Grocery Outlet Shares Plunge 23% After Q4 EPS Miss, Reveals 36 Store Closures
Grocery Outlet’s Q4 adjusted EPS of $0.19 missed estimates by $0.02 and net sales of $1.215 billion fell short by $20 million, driving shares down 23.2% after hours. The company will close 36 underperforming stores in 2026 and sees Q1 comp sales down 2.5%-1.5% with 40-basis-point gross margin hit.
1. Q4 earnings miss and stock drop
Grocery Outlet reported fourth-quarter adjusted EPS of $0.19 versus estimates of $0.21 and net sales of $1.215 billion below the $1.235 billion consensus, prompting a 23.2% after-hours share decline.
2. Comparable sales and margin trends
Comparable-store sales dipped 0.8% as average transaction size fell 1.7% despite a 0.9% rise in transaction count, while gross margin expanded 20 basis points to 29.7% and adjusted EBITDA rose 18.8% to $68 million.
3. Store optimization plan
The company opened seven stores in Q4, ending the period with 570 locations, and unveiled a plan to close 36 underperforming stores in 2026, including lease terminations and subleases to optimize its network.
4. Guidance and outlook
Guidance anticipates Q1 comparable-store sales down 2.5%-1.5%, a 40-basis-point gross margin drag from store closure liquidations, adjusted EBITDA of $39 million-$43 million and FY2026 net sales of $4.60 billion-$4.72 billion.