Grocery Outlet stock: Q3 comps turn positive, outlook raised

Grocery Outlet Holding Corp. returned to positive comparable-store sales in the fiscal third quarter ended October 3, 2026. In its November 10 earnings release, the company said comparable-store sales increased 0.5% and transactions rose 2.4%, partly offset by a 1.9% decline in average transaction size.

Traffic returns to growth

Net sales rose 0.9% year over year to $1.18 billion, helped by new-store sales and the improvement in comparable sales. Net income increased to $13.3 million from $11.6 million, while diluted earnings rose to 13 cents from 12 cents.

Profitability remained mixed. Gross margin fell to 30.0% from 30.4% as promotions and transportation costs increased, while lower produce demand following a Cyclospora outbreak also pressured the quarter. Adjusted net income declined to $15.6 million from $20.7 million, and adjusted EBITDA fell to $59.4 million from $66.7 million.

Guidance shifts toward sales

Grocery Outlet raised its fiscal 2026 comparable-store sales outlook to growth of 0.2%-0.4%, from a previous range of flat to down 0.5%. The company maintained net sales guidance of $4.70 billion to $4.72 billion and its gross-margin range of 29.8%-30.0%.

At the same time, management lowered the upper end of adjusted EBITDA guidance to $229 million from $235 million and narrowed expected net new-store openings to 30-31. Adjusted earnings-per-share guidance moved to 52-55 cents from 51-55 cents.

Restructuring remains a major factor

For the first 39 weeks of fiscal 2026, net sales increased 1.8% to $3.54 billion, but the company recorded a $161.4 million net loss. The result included a $158.0 million non-cash goodwill impairment and $20.1 million in net restructuring charges. Grocery Outlet said its optimization plan, including store closures and related actions, is expected to be substantially completed by the fourth quarter of fiscal 2027.

How Grocery Outlet competes

Based in Emeryville, California, Grocery Outlet sells name-brand consumables and fresh products through primarily independently operated stores in a small-box, extreme-value format. Its opportunistic buying model is designed to offer changing assortments and discounted prices across 16 states. Coresight Research places Grocery Outlet alongside Aldi, Lidl, Kroger and Walmart in the competitive U.S. grocery landscape, with Grocery Outlet positioned as a specialized discount operator rather than a broad conventional supermarket chain.

U.S. retail shares remain sensitive to household spending, pricing pressure and margin trends across the S&P 500.

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