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

Core Insights - Grocery Outlet Holding Corp. reported financial results for the third quarter of fiscal 2025, showing a net sales increase of 5.4% year-over-year to $1.17 billion, driven by new store sales and a 1.2% rise in comparable store sales [6][10] - The company launched a store refresh program, which is expected to enhance same-store sales growth in 2026 despite not meeting expectations in the third quarter [5][6] - Adjusted net income decreased by 25.7% to $20.7 million, with diluted adjusted earnings per share at $0.21 compared to $0.28 in the previous year [9][39] Financial Summary for Third Quarter Fiscal 2025 - Net sales reached $1.17 billion, a 5.4% increase from the previous year, with comparable store sales up by 1.2% [6][10] - Gross margin was 30.4%, down from 31.1% year-over-year, while SG&A expenses rose by 8.7% to $331.0 million [6][8] - Operating income was $22.8 million, including $1.3 million in restructuring charges, and net income was $11.6 million, or $0.12 per diluted share, compared to $24.2 million, or $0.24 per diluted share last year [9][31] Financial Summary for 39 Weeks Ended September 27, 2025 - Net sales increased by 6.1% to $3.47 billion, with comparable store sales rising by 0.9% [10][11] - Gross profit was $1.06 billion, maintaining a gross margin of 30.5% [11] - The company reported a net loss of $6.8 million, or $(0.07) per diluted share, compared to net income of $37.2 million, or $0.37 per diluted share last year [13][39] Restructuring Plan - The company initiated a restructuring plan aimed at improving long-term profitability and cash flow, which included terminating leases for 28 unopened stores and reducing headcount [15][17] - Total costs incurred under the restructuring plan amounted to $62 million as of September 27, 2025 [15][17] Cash Flow & Capital Spending - Net cash provided by operating activities in the third quarter was $17.3 million, down from $23.0 million in the prior year [16] - Capital expenditures for the third quarter were $44.4 million, a decrease of $4.7 million compared to the same period last year [16] Outlook - The company revised its guidance for fiscal 2025, expecting net sales between $4.70 billion and $4.72 billion, with a comparable store sales increase projected at 0.6% to 0.9% [18] - Adjusted EBITDA guidance was updated to $258 million to $262 million, with diluted adjusted earnings per share expected to be between $0.78 and $0.80 [18]