe needto promotespecialty eggs.During thesecond quarterof fiscalyear2024, we significantlyincreasedpromotionalprograms,resultinginhigheradvertisingfees.Thiswaspartiallyoffsetbya decreasein a reduction in franchise fees to Eggland’sBest, Inc. Delivery expense
-
Thedecreaseddelivery
expense
decreasedis
primarily
due
to
a
reductiondecrease
in
franchisefuel
feesand
tocontract
Eggland’strucking
Best,expenses
Inc.in
asthe
wellassecond reduced sales volume of specialty eggs.
Delivery expense
-
The decreased delivery expense is primarily due to a decrease in fuel and contract trucking expenses in the first quarter
of fiscal 2024 compared to the firstsecond quarter of fiscal 2023.
Payroll, taxes and benefits expense
-
The
increasedecrease
in payroll,
taxes and
benefits expense
is due
to
ana
increase indecrease
salaries andin accrued
wagesbonuses compared
to the
firstsecondquarter of fiscal year 2023.
Litigation loss contingency accrual
-
Thelitigationlosscontingencyaccrualof$19.6millionrelatestoajurydecisionreturnedonDecember1,2023in pendinganti-trustlitigation.Seefurtherdiscussionin Condensed Consolidated Financial Statements included in this QuarterlyReport. Other expense
-
The
increase
in
other
expense
is
primarily
due an
increase in duetoincreasedlegal
fees in thecosts
first quarter ofincurred
fiscal 2024 compared
to
thesecondquarterofthe first quarter of fiscal 2023.
December 2, 2023
November 26, 2022
$ Change
% Change
Specialty egg expense
$
27,929
$
27,740
$
189
0.7
%
Delivery expense
35,397
38,091
(2,694)
(7.1)
%
Payroll, taxes and benefits
23,142
24,814
(1,672)
(6.7)
%
Stock compensation expense
2,101
2,012
89
4.4
%
Litigation loss contingency accrual
19,648
—
19,648
Other expenses
20,607
18,902
1,705
9.0
%
Total
$
128,824
$
111,559
$
17,265
15.5
%
N.M. - Not Meaningful
Twenty-six weeks –Fiscal 2024 vs. Fiscal 2023