Grocery Outlet (NASDAQ:GO) Shares Gap Up After Earnings Beat

Key Points

• Grocery Outlet shares jumped after the company reported better-than-expected quarterly results, with the stock gapping up from a prior close of $7.74 to an opening price of $9.11.
• The company earned $0.05 per share versus analyst expectations of $0.02, and revenue came in at $1.17 billion, slightly above estimates of $1.15 billion, with sales up 3.6% year over year.
• Management also set FY 2026 EPS guidance of $0.45 to $0.55, while investors still face an overhang from a class-action lawsuit and generally cautious analyst sentiment.

Grocery Outlet Holding Corp. (NASDAQ:GO - Get Free Report)'s share price gapped up before the market opened on Thursday after the company announced better than expected quarterly earnings. The stock had previously closed at $7.74, but opened at $9.11. Grocery Outlet shares last traded at $7.9290, with a volume of 1,740,217 shares changing hands.

The company reported $0.05 earnings per share for the quarter, beating analysts' consensus estimates of $0.02 by $0.03. Grocery Outlet had a negative net margin of 4.80% and a positive return on equity of 5.93%. The firm had revenue of $1.17 billion for the quarter, compared to analyst estimates of $1.15 billion. During the same quarter in the previous year, the firm posted $0.13 earnings per share. The business's revenue was up 3.6% on a year-over-year basis. Grocery Outlet has set its FY 2026 guidance at 0.450-0.550 EPS.

Key Stories Impacting Grocery Outlet

Here are the key news stories impacting Grocery Outlet this week:

• Positive Sentiment: First-quarter earnings and revenue both beat Wall Street estimates, easing near-term concerns about execution. Grocery Outlet Holding Corp. Announces First Quarter Fiscal 2026 Financial Results
• Positive Sentiment: Management reaffirmed its outlook and outlined Q2 EPS of $0.11 to $0.13, helping support confidence in the turnaround story. Grocery Outlet outlines Q2 2026 EPS of $0.11 to $0.13 while targeting ~100 store refreshes
• Neutral Sentiment: The earnings call transcript and related coverage may give investors more detail on the company’s restructuring and store optimization plans, but they do not appear to be a separate stock-moving catalyst on their own. Full Transcript: Grocery Outlet Holding Q1 2026 Earnings Call
• Negative Sentiment: Class-action lawsuit headlines remain an overhang and could keep pressure on investor sentiment, even after the earnings-driven rally. GROCERY OUTLET DEADLINE MAY 15th: Bragar Eagel & Squire, P.C. Reminds Grocery Outlet Holding Corp. Investors that a Class Action Lawsuit Has Been Filed

Analyst Upgrades and Downgrades

GO has been the subject of a number of research reports. Jefferies Financial Group reiterated a "hold" rating and set a $7.00 target price (down from $18.00) on shares of Grocery Outlet in a report on Thursday, March 5th. DA Davidson set a $8.00 price objective on Grocery Outlet in a research report on Thursday, March 5th. Craig Hallum downgraded Grocery Outlet from a "strong-buy" rating to a "hold" rating in a report on Thursday, March 5th. Wells Fargo & Company set a $9.00 target price on Grocery Outlet in a research report on Thursday. Finally, Weiss Ratings raised Grocery Outlet from a "sell (d-)" rating to a "sell (d)" rating in a research report on Friday, May 1st. Eleven equities research analysts have rated the stock with a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat, the stock presently has an average rating of "Reduce" and a consensus price target of $10.86.

Insider Activity

In other news, Director Erik D. Ragatz acquired 125,000 shares of the firm's stock in a transaction dated Wednesday, March 11th. The stock was bought at an average price of $6.00 per share, with a total value of $750,000.00. Following the transaction, the director directly owned 326,500 shares in the company, valued at approximately $1,959,000. The trade was a 62.03% increase in their position. The purchase was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. Also, CEO Jason J. N. Potter acquired 286,097 shares of the stock in a transaction dated Thursday, March 19th. The shares were purchased at an average price of $5.90 per share, for a total transaction of $1,687,972.30. Following the completion of the purchase, the chief executive officer directly owned 574,366 shares in the company, valued at $3,388,759.40. The trade was a 99.25% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. Over the last three months, insiders acquired 899,905 shares of company stock valued at $5,396,307 and sold 89,493 shares valued at $524,431. 4.50% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Grocery Outlet

Hedge funds and other institutional investors have recently bought and sold shares of the business. T. Rowe Price Investment Management Inc. raised its stake in Grocery Outlet by 54.0% in the fourth quarter. T. Rowe Price Investment Management Inc. now owns 15,763,945 shares of the company's stock valued at $159,216,000 after buying an additional 5,528,722 shares during the period. Millennium Management LLC boosted its stake in shares of Grocery Outlet by 3,558.0% during the 3rd quarter. Millennium Management LLC now owns 1,825,407 shares of the company's stock worth $29,298,000 after acquiring an additional 1,775,505 shares during the period. UBS Group AG increased its holdings in shares of Grocery Outlet by 87.6% during the 4th quarter. UBS Group AG now owns 2,726,299 shares of the company's stock worth $27,536,000 after acquiring an additional 1,272,859 shares during the last quarter. Boston Partners increased its holdings in shares of Grocery Outlet by 219.7% during the 3rd quarter. Boston Partners now owns 1,462,633 shares of the company's stock worth $23,475,000 after acquiring an additional 1,005,126 shares during the last quarter. Finally, Invesco Ltd. raised its stake in Grocery Outlet by 106.5% in the 4th quarter. Invesco Ltd. now owns 1,914,410 shares of the company's stock valued at $19,336,000 after acquiring an additional 987,367 shares during the period. Institutional investors own 99.87% of the company's stock.

Grocery Outlet Trading Down 1.1%

The business has a 50 day moving average of $7.16 and a two-hundred day moving average of $9.43. The firm has a market cap of $757.43 million, a P/E ratio of -3.34, a PEG ratio of 2.34 and a beta of 0.66. The company has a current ratio of 1.37, a quick ratio of 0.32 and a debt-to-equity ratio of 0.49.

Grocery Outlet Company Profile

Grocery Outlet Holding Corp. NASDAQ: GO is a specialty discount retailer that offers consumers deeply discounted groceries by purchasing excess inventory, closeouts, and overstocks from manufacturers and distributors. Headquartered in Emeryville, California, the company operates two primary banners—Grocery Outlet and Fresh2Go—with a combined footprint of more than 400 stores. Its product assortment spans fresh produce, meat, dairy, bakery items, household staples, natural and organic offerings, and select specialty products, all sold at significant markdowns compared to conventional supermarkets.

The company's unique buying model enables it to source inventory through opportunistic purchases of surplus freight, discontinued items, and closeout deals, which it then passes on as savings to its customers.

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