Grocery Outlet Holding Corp. Announces First Quarter Fiscal 2025 Financial Results

Financial Performance - Net sales increased by 8.5% to $1.13 billion in Q1 fiscal 2025, driven by new store sales and a 0.3% increase in comparable store sales [4][7] - Gross profit rose by 12.7% to $342.4 million, with gross margin improving by 110 basis points to 30.4% year-over-year [5][7] - Adjusted net income increased by 47.7% to $13.0 million, or $0.13 diluted adjusted earnings per share, compared to $8.8 million, or $0.09 diluted adjusted earnings per share in the prior year [9][32] Operational Highlights - The company opened 11 new stores and closed 1, ending the quarter with 543 stores across 16 states [4][7] - Transactions increased by 2.3%, while average transaction size decreased by 2.0% [4] - Selling, general and administrative expenses rose by 9.1% to $331.1 million, representing 29.4% of net sales [6][7] Restructuring Plan - The company initiated a restructuring plan aimed at improving long-term profitability and cash flow, which includes terminating leases for 28 unopened stores and reducing headcount [11] - Total costs under the restructuring plan are estimated to be between $59 million and $61 million, with $40 million to $42 million expected as cash expenditures [11] Cash Flow and Capital Expenditures - Net cash provided by operating activities was $58.9 million, a significant increase from $7.8 million in the same period last year, primarily due to improvements in working capital [14] - Capital expenditures for Q1 fiscal 2025 were $65.3 million, an increase of $16.0 million compared to the prior year, driven by supply chain investments and new store openings [14] Executive Changes - The company announced the retirement of Ramesh Chikkala, EVP and COO, and Pamela Burke, EVP and Chief Stores Officer, with searches for new leadership commencing [12]