Overview

* Grocery Outlet ( GO ) fiscal Q2 sales rose 4.5% but missed analyst expectations, per LSEG data

* Adjusted EPS beat estimates at $0.23

* Adjusted EBITDA exceeded expectations, reflecting effective cost management

Outlook

* Company maintains fiscal 2025 net sales guidance at $4.7 bln to $4.8 bln

* Company expects fiscal 2025 diluted adjusted EPS of $0.75 to $0.80

* Grocery Outlet ( GO ) plans 33 to 35 new store openings in fiscal 2025

* Company maintains fiscal 2025 adjusted EBITDA guidance at $260 mln to $270 mln

Result Drivers

* NEW STORE OPENINGS - Sales growth driven by new store openings and a 1.1% increase in comparable store sales, aided by Easter holiday timing shift

* PRICING STRATEGY - Gross margin declined due to pricing adjustments on staples to support value proposition, partially offset by improved inventory management

* SG&A MANAGEMENT - SG&A expenses increased but declined as a percentage of sales due to reduced commission support and lower incentive compensation

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Sales Miss $1.18 $1.20

bln bln (12

Analysts

)

Q2 Beat $0.23 $0.17

Adjusted (13

EPS Analysts

)

Q2 EPS $0.05

Q2 Beat $22.80 $18.20

Adjusted mln mln (9

Net Analysts

Income )

Q2 Beat $67.70 $64.40

Adjusted mln mln (11

EBITDA Analysts

)

Q2 Gross 30.6%

Margin

Q2 Gross $360.69

Profit mln

Analyst Coverage

* The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 9 "hold" and 2 "sell" or "strong sell"

* The average consensus recommendation for the food retail & distribution peer group is "buy."

* Wall Street's median 12-month price target for Grocery Outlet Holding Corp ( GO ) is $16.50, about 18.7% above its August 4 closing price of $13.42

* The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 22 three months ago

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)