Revenue from Contracts with Customers

6 Months Ended

Nov. 26, 2022

Revenue from Contract with Customers [Abstract]

Revenue from Contract with Customers

Note 7 – Revenue from Contracts with Customers

Satisfaction of Performance Obligation

The vast majority of the Company’s revenue is derived from agreements with customers based on the customer placing an order

for products. Pricing for the most part is determined when the Company and the customer agree upon the specific order, which

establishes the contract for that order.

Revenues are recognized in an amount that reflects the net consideration we expect to receive in exchange for the goods. Our

shell eggs are sold at prices related to independently quoted wholesale market prices or formulas related to our costs of

production. The Company’s sales predominantly contain a single performance obligation. We recognize revenue upon

satisfaction of the performance obligation with the customer which typically occurs within days of the Company and the

customer agreeing upon the order.

Returns and Refunds

Some of our contracts include a guaranteed sale clause, pursuant to which we credit the customer’s account for product that the

customer is unable to sell before expiration. The Company records an allowance for returns and refunds by using historical

return data and comparing to current period sales and accounts receivable. The allowance is recorded as a reduction in sales

with a corresponding reduction in trade accounts receivable.

Sales Incentives Provided to Customers

The Company periodically provides incentive offers to its customers to encourage purchases. Such offers include current

discount offers (e.g., percentage discounts off current purchases), inducement offers (e.g., offers for future discounts subject to

a minimum current purchase), and other similar offers. Current discount offers, when accepted by customers, are treated as a

reduction to the sales price of the related transaction, while inducement offers, when accepted by customers, are treated as a

reduction to the sales price based on estimated future redemption rates. Redemption rates are estimated using the Company’s

historical experience for similar inducement offers. Current discount and inducement offers are presented as a net amount in

‘‘Net sales.’’

Disaggregation of Revenue

The following table provides revenue disaggregated by product category (in thousands):

Thirteen Weeks Ended

Twenty-six Weeks Ended

November 26, 2022

November 27, 2021

November 26, 2022

November 27, 2021

Conventional shell egg sales

$

541,917

$

221,142

$

967,506

$

403,172

Specialty shell egg sales

227,778

146,917

428,598

279,375

Egg products

28,052

11,401

55,692

20,767

Other

3,953

2,263

8,248

3,395

$

801,700

$

381,723

$

1,460,044

$

706,709

Contract Costs

The Company can incur costs to obtain or fulfill a contract with a customer. If the amortization period of these costs is less than

one year, they are expensed as incurred. When the amortization period is greater than one year, a contract asset is recognized

and is amortized over the contract life as a reduction in net sales. As of November 26, 2022 and May 28, 2022, the balance for

contract assets was immaterial.

Contract Balances

The Company receives payment from customers based on specified terms that are generally less than 30 days from delivery.

There are rarely contract assets or liabilities related to performance under the contract.