Grocery Outlet(US:GO) Businesswire·2026-03-17 01:02Core Viewpoint - Glancy Prongay Wolke & Rotter LLP has filed a class action lawsuit against Grocery Outlet Holding Corp. for securities fraud, alleging that the company made misleading statements and failed to disclose adverse facts about its business and financial performance during the class period from August 5, 2025, to March 4, 2026 [1][4]. Financial Performance - On March 4, 2026, Grocery Outlet reported its fourth quarter and full fiscal year 2025 results, which missed guidance on several key financial metrics: - Adjusted EBITDA of $254.3 million, below the low end of prior guidance of $258 million - Net sales of $4.69 billion, missing the low end of guidance of $4.70 billion - Comparable store sales increased by 0.5%, below the guidance range of 0.6% to 0.9% - Diluted adjusted earnings per share of $0.76, missing the low end of guidance of $0.78 [2][4]. Operational Changes - The company announced an additional "optimization plan" alongside its existing "restructuring plan," which includes the closure of 36 underperforming stores. This decision was attributed to the rapid expansion of the company, which was deemed unsustainable [2][4]. - Grocery Outlet recognized $110 million in non-cash impairment charges related to the long-lived assets of the closed stores and estimated restructuring charges between $14 million and $25 million for fiscal 2026, including cash expenditures primarily for lease termination fees [2][4]. Stock Market Reaction - Following the announcement of the financial results and operational changes, Grocery Outlet's stock price fell by $2.45, or 27.9%, closing at $6.34 per share on March 5, 2026, with unusually high trading volume [4]. Allegations in the Lawsuit - The lawsuit claims that during the class period, the defendants made materially false and misleading statements and failed to disclose critical information, including: - The company had expanded too quickly into new stores - Financial growth was artificially supported by rapid store expansion - The inability to achieve sustainable growth to meet prior guidance - The need for further optimization of the restructuring plan, including significant store closures and asset write-downs [4][5].