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EMERYVILLE, Calif. - Grocery Outlet Holding Corp. (NASDAQ:GO) shares plunged 12% in after-hours trading on Tuesday after the discount grocery retailer reported fourth-quarter earnings that missed expectations and provided weaker-than-expected guidance for fiscal 2025.
The company reported Q4 adjusted earnings per share of $0.15, falling short of the $0.17 analyst consensus. Revenue came in at $1.10 billion, slightly above estimates of $1.09 billion and up 10.9% YoY.
Comparable store sales increased 2.9% in Q4, driven by a 3% rise in transactions while average transaction size was flat.
For fiscal 2025, Grocery Outlet forecast adjusted EPS of $0.70-$0.75, well below the $0.94 consensus. The company expects revenue of $4.7-$4.8 billion, compared to analyst estimates of $4.73 billion.
"We delivered solid fourth quarter results, generating comps above expectations as customers responded to our improved value assortments," said Eric Lindberg, Chairman of the Board of Directors.
However, gross margin declined 70 basis points YoY to 29.5% in Q4, which the company attributed to higher inventory shrinkage related primarily to issues with its systems conversion.
Grocery Outlet also announced a restructuring plan aimed at improving long-term profitability, which includes terminating leases for unopened stores in suboptimal locations and implementing a workforce reduction.
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