Grocery Outlet (GO) Q4 2025 earnings summary

Executive summary

• Fourth quarter results were below expectations, with negative comparable sales and intensified basket pressure despite positive traffic growth.

• Operates 570 stores across 16 states as of January 3, 2026, with a differentiated off-price retail model focused on value and local experience.

• Significant non-cash impairments and restructuring led to a net loss of $218.2M in Q4 and $224.9M for the year.

• Management is closing 36 underperforming stores, launching a strategic review of UGO, and piloting new store opening strategies.

• Early signs of improvement are seen from promotional investments and operational changes, but recovery will take time.

Financial highlights

• Q4 net sales rose 10.7% to $1.22 billion, including $82.4 million from a 53rd week; fiscal 2025 net sales reached $4.69 billion.

• Comparable store sales declined 0.8% in Q4, driven by a 1.7% drop in average transaction size, partially offset by a 0.9% increase in traffic.

• Gross margin for Q4 was 29.7% (up 20 bps YoY); fiscal year gross margin was 30.3%.

• Net loss was $218.2 million in Q4 and $224.9 million for the year, mainly due to $258.8 million in non-cash impairment charges.

• Adjusted EBITDA for Q4 was $68 million (up 18.8% YoY); full-year adjusted EBITDA was $254.3 million (5.4% of net sales).

Outlook and guidance

• Fiscal 2026 net sales expected between $4.60 billion and $4.72 billion, with 30–33 net new stores planned.

• Comparable store sales projected between -2.0% and 0.0% for 2026; Q1 comps guided to -2.5% to -1.5%.

• Gross margin for FY26 expected at 29.7%–30%, reflecting promotional investments and store closure impacts.

• Adjusted EBITDA forecasted at $220–$235 million; adjusted EPS expected at $0.45–$0.55.

• Store closures to improve annualized adjusted EBITDA by ~$12 million but will moderate revenue growth by ~2%.