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Grocery Outlet Holding Corp. Announces Second Quarter Fiscal 2026 Financial Results

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  • Grocery Outlet Holding Corp. reported Q2 fiscal 2026 net sales of $1.19 billion, a 1.1% increase year-over-year.
  • Comparable store sales declined 0.3% in Q2, driven by a 2.1% drop in average transaction size partially offset by a 1.8% rise in transaction volume.
  • Q2 gross margin decreased to 30.2% from 30.6% in the prior year due to product promotions, inventory markdowns, and write-offs associated with store closures.
  • Q2 operating income was $15.8 million, which included $5.4 million in net restructuring charges related to the Optimization Plan.
  • Q2 net income rose to $5.6 million ($0.06 per diluted share) compared to $5.0 million ($0.05 per diluted share) last year.
  • Adjusted net income for Q2 was $20.3 million ($0.20 per diluted adjusted share), down from $22.8 million ($0.23 per diluted adjusted share) in the prior year.
  • For the 26 weeks ended July 4, 2026, net sales increased 2.3% to $2.36 billion while comparable store sales declined 0.6%.
  • The 26-week period included a $158.0 million non-cash goodwill impairment charge, resulting in a GAAP net loss of $174.7 million.
  • Adjusted net income for the 26-week period was $24.9 million ($0.25 per diluted adjusted share), down from $35.8 million ($0.36 per diluted adjusted share) in the prior year.
  • The company opened 10 new stores and closed 12 stores in Q2, including 9 closures under the Optimization Plan, ending the quarter with 547 stores.
  • During the first half of fiscal 2026, the company closed all 36 designated Closure Stores as part of its Optimization Plan.
  • Net cash provided by operating activities for Q2 was $43.2 million, down from $73.6 million in the prior year.
  • Capital expenditures for Q2 were $43.7 million before tenant improvement allowances, a decrease from the prior year due to fewer new store openings.
  • Grocery Outlet revised its full-year fiscal 2026 net sales guidance to $4.70–$4.72 billion, up from the previous $4.60–$4.72 billion range.
  • Revised fiscal 2026 comparable store sales guidance is now a decrease of 0.5% to 0.0%, improved from the prior forecast of -2.0% to 0.0%.
  • Revised fiscal 2026 adjusted EBITDA guidance is $225 million to $235 million, up from the previous $220 million to $235 million range.
  • Revised fiscal 2026 diluted adjusted earnings per share guidance is $0.51 to $0.55, up from the previous $0.45 to $0.55 range.
  • The company expects to incur between $15 million and $24 million in total net restructuring charges related to the Optimization Plan across fiscal 2026 and 2027.