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Grocery Outlet Holding
(NASDAQ:GO)
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Rating:49Neutral
Price Target:
$10.00
▲(10.99% 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 & stable gross margin
Grocery Outlet’s opportunistic buying model—sourcing closeouts, overruns and surplus branded goods—supports a durable ~30% gross margin. A rising opportunistic mix increases purchase cost advantages and product variety, underpinning long-term margin resilience and value positioning.
Negative Factors
Elevated leverage and weakened equity
Leverage materially exceeds peers, with debt higher than equity and ~1.8x net leverage. This constrains financial flexibility, raises interest and refinancing risk, and limits the company’s ability to invest in growth or absorb ongoing margin pressure without deleveraging or raising capital.
Read all positive and negative factors
Positive Factors
Negative Factors
Opportunistic sourcing & stable gross margin
Grocery Outlet’s opportunistic buying model—sourcing closeouts, overruns and surplus branded goods—supports a durable ~30% gross margin. A rising opportunistic mix increases purchase cost advantages and product variety, underpinning long-term margin resilience and value positioning.
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.
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The Fly
The FlyGrocery Outlet Holding (GO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.01B
Dividend YieldN/A
Average Volume (3M)2.35M
Price to Earnings (P/E)―
Beta (1Y)0.91
Revenue Growth5.12%
EPS Growth-4889.01%
CountryUS
Employees1,925
SectorConsumer Defensive
Sector Strength42
IndustryGrocery Stores
Share Statistics
EPS (TTM)-3.88
Shares Outstanding98,922,670
10 Day Avg. Volume2,075,513
30 Day Avg. Volume2,354,344
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price Target
$11.30Price Target Upside25.42% Upside
Rating ConsensusHold
Number of Analyst Covering6
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:Aug 12, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call conveyed measurable operational progress and financial beats versus outlook: revenue growth (+1%), traffic gains (+1.8%), gross margin above outlook (30.2%), improved opportunistic assortment (op mix +300+ bps; op comps +500 bps vs start of Q1), and improved NPS and IO engagement. At the same time, comparable-store sales remain slightly negative (‑0.3%), basket is down (‑2.1% YoY), adjusted EBITDA and adjusted EPS were modestly below last year, operating cash flow declined, and the company faces a temporary Cyclospora-driven produce headwind (~100 bps to Q3 comps) plus restructuring and promotional investments. Overall, the positives — execution progress, margin/outlook beats, stronger opportunistic flow and improving customer/operator metrics — outweigh the near-term challenges, but the business remains early in its turnaround and guidance is prudently cautious.Positive Updates
Revenue and Traffic Growth
Net sales increased 1% year-over-year to $1.19 billion in Q2 FY2026; customer traffic grew 1.8% (vs 1.5% prior year), indicating improving store visitation.
Negative Updates
Comparable Store Sales and Basket Weakness
Comparable store sales declined 30 basis points (‑0.3%) in Q2; basket declined 2.1% year-over-year despite a sequential improvement of ~100 basis points from Q1, leaving comps still fragile.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Traffic Growth
Net sales increased 1% year-over-year to $1.19 billion in Q2 FY2026; customer traffic grew 1.8% (vs 1.5% prior year), indicating improving store visitation.
Read all positive updates
Company Guidance
Management raised the low end of its full‑year outlook and gave the following guidance: net new store openings of 30–33; net sales of $4.70–4.72 billion; comparable store sales of -0.5% to 0.0%; gross margin 29.8%–30.0%; approximately $20 million of incremental promotional investment for the year (tapering in H2); adjusted EBITDA $225–235 million; diluted adjusted EPS $0.51–0.55; and capital expenditures net of tenant improvement allowances of $170 million. For Q3 the company forecasts comps of -1.0% to 0.0%, gross margin 29.8%–30.0%, adjusted EBITDA $58–61 million and diluted adjusted EPS $0.14–0.16, while noting an expected ~100 basis‑point Q3 comp headwind from the Cyclospora produce impact and a plan to complete roughly 100 store refreshes by year‑end.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 | 4.74B | 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 | -238.22M | -85.34M | 192.35M | 214.97M | 173.09M | 165.44M |
| Net Income | -381.25M | -224.91M | 39.47M | 79.44M | 65.05M | 62.31M |
Balance Sheet | ||||||
| Total Assets | 2.99B | 3.09B | 3.17B | 2.97B | 2.77B | 2.67B |
| Cash, Cash Equivalents and Short-Term Investments | 74.20M | 69.60M | 62.83M | 114.99M | 102.73M | 140.09M |
| Total Debt | 1.85B | 1.81B | 1.66B | 1.39B | 1.41B | 1.46B |
| Total Liabilities | 2.18B | 2.11B | 1.98B | 1.75B | 1.66B | 1.66B |
| Stockholders Equity | 816.59M | 983.66M | 1.20B | 1.22B | 1.11B | 1.01B |
Cash Flow | ||||||
| Free Cash Flow | -16.21M | 23.80M | -74.65M | 111.46M | 55.03M | 42.20M |
| Operating Cash Flow | 217.00M | 222.13M | 111.96M | 303.45M | 185.51M | 165.59M |
| Investing Cash Flow | -243.01M | -229.68M | -274.03M | -194.16M | -149.93M | -136.71M |
| Financing Cash Flow | 41.95M | 14.32M | 109.91M | -97.02M | -72.94M | 5.88M |
Grocery Outlet Holding Technical Analysis
Positive
9.01
Price Trends
9.58
Positive
8.59
Positive
9.33
Positive
Market Momentum
0.20
Negative
70.37
Negative
83.28
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 9.01 is below the 20-day moving average (MA) of 9.56, below the 50-day MA of 9.58, and below the 200-day MA of 9.33, indicating a bullish trend. The MACD of 0.20 indicates Negative momentum. The RSI at 70.37 is Negative, neither overbought nor oversold. The STOCH value of 83.28 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 | $565.52M | 11.48 | 10.74% | 2.35% | 4.20% | -3.38% | |
65 Neutral | $1.78B | 18.34 | 7.49% | 1.85% | 4.50% | -3.08% | |
64 Neutral | $632.15M | 13.60 | 21.11% | 1.90% | 2.01% | 8.63% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
53 Neutral | $1.63B | 15.92 | 6.30% | 0.77% | 1.02% | 84.32% | |
49 Neutral | $1.01B | -2.78 | -40.07% | ― | 5.12% | -4889.01% | |
49 Neutral | $5.83B | 155.00 | 2.91% | 5.80% | 2.75% | -95.14% |
* Consumer Defensive Sector Average
GO
Grocery Outlet Holding
10.80
-7.53
-41.08%
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VLGEA
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71.54
2.71
3.94%
NGVC
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28.02
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ACI
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12.40
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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...
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.