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Earnings Results: Grocery Outlet stock sinks after sales miss

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Grocery Outlet Holding Corp. shares fell sharply in extended trading after the supermarket chain reported mixed first-quarter results Tuesday, with net income beating but revenue falling short of analysts’ expectations.

Shares of Grocery Outlet
GO,
-1.75%

fell as much as 6.3% after hours, after declining 1.75% in the regular session to close at $40.54. 

The Emeryville, Calif.-based company, with stores mostly in Western states and Pennsylvania, reported net income of $18.9 million, or 19 cents a share, compared with $12.6 million, or 13 cents a share, in the year-ago period. Non-GAAP earnings per share was 23 cents, adjusted for stock-based compensation, tax and other costs. Revenue fell to $752.5 million from $760.3 million in the year-ago quarter.

Analysts surveyed by FactSet had forecast earnings of 22 cents a share on revenue of $757.6 million.

First-quarter comparable-store sales fell 8.2%, compared to a 17.4% increase in the year-ago period. The company said comparable-store sales for the second quarter so far are in the negative low double digits.

“The core drivers of our business remain strong across opportunistic supply, customer excitement, and the engagement of our independent operators,” said Chief Financial Officer Charles Bracher in a statement. “As we navigate the transitory impact of reopening and peak-COVID comparisons from 2020, we continue to anchor ourselves in absolute performance metrics which remain stable.”

The company, which has 389 stores in six states, expects to open 36 to 38 stores in fiscal 2021, with one closure, it said.

Grocery Outlet shares are up about 3% year to date but have fallen nearly 5% in the past three months. They have risen about 10.5% in the past year, compared with the S&P 500 Index
SPX,
-0.87%
,
which is up almost 45% in the past 52 weeks.

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