Discount grocery store chain Grocery Outlet (NASDAQ:GO) will be reporting results tomorrow afternoon. Here’s what to expect.
Last quarter Grocery Outlet reported revenues of $1.00 billion, up 9.3% year on year, missing analyst expectations by 0.4%. It was a mixed quarter for the company, with a decent beat of analysts’ earnings estimates. On the other hand, its revenue missed Wall Street’s estimates, driven by worse-than-expected same-store sales. The company also lowered its full-year adjusted EBITDA and EPS guidance, likely because it’s investing in new technology platforms to synchronize its operations.
Is Grocery Outlet buy or sell heading into the earnings? Read our full analysis here, it’s free.
This quarter analysts are expecting Grocery Outlet’s revenue to grow 5.3% year on year to $980.6 million, slowing down from the 18.9% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.16 per share.
Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St’s revenue estimates once over the last two years, and has on average exceeded top line expectations by 2.4%.
Looking at Grocery Outlet’s peers in the non-discretionary retail segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. Sprouts delivered top-line growth of 7.7% year on year, beating analyst estimates by 0.2% and Walmart reported revenues up 5.7% year on year, exceeding estimates by 2.4%. Sprouts traded up 3.3% on the results, Walmart was up 2%.
Read our full analysis of Sprouts’s results here and Walmart’s results here.
There has been positive sentiment among investors in the non-discretionary retail segment, with the stocks up on average 8% over the last month. Grocery Outlet is up 4.1% during the same time, and is heading into the earnings with analyst price target of $31, compared to share price of $26.4.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefitting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.