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• Net Sales: $1.13 billion, up 8.5% year-over-year.

• Comparable Store Sales: Increased by 30 basis points.

• Gross Margin: 30.4%, an increase of 110 basis points.

• Adjusted EBITDA: $51.9 million, up 31.7% from last year.

• Adjusted Net Income: $13 million or $0.13 per diluted adjusted share.

• Net Loss: $23.3 million or negative $0.24 per diluted share.

• New Stores: 11 new stores opened, 1 store closed; total 543 stores.

• Operating Cash Flow: $58.9 million, compared to $7.8 million last year.

• Capital Expenditures: $65.3 million in the first quarter.

• Total Debt: $458.9 million at the end of the first quarter.

• Guidance for Comp Store Sales Growth: Updated to 1% to 2% for the full year.

• Second Quarter Expectations: Comparable store sales growth of approximately 1%, gross margin between 30% and 30.5%, adjusted EBITDA between $62 million to $65 million, and diluted EPS of $0.16 to $0.18 per share.

• Warning! GuruFocus has detected 4 Warning Sign with GO.

Release Date: May 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Grocery Outlet Holding Corp (NASDAQ:GO) reported an 8.5% increase in net sales to $1.13 billion, driven by new store openings and a 30 basis point increase in comparable store sales.

• The company exceeded its gross margin outlook, achieving a 110 basis point increase to 30.4%, primarily due to improved inventory management and reduced shrinkage.

• Grocery Outlet Holding Corp (NASDAQ:GO) opened 10 net new stores in the first quarter, positioning the company to meet its annual target of 33 to 35 new stores.

• The company successfully rolled out the initial phase of its real-time ordering guide, improving inventory visibility and execution, with plans for full rollout by the end of the second quarter.

• Adjusted EBITDA increased by 31.7% to $51.9 million, and adjusted EPS exceeded the top of the outlook range, reflecting strong financial performance.

Negative Points

• Despite the positive sales growth, Grocery Outlet Holding Corp (NASDAQ:GO) experienced a decrease in average transaction size by 2%, impacting overall comparable store sales.

• The company reported a net loss of $23.3 million for the quarter, compared to a net loss of $1 million in the same period last year.

• Grocery Outlet Holding Corp (NASDAQ:GO) adjusted its comp store sales outlook for the year, citing pressure on the basket size and broader macroeconomic uncertainties.

• The company incurred $33.9 million in restructuring charges, including lease termination costs and impairment of long-lived assets.

• April sales were softer than expected, with uncertainty in consumer behavior and macroeconomic conditions affecting performance.