Investor Dumps $10.9 Million in Grocery Outlet Stock as Shares Continue Multi-Year Downtrend

Core Insights - Stadium Capital Management has completely exited its position in Grocery Outlet Holding Corp, selling 877,860 shares valued at approximately $10.9 million, which previously represented 10% of the fund's assets under management (AUM) [1][2][3] Company Overview - Grocery Outlet Holding Corp operates a network of independently run discount grocery stores in the U.S., focusing on a flexible sourcing strategy to offer value-priced products [5] - The company reported a total revenue of $4.6 billion and a net income of -$4.4 million for the trailing twelve months (TTM) [4] - As of the latest market close, Grocery Outlet's shares were priced at $11.13, reflecting a 48% decline over the past year, significantly underperforming the S&P 500, which increased by 14% during the same period [3][4] Financial Performance - In the latest quarter, Grocery Outlet's net sales increased by 5.4% to $1.2 billion, but net income fell by over 50% to $11.6 million, with adjusted EBITDA decreasing to $66.7 million, or 5.7% of sales [6] - The company's market capitalization stands at $1.1 billion [4] Market Position and Strategy - The exit by Stadium Capital indicates a shift in investor confidence regarding Grocery Outlet's turnaround timeline, as the company is currently navigating a significant restructuring plan and facing challenges such as softer comparable-store sales and increased selling, general, and administrative (SG&A) expenses [6][7] - Management is implementing a refresh program aimed at revitalizing growth, with initial pilot results being promising, although broader execution carries risks amid ongoing cost pressures [8]