Grocery Outlet Q2 adjusted EPS beats estimates
Overview
Grocery Outlet fiscal Q2 sales rose 4.5% but missed analyst expectations, per LSEG data
Adjusted EPS beat estimates at $0.23
Adjusted EBITDA exceeded expectations, reflecting effective cost management
Outlook
Company maintains fiscal 2025 net sales guidance at $4.7 bln to $4.8 bln
Company expects fiscal 2025 diluted adjusted EPS of $0.75 to $0.80
Grocery Outlet plans 33 to 35 new store openings in fiscal 2025
Company maintains fiscal 2025 adjusted EBITDA guidance at $260 mln to $270 mln
Result Drivers
NEW STORE OPENINGS - Sales growth driven by new store openings and a 1.1% increase in comparable store sales, aided by Easter holiday timing shift
PRICING STRATEGY - Gross margin declined due to pricing adjustments on staples to support value proposition, partially offset by improved inventory management
SG&A MANAGEMENT - SG&A expenses increased but declined as a percentage of sales due to reduced commission support and lower incentive compensation
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Sales | Miss | $1.18 bln | $1.20 bln (12 Analysts) |
Q2 Adjusted EPS | Beat | $0.23 | $0.17 (13 Analysts) |
Q2 EPS |
| $0.05 |
|
Q2 Adjusted Net Income | Beat | $22.80 mln | $18.20 mln (9 Analysts) |
Q2 Adjusted EBITDA | Beat | $67.70 mln | $64.40 mln (11 Analysts) |
Q2 Gross Margin |
| 30.6% |
|
Q2 Gross Profit |
| $360.69 mln |
|
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 9 "hold" and 2 "sell" or "strong sell"
The average consensus recommendation for the food retail & distribution peer group is "buy."
Wall Street's median 12-month price target for Grocery Outlet Holding Corp is $16.50, about 18.7% above its August 4 closing price of $13.42
The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 22 three months ago
Press Release: ID:nGNX7Tmv5t
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