Grocery Outlet Holding's stock price plunged over 20% in pre-market trading on Wednesday following the release of its fourth-quarter 2024 earnings report. The discount grocery chain missed earnings estimates and issued disappointing guidance for 2025, citing various operational challenges and plans for restructuring.

The company reported adjusted earnings per share of $0.15 for Q4, missing analysts' expectations of $0.17. Gross margins were pressured by higher egg prices and elevated inventory shrinkage due to ongoing systems issues. Grocery Outlet's 2025 earnings guidance of $0.70 to $0.75 per share also fell short of estimates, reflecting higher costs and investments.

To address the execution challenges, the company announced plans to moderate its new store growth and exit certain underperforming markets. Grocery Outlet plans to open 33 to 35 net new stores in 2025, down from previous expectations of around 55 to 60 stores. It will also incur $36 million to $45 million in restructuring charges related to exiting store leases and supply chain changes.

Furthermore, Grocery Outlet appointed new leadership, with Jason Potter joining as the President and CEO, and Chris Miller as the Chief Financial Officer. The new executives aim to drive operational improvements, enhance systems and inventory management, and focus on capital allocation to improve profitability and returns on invested capital.