| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 83 | — | 17.8x | Top tier | |
Growth | 13 | 5.1% | 7.1% | Bottom tier | |
Quality | 20 | -12.5% | 4.5% | Bottom tier | |
Safety | 36 | — | 2.6x | Bottom tier | |
Capital Return | 12 | 0.00% | 2.12% | Bottom tier | |
Momentum | 46 | -46.4% | 2.9% | Around median | |
Sentiment | 95 | 12 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Grocery Outlet Holding Corp. operates a network of retail stores run by independent operators, with its revenue model centered on selling grocery and consumer goods at clear discounts through a mix of opportunistic products, everyday items, and private-label products. Management describes the opportunistic assortment as a driver of value, sales, margins, and the “treasure hunt” experience, with price differentials of 15% to 20% versus discount retail competitors and 30% to 40% versus conventional stores, and savings of up to 40%.
In Q2 of fiscal year 2026, net sales rose 1% to $1.19 billion, while comparable-store sales declined 0.3% after pressure of approximately 0.5 percentage points from the timing of Easter. Gross profit was $360.7 million, with a gross margin of 30.2%, down 0.3 percentage points year over year but above management’s guidance range of 29.8% to 30.0%. The company reported net income of $5.6 million and diluted earnings per share of $0.06, while adjusted net income was $20.3 million and adjusted earnings per share were $0.20.
The mix improvement came from an increase of more than 3 percentage points in the share of opportunistic products and an acceleration of approximately 5 percentage points in their comparable sales compared with the beginning of Q1 of fiscal year 2026. Grocery, the company’s largest category, recorded comparable growth of 3.5%, with the improvement plan expanding into the prepared foods and frozen categories. In contrast, the adjusted earnings before interest, taxes, depreciation, and amortization margin was 5.5%, compared with 5.7% a year ago, although the $65.7 million result exceeded management’s expectations.
Automated analysis for informational purposes only — not investment advice.
The average analyst price target is $10.8, within a range of $9 to $12, and even the highest target remains approximately 36% below the top of the 52-week range of $18.79; the “Neutral” consensus reflects caution regarding the speed of the turnaround. No reliable positive price-to-earnings multiple is available because of the $2.30 per-share loss in fiscal year 2025 and the twelve-month loss of approximately $3.88 per share. The wide 52-week range of $5.655 to $18.79 indicates a sharp revaluation associated with losses under generally accepted accounting principles and weak comparable sales, despite the improvement in Q2 of fiscal year 2026 and the raised lower end of guidance.
Figures in the text are as of 2026-09-02; the live price is shown at the top of the page.
The turnaround centers on restoring the opportunistic product assortment and improving its flow and the communication of its value to customers through Extreme Value and the “treasure hunt” experience. In Q2 of fiscal year 2026, the opportunistic mix expanded by more than 3 percentage points, and its comparable sales accelerated by approximately 5 percentage points compared with the beginning of Q1 of fiscal year 2026. The new supplier base also grew by more than 11%, and grocery, the company’s largest category, recorded comparable growth of 3.5%.
Comparable-store sales declined 0.3% in Q2 of fiscal year 2026, but improved by 0.7 percentage points compared with Q1 of fiscal year 2026 and exceeded management’s expectations for a decline of between 1.5% and 2.0%. Comparable sales entered positive territory in May and June 2026, while customer traffic rose 1.8% during the quarter. However, management expects a range from a decline of 0.5% to flat for fiscal year 2026, so the improvement has not yet translated into sustained annual growth.
Management said on August 12, 2026, that Grocery Outlet products were not included in any recalls related to the multistate Cyclospora outbreak. Nevertheless, fresh product sales came under pressure in July 2026, and the company expects a negative impact of approximately 1 percentage point on comparable-store sales in Q3 of fiscal year 2026. It also expects higher shrink in fresh products and pressure on gross margin, and therefore guided to comparable sales ranging from a decline of 1% to flat and a gross margin of between 29.8% and 30.0% for the quarter.
Grocery Outlet expects sales of between $4.70 billion and $4.72 billion and comparable-store sales ranging from a decline of 0.5% to flat in fiscal year 2026. It also targets a gross margin of between 29.8% and 30.0%, adjusted earnings before interest, taxes, depreciation, and amortization of between $225 million and $235 million, and adjusted earnings per share of between $0.51 and $0.55. The plan includes 30 to 33 net openings and net capital expenditures of $170 million.
The company completed the closure of 36 underperforming stores in April 2026 and is targeting the removal of a $12 million annual burden from adjusted earnings before interest, taxes, depreciation, and amortization. Management expects most of this benefit to be realized in fiscal year 2027 and said that the remaining stores in the East have become profitable as a group and are ahead of plan. In Q2 of fiscal year 2026, the company opened 10 stores and closed 12, with expansion directed more heavily toward existing markets.
Ian D. Ferry spoke on the August 12, 2026 call as Grocery Outlet’s new Chief Financial Officer. His appointment followed Christopher Miller’s retirement from the Chief Financial Officer position, as management announced on the same call. Ferry emphasized his focus on capital allocation discipline, improving returns on capital, and building more consistent long-term growth.
