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Sep 26, 2020
Grocery Outlet Q3 2020 Earnings Report
Announced third quarter fiscal 2020 financial results, with net sales increasing by 17.1% and comparable store sales increasing by 9.1%.
Key Takeaways
Grocery Outlet reported a strong third quarter in fiscal year 2020, marked by a 17.1% increase in net sales, reaching $764.1 million, and a 9.1% increase in comparable store sales. The company's net income saw a substantial rise of 225.2% to $40.5 million. Grocery Outlet opened 10 new stores, bringing the total to 372 stores across six states.
Net sales increased by 17.1% to $764.1 million compared to the third quarter of fiscal 2019.
Comparable store sales increased by 9.1% compared to a 5.8% increase in the same period last year.
The company opened 10 new stores, ending the quarter with 372 stores in six states.
Net income increased 225.2% to $40.5 million, or $0.41 per diluted share.
Forward Guidance
Grocery Outlet anticipates positive mid-single-digit comparable store sales growth for the fourth quarter of fiscal 2020, driven by an increase in average basket size that is partially offset by declines in store traffic. The company expects to open 34 stores this year with no additional closures planned and a normalized tax rate of 28%.
Positive Outlook
- Comparable store sales growth for the fourth quarter is expected to be in the positive mid-single digits.
- Growth is driven by an increase in average basket size.
- The company expects to open 34 stores this year.
- No additional store closures are planned.
- The company continues to build its real estate pipeline to support 10% annual unit growth.
Challenges Ahead
- Store traffic is declining.
- Comparable store sales for the full fourth quarter expected to remain consistent at positive mid-single digits.
- Excluding the impact of discrete items, the Company anticipates a normalized tax rate of 28%.
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