MW Here's why more than $1 billion in sales was not enough for Grocery Outlet

By Claudia Assis

Grocery Outlet stock drops more than 12% after hours

Grocery Outlet Holding Co.'s sales topped $1 billion in the fourth quarter, slightly above Wall Street's expectations, but weaker quarterly profits and 2025 guidance dragged the stock down more than 12% in the extended session Tuesday.

Grocery Outlet (GO) presented a mixed outlook for this year, seeming to spook investors who had better hopes for the off-price grocer.

The company called for 2025 net sales between $4.7 billion and $4.8 billion, in line with estimates.

But it guided for adjusted per-share profit between 70 cents and 75 cents for the year, a far cry from FactSet consensus for 94 cents a share. Its forecast for new store openings this year, a net of 33 stores to 35 stores, also contrasted with around 49 stores that Wall Street expected.

Fourth-quarter numbers were also mixed. Grocery Outlet reported fourth-quarter adjusted profit of 15 cents a share on sales of $1.10 billion. That compares with estimates for adjusted EPS of 17 cents on sales of $1.09 billion.

Customers "responded to our improved value assortments," board Chair Eric Lindberg said in a statement.

"I remain very encouraged about the prospects of Grocery Outlet, with our highly differentiated model and significant runway for growth and long-term value creation for our shareholders."

Shares of Grocery Outlet have lost about 39% in the past 12 months, contrasting with gains of around 17% for the S&P 500 index SPX.

-Claudia Assis

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February 25, 2025 17:12 ET (22:12 GMT)

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