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Grocery Outlet Holding
(NASDAQ:GO)
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Rating:49Neutral
Price Target:
$10.00
▲(31.93% Upside)
Action:Reiterated
Date:06/04/26
The score is held down primarily by weak financial performance: significant recent losses, pressured operating profitability, and elevated leverage despite stable gross margin and positive operating cash flow. Technicals show some near-term stabilization above key shorter moving averages, but the stock remains below its 200-day average. Valuation is constrained by a negative P/E tied to losses. Earnings call commentary was mixed—operational green shoots and reiterated guidance, but continued comp and margin pressure plus material GAAP charges.
Positive Factors
Opportunistic sourcing and mix gains
Grocery Outlet’s ability to source branded closeouts and surplus (opportunistic mix +200bps) is a durable competitive advantage. It supports respectable gross margins at discount prices, provides sourcing flexibility in volatile supply environments, and can sustainably lift margins as the mix scales.
Negative Factors
Elevated leverage and constrained balance sheet
Debt materially above equity and ~1.8x net leverage limit strategic flexibility and increase interest exposure. In a retail recovery that may take quarters, high leverage reduces ability to invest opportunistically or absorb further margin shocks and raises refinancing risk if cash flow weakens.
Read all positive and negative factors
Positive Factors
Negative Factors
Opportunistic sourcing and mix gains
Grocery Outlet’s ability to source branded closeouts and surplus (opportunistic mix +200bps) is a durable competitive advantage. It supports respectable gross margins at discount prices, provides sourcing flexibility in volatile supply environments, and can sustainably lift margins as the mix scales.
Read all positive factors
Grocery Outlet Holding Key Performance Indicators (KPIs)
Any
Comparable Store Sales Growth
Measures year‑over‑year sales at stores open long enough to be comparable, isolating organic demand from new-store openings. Rising comps signal stronger customer traffic or larger baskets; falling comps point to weakening demand, competitive pressure, or inventory issues—important for gauging whether Grocery Outlet’s value proposition is gaining or losing traction.
Measures year‑over‑year sales at stores open long enough to be comparable, isolating organic demand from new-store openings. Rising comps signal stronger customer traffic or larger baskets; falling comps point to weakening demand, competitive pressure, or inventory issues—important for gauging whether Grocery Outlet’s value proposition is gaining or losing traction.
Data provided by:
The Fly
The FlyGrocery Outlet Holding (GO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.03B
Dividend YieldN/A
Average Volume (3M)3.49M
Price to Earnings (P/E)―
Beta (1Y)0.86
Revenue Growth6.04%
EPS Growth-2370.84%
CountryUS
Employees1,692
SectorConsumer Defensive
Sector Strength42
IndustryGrocery Stores
Share Statistics
EPS (TTM)-3.89
Shares Outstanding98,922,670
10 Day Avg. Volume3,078,170
30 Day Avg. Volume3,488,258
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)1.01
Price to Sales (P/S)0.21
P/FCF Ratio41.87
Enterprise Value/Market Cap2.65
Enterprise Value/Revenue0.58
Enterprise Value/Gross Profit1.91
Enterprise Value/Ebitda-11.30
Forecast
1Y Price Target
$9.00Price Target Upside18.73% Upside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)0.51
Revenue Forecast (FY)$4.66B
Grocery Outlet Holding Business Overview & Revenue Model
Company Description
Grocery Outlet Holding Corp. oversees a network of individually managed retail locations throughout the United States. These stores offer an extensive selection of products, encompassing fresh produce, dairy and deli items, floral arrangements, an...
How the Company Makes Money
Grocery Outlet primarily makes money by selling grocery and household products through its retail network and capturing gross profit on the spread between its acquisition costs and retail selling prices. A core driver of its model is opportunistic...
Grocery Outlet Holding Earnings Call Summary
Earnings Call Date:May 13, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Neutral
The call conveyed a mix of early operational improvements and material near-term headwinds. Positive indicators included improving traffic (up ~2% Q1 and 2%–5% in March), a ~200 basis point increase in opportunistic mix, adjusted EBITDA and adjusted EPS that met or beat guidance, progress on store refreshes and completed store closures that should improve fleet quality and deliver an expected ~$12 million adjusted EBITDA run-rate benefit. Counterbalancing these positives were meaningful GAAP losses driven by a $158 million goodwill impairment and $18.2 million restructuring charges, a decline in comparable store sales (-1%) and units per transaction (-3.1%), gross margin pressure (29.6%, down ~80 bps YoY) including inventory liquidations, and a drop in adjusted EBITDA margin from 4.6% to 3.7%. Management reiterated full-year guidance and expects margin improvement in the back half as opportunistic mix ramps and promotional spend declines. Overall, the results and commentary represent a transitional quarter with encouraging operational signs but significant near-term financial noise.Positive Updates
Revenue Growth in Q1
Net sales of $1.17 billion in Q1, up 3.6% year-over-year, driven by recent store openings and early traction from strategic initiatives.
Negative Updates
Large GAAP Net Loss Driven by Goodwill Impairment
Reported GAAP net loss of $180.3 million (loss of $1.83 per diluted share) in Q1, driven primarily by a noncash $158 million goodwill impairment and $18.2 million of restructuring charges; compares with a net loss of $23.3 million ($0.24 per share) in prior year quarter.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Growth in Q1
Net sales of $1.17 billion in Q1, up 3.6% year-over-year, driven by recent store openings and early traction from strategic initiatives.
Read all positive updates
Company Guidance
Management reiterated full‑year guidance and gave Q2 targets of comparable store sales down 1.5% to 2.0% (including a ~50 bps Easter headwind), gross margin of 29.8%–30.0%, adjusted EBITDA of $55–58 million and diluted EPS of $0.11–0.13; they noted ~$1.5 million of additional inventory liquidations expected in Q2. For the year they expect to invest roughly $20 million in promotional support to bridge opportunistic product supply, to spend about $170 million in CapEx, to complete ~100 store refreshes by year‑end (58 done to date) and to have finished 36 store closures that are expected to yield ~ $12 million of annualized adjusted EBITDA benefit from the restructuring. Balance sheet and liquidity cited included $59 million cash, ~$489.3 million total debt, ~$175 million revolver capacity and net leverage of ~1.8x adjusted EBITDA, and management said promotional spend should taper in Q3 and end in Q4 with gross margins improving in the back half of the year.Grocery Outlet Holding Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
45
Neutral
Cash Flow
50
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.73B | 4.69B | 4.37B | 3.97B | 3.58B | 3.08B |
| Gross Profit | 1.42B | 1.42B | 1.32B | 1.24B | 1.09B | 948.79M |
| EBITDA | -240.76M | -85.34M | 192.35M | 214.97M | 173.09M | 165.44M |
| Net Income | -381.92M | -224.91M | 39.47M | 79.44M | 65.05M | 62.31M |
Balance Sheet | ||||||
| Total Assets | 2.96B | 3.09B | 3.17B | 2.97B | 2.77B | 2.67B |
| Cash, Cash Equivalents and Short-Term Investments | 59.00M | 69.60M | 62.83M | 114.99M | 102.73M | 140.09M |
| Total Debt | 1.84B | 1.81B | 1.66B | 1.39B | 1.41B | 1.46B |
| Total Liabilities | 2.15B | 2.11B | 1.98B | 1.75B | 1.66B | 1.66B |
| Stockholders Equity | 807.10M | 983.66M | 1.20B | 1.22B | 1.11B | 1.01B |
Cash Flow | ||||||
| Free Cash Flow | -3.20M | 23.80M | -74.65M | 111.46M | 55.03M | 42.20M |
| Operating Cash Flow | 247.48M | 222.13M | 111.96M | 303.45M | 185.51M | 165.59M |
| Investing Cash Flow | -266.47M | -229.68M | -274.03M | -194.16M | -149.93M | -136.71M |
| Financing Cash Flow | 24.02M | 14.32M | 109.91M | -97.02M | -72.94M | 5.88M |
Grocery Outlet Holding Technical Analysis
Positive
7.58
Price Trends
8.59
Positive
8.20
Positive
10.21
Positive
Market Momentum
0.45
Negative
69.42
Neutral
91.90
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GO, the sentiment is Positive. The current price of 7.58 is below the 20-day moving average (MA) of 9.47, below the 50-day MA of 8.59, and below the 200-day MA of 10.21, indicating a bullish trend. The MACD of 0.45 indicates Negative momentum. The RSI at 69.42 is Neutral, neither overbought nor oversold. The STOCH value of 91.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GO.
Grocery Outlet Holding Risk Analysis
Grocery Outlet Holding disclosed 47 risk factors in its most recent earnings report. Grocery Outlet Holding reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Grocery Outlet Holding Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $565.79M | 11.29 | 10.74% | 2.63% | 4.20% | -3.38% | |
67 Neutral | $1.98B | 20.08 | 7.49% | 2.06% | 4.14% | -0.27% | |
66 Neutral | $751.13M | 15.60 | 22.26% | 1.99% | 3.09% | 16.13% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
56 Neutral | $1.68B | 16.07 | 6.41% | 0.93% | -0.28% | 68.37% | |
51 Neutral | $6.92B | 44.16 | 8.17% | 3.49% | 3.46% | -80.55% | |
49 Neutral | $1.03B | -2.67 | -36.58% | ― | 6.04% | -2370.84% |
* Consumer Defensive Sector Average
GO
Grocery Outlet Holding
10.39
-2.86
-21.58%
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NGVC
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Grocery Outlet Holding Corporate Events
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Grocery Outlet Announces Major Leadership and CFO Changes
Neutral
Jun 9, 2026
On June 9, 2026, Grocery Outlet Holding Corp. announced a series of leadership changes as part of its efforts to restore long-term profitable growth and reinforce its opportunistic buying model. Executive Vice President and Chief Financial Officer...
Executive/Board ChangesShareholder Meetings
Grocery Outlet Shareholders Reelect Board, Ratify Auditor
Positive
Jun 3, 2026
Grocery Outlet Holding held its 2026 annual meeting of stockholders on June 1, 2026, where shareholders re-elected ten directors to the board to serve until the 2027 annual meeting, underscoring continuity in the company’s leadership and gov...
Business Operations and StrategyExecutive/Board Changes
Grocery Outlet Holding Expands Board With New Independent Directors
Positive
Apr 2, 2026
On April 1, 2026, Grocery Outlet Holding Corp. expanded its Board of Directors from ten to twelve members and appointed Frances L. Allen and Felicia D. Thornton as independent directors, with their terms effectively running until the company’...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.