In an SEC Form Q-10 filing on May 27th Sanderson Farms Inc. documented results for Q2 of FY 2022 ending April 30th 2022.
The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)
|
Second Quarter Ending
|
April 30th 2022
|
April 30th 2021
|
Difference (%)
|
|
Sales:
|
$1,539,714
|
$1,133,880
|
+35.8
|
|
Gross profit:
|
$487,787
|
$191,944
|
+154.1
|
|
Operating income:
|
$421,487
|
$127,699
|
+230.1
|
|
Pre-tax Income
Net Income
|
$420,190
$321,190
|
$122,015
$96,911
|
+240.9
+231.4
|
|
Diluted earnings per share:
|
$14.39
|
$4.34
|
+231.6
|
|
Gross Margin (%)
|
31.6
|
16.9
|
+87.0
|
|
Operating Margin (%)
|
27.4
|
11.3
|
+142.5
|
|
Profit Margin (%)
|
20.9
|
8.5
|
+145.8
|
|
Long-term lease liabilities:
|
$11,570
|
$16,122
|
-28.2
|
|
12 Months Trailing:
|
|
|
|
|
Return on Assets (%)
|
24.5
|
|
|
|
Return on Equity (%)
|
36.9
|
|
|
|
Operating Margin (%)
|
16.9
|
|
|
|
Profit Margin (%)
|
12.2
|
|
|
|
Total Assets
|
$2,826,514
|
$2,345,033
|
|
|
Intraday Market Capitalization
|
$4,133,000
|
|
|
Poultry products represented 95 percent of sales. The product mix during the 2nd Quarter expressed as a percentage of sales value comprised:-
Fresh Vacuum-sealed 37.9%
Fresh chill-pack 30.9%
Fresh ice-pack 20.7%
Frozen presentations 5.1%
Prepared chicken 4.9%
Other 0.5%
Comparing Q2 2022 with Q2 2021 net unit revenue increased by 33.6% or $0.31 /lb.
Concurrently feed costs increased by 14.1% or $0.05/lb.
During Q2 Sanderson Farms consumed 32.1 million bushels of corn and 297,000 tons of soybean meal. Feed represented 44.4% of RTC in Q2 2022 (42.1% in Q2 2021)
52-Week Range in Share Price: $155.34 to $201.50. 50-day Moving average, $187.34
Market Close: Thursday May 26th $194.76. Open Friday May 27th post-release $201.12.
Forward P/E 7.4 Beta 0.6
The Q-10 Filing contained the following commentary by management on financial performance.
“Net sales for the second quarter ended April 30, 2022 were $1,539.7 million as compared to $1,133.9 million for the second quarter ended April 30, 2021, an increase of $405.8 million, or 35.8%. Net sales of poultry products for the second quarter ended April 30, 2022 and 2021, were $1,464.0 million and $1,087.2 million, respectively, an increase of $376.8 million, or 34.7%. The increase in net sales of poultry products resulted from a 32.9% increase in the average sales price of poultry products sold and a 1.4% increase in the pounds of poultry products sold, each of which is primarily the result of improved demand from food service customers and supply constraints. During the second quarter of fiscal 2022, the Company sold 1.22 billion pounds of poultry products, up from 1.20 billion pounds during the second quarter of fiscal 2021.
Overall, quoted market prices for poultry products increased during the second quarter of fiscal 2022 as compared to the same quarter of fiscal 2021. When compared to the second quarter of fiscal 2021, Urner Barry average market prices for boneless breast meat, boneless thigh meat and tenders increased by 85.2%, 58.6% and 47.5%, respectively, while Urner Barry average market prices for leg quarters and jumbo wings decreased by 0.6% and 19.8%, respectively. Average realized prices for chicken products sold to retail grocery store customers increased by 13.1% during the second quarter of fiscal 2022 as compared to the same period of fiscal 2021, and retail grocery store demand remains strong.
Net sales of prepared chicken products for the quarters ended April 30, 2022 and 2021 were $75.7 million and $46.6 million, respectively, an increase of 62.3%. This increase is primarily attributable to a 39.9% increase in the average sales price of prepared chicken products sold and a 16.1% increase in the pounds of prepared chicken products sold. The increase in pounds and sales price of prepared chicken products was primarily the result of improved demand from our food service customers. During the second quarter of fiscal 2022, the Company sold 28.4 million pounds of prepared chicken products, up from 24.5 million pounds during the second quarter of fiscal 2021”.
Management of Sanderson Farms anticipates completion of the acquisition by the consortium including Continental Grain and Cargill to be completed during the current quarter.