EMERYVILLE, Calif. - Grocery Outlet Holding Corp. (NASDAQ: NASDAQ:GO) reported a robust fourth quarter, surpassing analyst expectations with an adjusted EPS of $0.18, $0.02 higher than the consensus of $0.16.
The company's revenue also exceeded forecasts, reaching $989.82 million against the predicted $979.28 million. The positive earnings release, coupled with an optimistic outlook for the fiscal year 2024, propelled the company's shares to climb by 5.78%.
The discount grocery retailer's net sales saw a 6.3% increase from the same quarter last year, reaching nearly $990 million. This uptick was driven by a notable 2.7% rise in comparable store sales, largely attributed to a 7.5% increase in transactions, although this was partially offset by a 4.5% decrease in average transaction size.
Despite experiencing some disruptions due to the implementation of new technology platforms, which negatively impacted sales and gross margin, the company maintained a stable gross margin of 30.2%.
Grocery Outlet's CEO, RJ Sheedy, highlighted the company's strong consumer appeal, which led to significant traffic and transaction count growth. "Our value proposition continues to resonate with consumers resulting in strong traffic and transaction count growth," Sheedy stated. He also expressed enthusiasm about the pending acquisition of United Grocery Outlet, which is expected to bolster store growth in the Southeast.
Looking ahead, Grocery Outlet provided fiscal 2024 guidance that includes an EPS range of $1.14 to $1.20, with the midpoint slightly above the analyst consensus of $1.14. The company anticipates net sales between $4.3 billion and $4.35 billion, with the midpoint also exceeding the consensus estimate of $4.311 billion. Moreover, the company forecasts adjusted EBITDA to be between $275 million and $283 million.
Investors responded positively to the earnings beat and the company's forward-looking statements, as reflected in the stock's significant upswing. Grocery Outlet's performance demonstrates resilience and strategic growth, even as it navigates technological upgrades and prepares for expansion through acquisitions.
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