Cagle's Inc. reported a net (loss) of $(5.7) million or $(1.24) per share for the quarter ended July 2, 2011 compared to net income of $3.5 million or $0.75 per share for the quarter ended July 3, 2010.
Net sales for the first quarter were $81.9 million, up 4.2% from $78.6 million, reflecting an increase in pounds sold of 14.9% and a decrease in sales price for poultry of $0.059 per pound as compared to the same period of fiscal 2011. Quoted market price changes for products for the first quarter of fiscal 2012 versus the same period last year were: leg quarters increased 27.4%, boneless breast decreased 17.6%, breast tenders decreased 11.8%, wing markets decreased 40.3%, and whole birds without giblets were unchanged.
Cost of sales for the first quarter of fiscal 2012 increased 27.1% as compared with the same period last year, from $68.2 million to $86.7 million. Feed ingredient prices for broilers processed in the first quarter of fiscal 2012, which represented 46% of the total cost of sales, increased 68.3% or $16.3 million as compared to the first quarter of fiscal 2011.
Cagle's and the industry's profitability continue to be challenged by high feed cost accentuated by broiler markets pressured by over production, the company said in a statement. Effective the end of August Cagle's will have executed a further cut back in production at its Pine Mountain Valley plant that will result in the company processing 22% less head than capacity.
“Toward the end of July our industry had begun to react in similar fashion with egg sets 6% less than the same period in 2010.” the company said. “These industry cut backs should have a positive effect on markets and final margins in the coming months.”
Source: Cagle’s Inc.