Grocery Outlet (NASDAQ:GO) Posts Quarterly Earnings Results, Misses Expectations By $0.02 EPS

Grocery Outlet (NASDAQ:GO) issued its quarterly earnings results on Wednesday. The company reported $0.19 earnings per share for the quarter, missing the consensus estimate of $0.21 by ($0.02), FiscalAI reports. Grocery Outlet had a positive return on equity of 5.67% and a negative net margin of 4.80%.The firm had revenue of $1.22 billion during the quarter, compared to analysts’ expectations of $1.23 billion. During the same period in the previous year, the company earned $0.15 earnings per share. Grocery Outlet’s revenue for the quarter was up 10.7% on a year-over-year basis. Grocery Outlet updated its FY 2026 guidance to 0.450-0.550 EPS.

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

• CEO Jason Potter said Q4 results were “unacceptable” and attributed the comp deceleration to three drivers: a meaningfully tougher consumer environment, an erosion in customer value perception, and supply-chain constraints that reduced the opportunistic “treasure hunt” items that drive units-per-transaction.
• Management is rebuilding the opportunistic mix—adding DC capacity, improving forecasting and merchandising (now unified under Matt Deli)—and reports the opportunistic sales mix is up roughly 200 basis points and shipments up ~150 bps, with early monthly comp improvement after promotional activity.
• The company will close 36 stores (24 in the East), expects ~$12 million annualized adjusted EBITDA benefit, but took large Q4 charges including $109.8 million long?lived asset impairments and a $149 million goodwill impairment and expects ~$57 million cash closure costs this year.
• FY?2026 guidance is cautious—comps of -2% to flat, net sales of $4.6B–$4.72B, adjusted EBITDA of $220M–$235M, and adjusted EPS of $0.45–$0.55—reflecting store closures, promotional spend and the loss of the 2025 53rd week.
• The company launched a strategic review of UGO and a broader store program (150 refreshes planned and 30–33 net new openings in 2026) with stricter underwriting and targeted IRRs of ~25%–30% for new cohorts, signaling a more disciplined growth approach.

Grocery Outlet Stock Down 27.9%

GO stock opened at $6.34 on Friday. The stock has a market capitalization of $622.19 million, a P/E ratio of -2.77, a P/E/G ratio of 1.79 and a beta of 0.50. The company has a debt-to-equity ratio of 0.40, a current ratio of 1.30 and a quick ratio of 0.25. Grocery Outlet has a 1-year low of $6.20 and a 1-year high of $19.41. The business has a fifty day moving average price of $9.72 and a 200-day moving average price of $12.70.

Wall Street Analyst Weigh In

Several analysts recently weighed in on GO shares. Morgan Stanley cut their price target on Grocery Outlet from $11.00 to $7.00 and set an “equal weight” rating on the stock in a research note on Thursday. Jefferies Financial Group reissued a “hold” rating and issued a $7.00 target price (down from $18.00) on shares of Grocery Outlet in a research note on Thursday. DA Davidson set a $8.00 price target on Grocery Outlet in a report on Thursday. Wells Fargo & Company dropped their price target on shares of Grocery Outlet from $10.50 to $7.00 and set an “equal weight” rating on the stock in a research note on Thursday. Finally, Deutsche Bank Aktiengesellschaft set a $11.00 price objective on shares of Grocery Outlet in a research report on Thursday, January 8th. Eleven research analysts have rated the stock with a Hold rating and two have given a Sell rating to the company’s stock. According to MarketBeat.com, the company has a consensus rating of “Reduce” and a consensus target price of $10.68.

Hedge Funds Weigh In On Grocery Outlet

A number of hedge funds have recently bought and sold shares of the business. Bridgefront Capital LLC bought a new stake in shares of Grocery Outlet in the fourth quarter worth $133,000. Bank of Montreal Can purchased a new position in Grocery Outlet in the fourth quarter worth about $142,000. Northwestern Mutual Wealth Management Co. increased its position in shares of Grocery Outlet by 20,326.9% during the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 15,933 shares of the company’s stock valued at $161,000 after purchasing an additional 15,855 shares during the last quarter. CIBC Bancorp USA Inc. purchased a new stake in shares of Grocery Outlet during the 3rd quarter valued at about $162,000. Finally, Shay Capital LLC bought a new position in shares of Grocery Outlet in the 3rd quarter worth approximately $160,000. Hedge funds and other institutional investors own 99.87% of the company’s stock.

Grocery Outlet News Summary

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

• Positive Sentiment: Q4 sales and cash-flow bright spots: revenue rose ~10.7% year?over?year and operating cash flow improved materially, giving management some liquidity to execute restructuring. Q4 deep dive
• Positive Sentiment: Management action on store portfolio: Grocery Outlet retained Gordon Brothers to market leasehold opportunities as part of an Optimization Plan, signaling steps to monetize underperforming locations. Gordon Brothers retained
• Neutral Sentiment: Company published the Q4 results, slide deck and earnings-call transcript; investors can review management commentary for details on the Optimization Plan and turnaround timeline. Press release / slides
• Negative Sentiment: Big non-cash charges drove a large operating and net loss: management reported ~$113.8M long?lived asset impairment, $149.0M goodwill impairment and ~$45.9M restructuring charges, producing a sizable operating loss and large GAAP net loss. That shock to profitability is the primary catalyst for the selloff. Holzer investor alert
• Negative Sentiment: Guidance missed expectations: FY2026 EPS guidance of $0.45–$0.55 and revenue guidance below consensus signaled slower recovery, prompting analysts to cut forecasts and price targets. Zacks earnings recap
• Negative Sentiment: Store closures and large fiscal loss: company announced closing 36 stores after reporting a $224.9M net loss for fiscal 2025 — a concrete sign of execution issues and margin pressure. Store closures
• Negative Sentiment: Analyst downgrades and price-target cuts: multiple firms (Jefferies, Morgan Stanley, Wells Fargo, DA Davidson, Telsey, others) lowered ratings/targets after Q4 results — increases selling pressure and reduces buy-side conviction. Jefferies downgrade
• Negative Sentiment: Legal/investigator scrutiny: two law firms announced investigations into possible securities-law issues tied to the company’s disclosures, adding regulatory risk and potential litigation overhang. Ademi investigation

Grocery Outlet Company Profile

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.