Grocery Outlet Reports 4.5% Sales Increase and Net Loss in Second Quarter of Fiscal 2025

Grocery Outlet Holding Corp. reported its financial results for the second quarter of fiscal 2025, revealing a net sales increase of 4.5% to $1.18 billion, compared to $1.13 billion in the same period last year. The company’s gross profit rose to $360.7 million, reflecting a 3.3% increase, although the gross margin slightly decreased to 30.6% from 30.9%. The operating income for the quarter was $12.8 million, which included $11.2 million in restructuring charges related to the company's ongoing restructuring plan. In contrast, the company reported a net income of $5.0 million, or $0.05 per diluted share, down from $14.0 million, or $0.14 per diluted share, in the prior year.

For the first half of fiscal 2025, Grocery Outlet experienced a net loss of $18.4 million, compared to a net income of $13.0 million in the same period last year. This decline was attributed to increased selling, general, and administrative expenses, which rose by 6.6% to $667.8 million, and significant restructuring charges totaling $45.0 million. The company’s adjusted net income for the second quarter decreased by 9.3% to $22.8 million, while adjusted EBITDA remained relatively stable at $67.7 million.

Operationally, Grocery Outlet opened 11 new stores during the second quarter, bringing the total to 552 stores across 16 states. The company reported a 1.1% increase in comparable store sales, driven by a 1.5% rise in transaction volume, although this was partially offset by a 0.4% decrease in average transaction size. The company’s restructuring plan, initiated in late fiscal 2024, aims to optimize store growth and reduce costs, including the termination of leases for 28 planned stores in less favorable locations.

The company’s cash position as of June 28, 2025, stood at $55.2 million, with $190.0 million in borrowings under its revolving credit facility. Grocery Outlet's total liabilities increased to $2.14 billion, up from $1.98 billion at the end of the previous fiscal year. The company is currently assessing the impact of recent macroeconomic conditions, including inflation and supply chain challenges, on its operations and financial performance.

Looking ahead, Grocery Outlet plans to continue its focus on strategic growth, including the opening of 33 to 35 new stores in fiscal 2025 and enhancing its private label product offerings. The company is also working to improve its internal controls following a material weakness identified in its financial reporting processes. Despite the challenges, Grocery Outlet remains committed to its long-term growth strategy and aims to enhance its market position in the competitive retail landscape.