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

Grocery Outlet (NASDAQ:GO) issued its quarterly earnings results on Wednesday. The company reported $0.20 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.13 by $0.07, FiscalAI reports. The firm had revenue of $1.19 billion for the quarter, compared to analysts’ expectations of $1.17 billion. Grocery Outlet had a positive return on equity of 5.57% and a negative net margin of 8.04%.The firm’s revenue for the quarter was up 1.1% on a year-over-year basis. During the same quarter in the previous year, the firm posted $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 Trading Up 6.2%

NASDAQ:GO opened at $10.80 on Friday. The stock has a fifty day moving average price of $9.64 and a two-hundred day moving average price of $8.64. The stock has a market capitalization of $1.07 billion, a price-to-earnings ratio of -2.79, a PEG ratio of 16.04 and a beta of 0.65. The company has a debt-to-equity ratio of 0.59, a quick ratio of 0.27 and a current ratio of 1.28. Grocery Outlet has a 1 year low of $5.66 and a 1 year high of $19.23.

Insider Activity at Grocery Outlet

In related news, insider Paul Blaine Miller purchased 5,000 shares of the stock in a transaction dated Thursday, June 25th. The shares were acquired at an average cost of $9.50 per share, with a total value of $47,500.00. Following the purchase, the insider directly owned 64,171 shares in the company, valued at $609,624.50. This trade represents a 8.45% increase in their position. The acquisition was disclosed in a legal filing with the SEC, which is available through the SEC website. Insiders own 5.60% of the company’s stock.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in the stock. T. Rowe Price Investment Management Inc. increased its stake in Grocery Outlet by 54.0% in the 4th quarter. T. Rowe Price Investment Management Inc. now owns 15,763,945 shares of the company’s stock valued at $159,216,000 after purchasing an additional 5,528,722 shares in the last quarter. Millennium Management LLC raised its holdings in Grocery Outlet by 3,558.0% during the third quarter. Millennium Management LLC now owns 1,825,407 shares of the company’s stock worth $29,298,000 after purchasing an additional 1,775,505 shares during the last quarter. Boston Partners boosted its position in Grocery Outlet by 219.7% during the third quarter. Boston Partners now owns 1,462,633 shares of the company’s stock worth $23,475,000 after purchasing an additional 1,005,126 shares in the last quarter. Invesco Ltd. boosted its position in Grocery Outlet by 106.5% during the fourth quarter. Invesco Ltd. now owns 1,914,410 shares of the company’s stock worth $19,336,000 after purchasing an additional 987,367 shares in the last quarter. Finally, Goldman Sachs Group Inc. grew its holdings in Grocery Outlet by 43.2% in the fourth quarter. Goldman Sachs Group Inc. now owns 2,279,860 shares of the company’s stock valued at $23,027,000 after purchasing an additional 687,561 shares during the last quarter. 99.87% of the stock is owned by hedge funds and other institutional investors.

Analysts Set New Price Targets

GO has been the topic of several analyst reports. 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 $9.00 to $11.00 and gave the company an “equal weight” rating in a research report on Thursday. DA Davidson upped their price objective on shares of Grocery Outlet from $9.00 to $12.00 and gave the stock a “neutral” rating in a research report on Thursday. Deutsche Bank Aktiengesellschaft restated a “hold” rating and issued a $9.00 target price on shares of Grocery Outlet in a research note on Thursday. Finally, Telsey Advisory Group reiterated a “market perform” rating on shares of Grocery Outlet in a research note on Thursday. Twelve analysts have rated the stock with a Hold rating and two have issued a Sell rating to the stock. According to data from MarketBeat.com, the stock presently has an average rating of “Reduce” and an average target price of $10.59.

Trending Headlines about Grocery Outlet

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

• Positive Sentiment: Raised outlook: Grocery Outlet increased key fiscal 2026 targets, including projected net sales of approximately $4.70 billion to $4.72 billion, with the updated view reportedly above Wall Street expectations. Grocery Outlet beats Q2 estimates and raises FY26 outlook
• Positive Sentiment: Analyst targets increased: Morgan Stanley raised its price target from $7 to $11, while Wells Fargo lifted its target from $9 to $11. Both firms maintained an “equal weight” rating, indicating improved valuation support but limited expected upside from recent levels. Analyst price-target updates
• Positive Sentiment: Quarterly revenue increased 1.1% year over year to $1.19 billion, and net income rose to $5.6 million from $5.0 million in the prior-year quarter. The earnings beat and raised guidance are the primary catalysts behind the stock’s advance. Grocery Outlet second-quarter fiscal 2026 results
• Neutral Sentiment: Management ended the quarter with 547 stores across 16 states after opening 10 locations and closing 12. Recent insider activity has been weighted toward purchases, although institutional ownership changes were mixed.
• Negative Sentiment: Comparable-store sales declined 0.3%, and EPS fell from $0.23 a year ago to $0.20. Grocery Outlet also continues to report a negative net margin, so investors may focus on whether improving sales trends can translate into more durable profitability.

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.