Investors have been trying to get excited about the possibility for a stock market turnaround in 2023, but much of the week between holidays has shown how downbeat Wall Street is right now about market prospects. However, it appeared that investors could get some respite from the downward pressure on Thursday morning. Futures on major market benchmarks were all higher in premarket trading, with the Nasdaq Composite (^IXIC -0.58%) seeing the most significant gains, rising three-quarters of a percent.

This week has been a slow one for companies releasing their financial results. That's partially due to the fact that the primary earnings season isn't set to start for another couple of weeks, and it also reflects the generally lower levels of business activity in some businesses in the week before New Year's. However, one company, Cal-Maine Foods (CALM 0.07%), did share its quarterly report with investors late Wednesday afternoon. As it turns out, what Cal-Maine said gives an interesting view into the situation that many consumer-facing businesses are currently experiencing as they make plans for 2023.

Cal-Maine stock falls despite record financial results

Shares of Cal-Maine Foods were down about 4% in premarket trading on Thursday morning. Investors reacted negatively to the release of the egg specialist's financial report for the fiscal second quarter that ended Nov. 28, even though they included huge increases in many key metrics.

The numbers from Cal-Maine were positively stunning. Sales topped the $800 million mark, soaring 110% year over year and setting a new quarterly revenue record for the company. Profit jumped to nearly $200 million, working out to $4.07 per share in earnings, also a record. That represented a huge turnaround from where Cal-Maine was a year ago, with the food stock's business barely posting a profit at all in the second quarter of fiscal 2022.

Cal-Maine has seen a strange phenomenon hit its market, as the market dynamics of conventional eggs and specialty eggs are behaving inconsistently with how they normally would. Even as other consumer-facing businesses have seen customers trade down to lower-quality items due to budget constraints, Cal-Maine has seen its specialty egg volume jump while conventional egg volume has decreased. That's partly because specialty egg prices are now actually lower than prices of conventional eggs in many markets, reflecting the disruptions that are affecting efficient market behavior. In addition, mandates from states like California and Massachusetts requiring grocery stores to sell cage-free eggs has helped Cal-Maine's specialty egg demand stay high.

Also, even though rising prices for eggs are good for Cal-Maine's business, the company is still facing price pressures for its input costs. Farm production costs were up 22% year over year, and the price of feed jumped nearly 30% from the year-ago period. With lower supplies of corn and soybeans available due to the Russian invasion of Ukraine and ongoing pandemic-related global disruptions, it's been more difficult for Cal-Maine to get what it needs to feed its birds and keep producing eggs.

How will Cal-Maine fare in 2023?

Cal-Maine warned that some of the pressures on its business could continue for the rest of its 2023 fiscal year. Ongoing upward price pressures on feed crops will keep its costs at elevated levels, and Cal-Maine intends to keep investing in long-term initiatives to make transitions toward more specialty egg products that it hopes will have higher margins in the long run.

For now, dividend investors will get a nice reward from Cal-Maine's strong results. Because the egg producer has a variable dividend policy that's tied to profits, shareholders can expect a dividend of $1.35 per share for the quarter. That's more than 2% of the stock's price, and it represents a big jump from the $0.85 per share in dividends that Cal-Maine paid in October and the $0.75 per share dividend from July.

Many consumer-oriented businesses have been able to pass through higher costs to their customers, and in some cases, the record results they've posted have drawn criticism from those saying they're unfairly benefiting at consumers' expense. That's a tightrope Cal-Maine and many consumer businesses will have to keep walking in 2023, and investors hope they'll find ways forward that can keep everyone as happy as possible.