Grocery Outlet (NASDAQ:GO) Announces Quarterly Earnings Results, Beats Expectations By $0.07 EPS

Grocery Outlet (NASDAQ:GO) posted its quarterly earnings results on Wednesday. The company reported $0.20 EPS for the quarter, topping analysts’ consensus estimates of $0.13 by $0.07, FiscalAI reports. The business had revenue of $1.19 billion during the quarter, compared to analysts’ expectations of $1.17 billion. Grocery Outlet had a positive return on equity of 5.69% and a negative net margin of 8.08%.

Here are the key takeaways from Grocery Outlet’s conference call:

• Second-quarter results exceeded expectations: Revenue rose 1% to $1.19 billion, comparable sales declined just 0.3%, and adjusted EBITDA of $65.7 million and adjusted EPS of $0.20 surpassed the company’s outlook.
• The improved opportunistic assortment is gaining traction, with opportunistic comparable sales accelerating by more than 500 basis points from the start of Q1 and the mix expanding by more than 300 basis points; grocery comps reached 3.5% in Q2.
• Management raised the low ends of its full-year guidance ranges, now expecting comparable sales between negative 0.5% and flat, adjusted EBITDA of $225 million to $235 million, and adjusted EPS of $0.51 to $0.55.
• A multistate Cyclospora outbreak, despite no recalled Grocery Outlet products, pressured produce sales and is expected to reduce Q3 comparable sales by roughly 100 basis points while increasing shrink and weighing on gross margin.
• Grocery Outlet closed 36 underperforming stores in April and remains on track to remove a $12 million annualized adjusted EBITDA drag, while 2027 openings will be weighted toward lower-risk infill markets and store growth will remain measured.

Grocery Outlet Stock Performance

Shares of Grocery Outlet stock traded up $0.34 on Wednesday, hitting $10.17. The stock had a trading volume of 4,317,016 shares, compared to its average volume of 3,146,851. Grocery Outlet has a twelve month low of $5.66 and a twelve month high of $19.23. The business’s 50 day moving average is $9.55 and its two-hundred day moving average is $8.63. The company has a quick ratio of 0.27, a current ratio of 1.28 and a debt-to-equity ratio of 0.59. The stock has a market cap of $1.01 billion, a price-to-earnings ratio of -2.62, a price-to-earnings-growth ratio of 15.51 and a beta of 0.65.

Wall Street Analysts Forecast Growth

Several brokerages have recently commented on GO. Weiss Ratings downgraded Grocery Outlet from a “sell (d)” rating to a “sell (d-)” rating in a research note on Thursday, July 30th. Wells Fargo & Company lifted their price objective on shares of Grocery Outlet from $7.00 to $9.00 and gave the stock an “equal weight” rating in a research report on Thursday, May 14th. TD Cowen upped their price objective on shares of Grocery Outlet from $6.00 to $8.00 and gave the company a “hold” rating in a report on Thursday, May 14th. Finally, DA Davidson increased their price objective on shares of Grocery Outlet from $7.00 to $9.00 and gave the company a “neutral” rating in a research report on Thursday, May 14th. Eleven analysts have rated the stock with a Hold rating and two have issued a Sell rating to the company. According to data from MarketBeat, the stock has an average rating of “Reduce” and a consensus price target of $9.65.

Insiders Place Their Bets

In other news, insider Paul Blaine Miller purchased 5,000 shares of the company’s stock in a transaction that occurred on Thursday, June 25th. The stock was acquired at an average cost of $9.50 per share, with a total value of $47,500.00. Following the acquisition, the insider owned 64,171 shares in the company, valued at approximately $609,624.50. This trade represents a 8.45% increase in their position. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Insiders own 5.60% of the company’s stock.

Institutional Inflows and Outflows

Several large investors have recently added to or reduced their stakes in GO. Royal Bank of Canada grew its stake in shares of Grocery Outlet by 5.8% in the first quarter. Royal Bank of Canada now owns 122,565 shares of the company’s stock valued at $1,713,000 after acquiring an additional 6,736 shares in the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its stake in Grocery Outlet by 14.1% in the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 357,856 shares of the company’s stock worth $5,003,000 after purchasing an additional 44,214 shares in the last quarter. Creative Planning raised its stake in Grocery Outlet by 25.4% in the 2nd quarter. Creative Planning now owns 16,104 shares of the company’s stock worth $200,000 after purchasing an additional 3,263 shares in the last quarter. JPMorgan Chase & Co. boosted its holdings in Grocery Outlet by 13.8% in the 2nd quarter. JPMorgan Chase & Co. now owns 220,432 shares of the company’s stock valued at $2,738,000 after purchasing an additional 26,725 shares during the period. Finally, Franklin Resources Inc. bought a new stake in Grocery Outlet in the 2nd quarter valued at about $149,000. Institutional investors own 99.87% of the company’s stock.

About Grocery Outlet

Grocery Outlet Holding Corp. (NASDAQ: GO) is a specialty discount retailer that offers consumers deeply discounted groceries by purchasing excess inventory, closeouts, and overstocks from manufacturers and distributors. Headquartered in Emeryville, California, the company operates two primary banners—Grocery Outlet and Fresh2Go—with a combined footprint of more than 400 stores. Its product assortment spans fresh produce, meat, dairy, bakery items, household staples, natural and organic offerings, and select specialty products, all sold at significant markdowns compared to conventional supermarkets.

The company’s unique buying model enables it to source inventory through opportunistic purchases of surplus freight, discontinued items, and closeout deals, which it then passes on as savings to its customers.