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Mar 28, 2020
Grocery Outlet Q1 2020 Earnings Report
Grocery Outlet's financial performance for Q1 2020 was announced, demonstrating substantial growth in net sales, comparable store sales, and net income.
Key Takeaways
Grocery Outlet reported a strong first quarter in fiscal year 2020, marked by a 25.4% increase in net sales, a 17.4% rise in comparable store sales, and a 235.0% surge in net income. The company opened eight net new stores, bringing the total to 355 stores across six states. While not providing formal 2020 earnings guidance due to COVID-19 uncertainties, Grocery Outlet remains confident in its ability to execute its long-term growth strategies.
Net sales increased by 25.4% to $760.3 million compared to $606.3 million in the first quarter of fiscal 2019.
Comparable store sales increased by 17.4% compared to a 4.2% increase in the same period last year.
Net income increased by 235.0% to $12.6 million, or $0.13 per diluted share, compared to $3.8 million, or $0.06 per diluted share, in the first quarter of fiscal 2019.
The Company opened eight net new stores ending the quarter with 355 stores in six states.
Forward Guidance
Due to the uncertainty related to COVID-19, Grocery Outlet is not providing formal 2020 earnings guidance at this time but expects to open between 28 and 30 stores this year with no additional closures planned. Quarter-to-date comparable store sales growth is tracking in the mid-teens driven by an increase in average basket size partially offset by declines in store traffic due to shelter-in-place restrictions. The impact of the COVID-19 situation remains fluid and therefore it is difficult to predict the impact of potential changes to shelter-in-place restrictions.
Positive Outlook
- Company expects to open between 28 and 30 stores this year with no additional closures planned.
- Company continues to build its real estate pipeline to support 10% annual unit growth in the future.
- Quarter-to-date comparable store sales growth is tracking in the mid-teens.
- Increase in average basket size
- Performance and liquidity position remain strong, allowing us to continue investing in pursuit of our long term growth strategies.
Challenges Ahead
- Not providing formal 2020 earnings guidance at this time due to the uncertainty related to COVID-19
Historical Earnings Impact
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