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

Grocery Outlet (NASDAQ:GO) posted its earnings results on Wednesday. The company reported $0.20 earnings per share for the quarter, beating the consensus estimate of $0.13 by $0.07, FiscalAI reports. The firm had revenue of $1.19 billion during the quarter, compared to analyst estimates of $1.17 billion. Grocery Outlet had a negative net margin of 8.08% and a positive return on equity of 5.69%. The business’s quarterly revenue was up 1.1% on a year-over-year basis. During the same period in the previous year, the firm earned $0.23 EPS.

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 Up 3.5%

NASDAQ GO opened at $10.17 on Thursday. The business has a fifty day moving average price of $9.59 and a 200 day moving average price of $8.63. Grocery Outlet has a one year low of $5.66 and a one year high of $19.23. The company has a debt-to-equity ratio of 0.59, a quick ratio of 0.27 and a current ratio of 1.28. The company has a market cap of $1.01 billion, a P/E ratio of -2.62, a P/E/G ratio of 15.51 and a beta of 0.65.

Insiders Place Their Bets

In other Grocery Outlet news, insider Paul Blaine Miller bought 10,000 shares of the stock in a transaction on Thursday, June 18th. The shares were bought at an average price of $9.37 per share, with a total value of $93,700.00. Following the purchase, the insider directly owned 59,171 shares in the company, valued at $554,432.27. This trade represents a 20.34% increase in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. Insiders own 5.60% of the company’s stock.

Hedge Funds Weigh In On Grocery Outlet

Several hedge funds and other institutional investors have recently modified their holdings of the business. Aster Capital Management DIFC Ltd boosted its position in Grocery Outlet by 1,030.4% during the fourth quarter. Aster Capital Management DIFC Ltd now owns 2,532 shares of the company’s stock worth $26,000 after acquiring an additional 2,308 shares during the last quarter. Kestra Advisory Services LLC acquired a new stake in Grocery Outlet in the 4th quarter valued at about $35,000. State of Wyoming raised its holdings in Grocery Outlet by 96.9% in the 4th quarter. State of Wyoming now owns 7,886 shares of the company’s stock valued at $80,000 after acquiring an additional 3,880 shares during the last quarter. Olympiad Research LP purchased a new position in Grocery Outlet in the 4th quarter worth approximately $101,000. Finally, XTX Topco Ltd purchased a new position in Grocery Outlet in the 4th quarter worth approximately $105,000. 99.87% of the stock is owned by hedge funds and other institutional investors.

Grocery Outlet News Roundup

Here are the key news stories impacting Grocery Outlet this week:

• Positive Sentiment: Grocery Outlet reported adjusted earnings of $0.20 per share, above consensus estimates ranging from $0.12 to $0.13. Revenue reached $1.19 billion, topping the $1.17 billion estimate and increasing 1.1% from the prior year. Grocery Outlet Q2 Earnings and Revenues Top Estimates
• Positive Sentiment: The company raised its fiscal 2026 net-sales guidance to approximately $4.70 billion-$4.72 billion, a key catalyst because the new outlook is above current analyst expectations. Grocery Outlet Beats Q2 Estimates and Raises FY26 Outlook
• Neutral Sentiment: Reported net income rose to $5.6 million, or $0.06 per diluted share, from $5.0 million, or $0.05 per share, a year earlier. However, the company continued to report a negative net margin, indicating that profitability remains a concern despite the earnings beat. Grocery Outlet Announces Second-Quarter Fiscal 2026 Results
• Negative Sentiment: Comparable-store sales declined 0.3%, showing that underlying customer traffic and sales trends remain soft. Grocery Outlet opened 10 stores but closed 12, ending the quarter with 547 locations across 16 states, which may temper expectations for near-term unit growth. Grocery Outlet Q2 Net Sales Rise to $1.19 Billion

Analysts Set New Price Targets

A number of research analysts have weighed in on GO shares. Wells Fargo & Company upped 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. Weiss Ratings downgraded Grocery Outlet from a “sell (d)” rating to a “sell (d-)” rating in a research report on Thursday, July 30th. TD Cowen increased their target price on Grocery Outlet from $6.00 to $8.00 and gave the company a “hold” rating in a research report on Thursday, May 14th. Finally, DA Davidson boosted their price target on shares of Grocery Outlet from $7.00 to $9.00 and gave the stock a “neutral” rating in a 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. Based on data from MarketBeat, Grocery Outlet presently has a consensus rating of “Reduce” and an average target price of $9.65.

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.