Grocery Outlet pins profit, sales bump on ‘treasure-hunt’ feel
Grocery Outlet Holding Corp. stock gained more than 10% late Tuesday after the company’s first quarterly results after its June initial public offering blew past Wall Street expectations and the off-price grocer also predicted a rosier 2019.
Grocery Outlet GO, +0.16% said it lost $10.6 million, or 15 cents a share, in the second quarter, versus earnings of $7.3 million, or 11 cents a share, in the second quarter of fiscal 2018.
Adjusted for one-time items, the company said it earned $14.5 million, or 20 cents a share, compared with $12.9 million, or 19 cents a share, a year ago. Sales rose by 12% to $645.3 million from $575.1 million in the second quarter of fiscal 2018.
Analysts polled by FactSet had expected adjusted earnings of 13 cents a share on sales of $627 million.
Comparable-store sales rose by 6%, and the company pinned its success to its “unique business model that provides customers unbeatable value in a fun, treasure-hunt experience.”
Grocery Outlet priced its mid-June initial public offering at $22 a share, and the stock opened 41% above that price. The stock ended Tuesday at $37.60, up 71%.
The company said it expects sales between $2.50 billion and $2.53 billion in the full-year 2019, and adjusted EPS for the year between 68 cents and 71 cents. The analysts surveyed by FactSet expect adjusted EPS of 59 cents a share on sales of $2.51 billion for the year.
Wall Street has called Grocery Outlet’s closeout model “distinctive,” although some were concerned that finding enough of the right merchandise at the right price would be critical to the company’s success.
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