Grocery Outlet_new store opening.jpg Grocery Outlet
Grocery Outlet opened seven new stores during Q2 and said it remains on track for 28 new locations in fiscal 2022.

Grocery Outlet sees more double-digit sales growth in Q2

Comparable-store results at value grocery chain jump more than 11%

Grocery Outlet Holding Corp. put the cycling of pandemic-related gains further behind it in the fiscal 2022 second quarter, notching another double-digit net sales gain.

The Emeryville, Calif.-based value grocer also saw improvement at the bottom line, with adjusted earnings per share (EPS) coming in above the high end of Wall Street’s consensus forecast.

For the second quarter ended July 2, net sales surged 15.7% to $897.7 million from $775.5 million a year earlier, when the top line dipped 3.5%, Grocery Outlet reported yesterday after the market close. Same-store sales grew 11.2%, compared with a 10% decrease in the 2021 quarter, and were up 17.9% on a three-year stack, stretching back to the pre-pandemic period.

Grocery Outlet’s Q2 results built on increases of 10.5% in net sales and 5.2% in comparable-store sales in the 2022 first quarter.

First-half 2022 net sales came in at $1.73 billion, up 13.2% from $1.53 billion in the 2021 half, when Grocery Outlet posted a 2.3% year-over-year decrease. Comparable-store sales for the 26-week period rose 8.2%, versus a 9.1% decline in the 2021 half, and were up 16.1% on a three-year stacked basis, the company said.

Grocery OutletGrocery Outlet-checkout lanes-shoppers.jpg

Grocery Outlet rebounded with 11.2% same-store sales growth in the 2022 second quarter following a 10% decrease in the prior-year period.

“We are extremely pleased with our second-quarter performance and the continued momentum in our business,” Grocery Outlet CEO Eric Lindberg said in a statement. “Our mission of ‘Touching Lives for the Better’ has always been firmly rooted in providing customers access to affordable quality food at unbeatable savings. As consumers are faced with record levels of inflation, our business is well-positioned to help them stretch their budgets. I would like to thank our talented independent operators and team members for their tireless commitment to that mission.”

At the bottom line in the 2022 second quarter, Grocery Outlet recorded net income of nearly $20.1 million, or 20 cents per diluted share, compared with $19.6 million, or 20 cents per diluted share, in the prior-year period. Adjusted net earnings were almost $28.9 million, or 29 cents per diluted share, versus $23.3 million, or 23 cents per diluted share, in the 2021 quarter, the company said.

Analysts, on average, had projected adjusted EPS of 24 cents, with estimates ranging from 22 cents to 26 cents, according to Refinitiv.

First-half net earnings came in at $31.7 million, or 32 cents per diluted share, compared with $38.5 million, or 39 cents per diluted share, a year ago. On an adjusted basis, net earnings for the 26 weeks climbed to $50.4 million, or 50 cents per diluted share, from $46.5 million, or 47 cents per diluted share, in the 2021 half.

“We delivered strong second-quarter results, exceeding both our top- and bottom-line expectations, which is a testament to our value-oriented model and our hard-working team,” Chief Financial Officer Charles Bracher stated.





Grocery Outlet raised its fiscal 2022 guidance, with adjusted diluted EPS now projected at 97 cents to $1.00, compared with 94 cents to 99 cents previously. Wall Street’s consensus forecast, before the analyst call, was for adjusted EPS of 97 cents, with a range of 95 cents to $1.01. The retailer also lifted its sales growth projections, to between $3.46 billion and $3.48 billion in net sales (from $3.39 billion to $3.42 billion) and to between 8% and 8.5% in comp-store sales (from 5.5% to 6.5%).

“Our increased full-year outlook reflects solid first-half performance, ongoing momentum in the current quarter, and continued reinvestments in our business in support of our long-term objectives,” Bracher commented.

During the second quarter, Grocery Outlet opened seven new stores, finishing the period with 425 stores in California, Washington, Oregon, Pennsylvania, Idaho, Nevada, New Jersey and Maryland. The chain expanded its footprint to eight states in June with the opening of a new store in Hagerstown, Md. Overall for fiscal 2022, the company expects to add 28 stores.

“Sales trends have maintained positive momentum so far into 3Q, which is encouraging,” Jefferies analyst Corey Tarlowe wrote in a research note early Wednesday. “We expect fundamental trends to remain strong in fiscal 2022 as consumers increasingly desire value, which is a key pillar for Grocery Outlet. Additionally, the company expects to return to 10% unit growth in 2023, reinforcing the long-term growth story,” he added.

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