Grocery Outlet Price Target Raised to $9 After Q1 Sales of $1.17B
D.A. Davidson raised Grocery Outlet’s price target to $9.00 from $7.00 after first-quarter net sales of $1.17 billion, up 3.6%, and adjusted EPS of $0.05 versus a $0.02 estimate. On a GAAP basis, the company posted a $180.3 million net loss mainly due to a $158 million goodwill impairment.
1. Price Target Raised on Early Turnaround Signs
D.A. Davidson increased its price target for Grocery Outlet to $9.00 from $7.00, reflecting belief that first-quarter trends have bottomed despite the need for more confirmation of a full turnaround.
2. Q1 Financial Performance: Sales, Earnings and Impairment
Grocery Outlet posted Q1 net sales of $1.17 billion, up 3.6%, with comparable-store sales down 1.0%. Adjusted EPS came in at $0.05 versus a consensus $0.02, while GAAP results showed a $180.3 million net loss due to a $158 million goodwill impairment and $18.2 million in restructuring charges.
3. Optimization Plan and Fiscal 2026 Guidance
The company opened seven new stores and closed 28 underperforming locations, ending the quarter with 549 stores across 16 states, and plans to complete nine additional closures. Fiscal 2026 guidance was reaffirmed with net sales expected between $4.60 billion and $4.72 billion and adjusted EPS of $0.45 to $0.55.