Grocery Outlet reaches milestone: 1st quarter to hit $1B in net sales

Grocery Outlet Holding Corp. achieved record-setting results during its second quarter, reporting Tuesday that net sales topped $1 billion—a company first. 

For the quarter ended July 1, net sales increased 12.5% to $1.01 billion, the Emeryville, California-based retailer reported.

Comparable-store sales rose 9.2% during the period, driven almost entirely by traffic growth, while average transaction size remained flat. Net income jumped 21.8% to $24.5 million, or $0.24 per diluted share.

The discounter has held onto its upward trajectory even as grocery prices moderate nationwide. 

"Our second-quarter results came in ahead of our expectations and were driven by strong same-store sales growth and gross margin expansion,” CEO RJ Sheedy said in a statement.

The company continued its rapid expansion, opening four new locations during the quarter, bringing its total to 447 grocery stores nationwide.

Grocery Outlet reported it is still on track to open 25 to 28 new stores this year, with eight of those in the third quarter and the remainder in the fourth quarter.

Grocery Outlet, which touts big discounts on brand-name products, reported its adjusted EBITDA increased by 22.7% to $70.5 million or 7.0% of net sales.

Adjusted net income also jumped to $31.9 million, or $0.27 per adjusted diluted share.

The retailer expressed confidence in its current momentum and raised its fiscal 2023 outlook for comparable-store sales to 7% to 8%, up from 5% to 6%.

Grocery Outlet also raised its guidance during the first quarter, after reporting same-store sales growth of 12.1% for the quarter ended April 1. 

“Our differentiated model and compelling value proposition are resonating with both new and existing customers, and our performance is being driven by strong transaction growth,” Sheedy said in a statement. “Looking forward, we are pleased to be raising guidance for the year and we are well positioned for future growth.”