Grocery Outlet (GO) Q2 2026 earnings summary

Executive summary

• Net sales rose 1.1% year-over-year to $1.19 billion in Q2 2026, driven by new store openings, partially offset by closures and a 0.3% decline in comparable store sales due to a 2.1% decrease in average transaction size and a 1.8% increase in transaction count.

• Operating income for Q2 was $15.8 million, including $5.4 million in net restructuring charges; adjusted EBITDA was $65.7 million and adjusted net income was $20.3 million ($0.20 per diluted share).

• For the first half, net sales increased 2.3% to $2.36 billion, but a $158 million non-cash goodwill impairment led to a net loss of $174.7 million.

• 10 new stores opened and 12 closed in Q2, ending with 547 stores in 16 states; 36 underperforming stores closed as part of the Optimization Plan.

• Optimization Plan and operational enhancements are expected to improve profitability, with store closures projected to eliminate a $12 million drag on annualized adjusted EBITDA by 2027.

Financial highlights

• Q2 2026 net sales were $1.19 billion, up 1.1% year-over-year; comparable store sales declined 0.3%.

• Q2 gross margin was 30.2%, down 40 basis points year-over-year due to increased promotions and inventory markdowns.

• Adjusted EBITDA for Q2 was $65.7 million (5.5% of net sales); adjusted net income was $20.3 million.

• Q2 SG&A expenses were $339.5 million (28.5% of net sales), up less than 1% year-over-year.

• Cash and cash equivalents at quarter-end were $74.2 million, with $154 million revolver availability.

Outlook and guidance

• Fiscal 2026 guidance: net sales $4.70–$4.72 billion, comparable store sales -0.5% to 0.0%, gross margin 29.8%–30.0%.

• Adjusted EBITDA expected at $225–$235 million; diluted adjusted EPS $0.50–$0.55; capital expenditures (net) $170 million.

• Net new store openings projected at 30–33 for the year, focusing on clustered locations and disciplined underwriting.

• Q3 guidance: comparable store sales -1% to 0%, gross margin 29.8%–30%, adjusted EBITDA $58–$61 million, EPS $0.14–$0.16.

• Cyclospora outbreak expected to be a 100 basis point headwind to Q3 comps.