Grocery Outlet to close 36 stores

EMERYVILLE, Calif., March 04, 2026 (GLOBE NEWSWIRE) — Grocery Outlet Holding Corp. BB #:154673 today announced financial results for the fourth quarter and full fiscal year ended January 3, 2026, both of which contained one additional week versus the comparable prior periods.

Additionally, the Company today announced a business optimization plan to improve operational execution, strengthen long-term profitability and increase cash flow generation.

Highlights for Fourth Quarter Fiscal 2025 as compared to Fourth Quarter Fiscal 2024:

• Net sales increased by 10.7% to $1.22 billion, which includes $82.4 million from the 53rd week.
• Comparable store sales declined by 0.8% on a 13-week basis.
• Gross margin was 29.7% compared to 29.5% last year.
• Operating loss was $234.8 million, which included $110.2 million in non-cash impairment of long-lived assets and $149.0 million in non-cash goodwill impairment.
• Net loss was $218.2 million, or $(2.22) per diluted share, compared to net income of $2.3 million, or $0.02 per diluted share last year. Adjusted net income(1) was $18.7 million, or $0.19 diluted adjusted earnings per share(1), compared to $14.5 million, or $0.15 diluted adjusted earnings per share(1) last year.
• Adjusted EBITDA(1) was $68.0 million, representing 5.6% of net sales.

Highlights for Fiscal 2025 as compared to Fiscal 2024:

• Net sales increased by 7.3% to $4.69 billion.
• Comparable store sales increased by 0.5% on a 52-week basis.
• Gross margin was 30.3% compared to 30.2% last year.
• Operating loss was $221.7 million, which included $113.8 million in non-cash impairment of long-lived assets, $45.9 million in restructuring charges and $149.0 million in non-cash goodwill impairment.
• Net loss was $224.9 million, or $(2.30) per diluted share, compared to net income of $39.5 million, or $0.40 per diluted share last year. Adjusted net income(1) was $75.2 million, or $0.76 diluted adjusted earnings per share(1), compared to $76.3 million, or $0.77 diluted adjusted earnings per share(1) last year.
• Adjusted EBITDA(1) increased by 7.4% to $254.3 million, representing 5.4% of net sales.

(1) Adjusted net income, diluted adjusted earnings per share and adjusted EBITDA are non-GAAP financial measures, which exclude the impact of certain special items. Please note that our non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the “Non-GAAP Financial Information” section of this release as well as the respective reconciliations of our non-GAAP financial measures below for additional information about these items.

“We made progress on our strategic priorities in 2025; however, our fourth-quarter results made clear that we have more work to do, and we’re moving quickly,” said Jason Potter, President and CEO of Grocery Outlet.

“Consumer pressure intensified, federally funded benefits were delayed, and competition grew more promotional in the fourth quarter. In response, we have begun to sharpen our focus on what matters most: delivering clearer value and a better in-store experience. We’re intensely focused on restoring the opportunistic mix to rebuild value perception with the customer and advancing our store refresh program, and we’re already seeing early, measurable improvements. At the same time, we’re closing underperforming stores, reshaping our new store growth strategy and reallocating resources to strengthen operating results and returns on capital. We are confident that we have identified the core challenges, and now have the right plans in place and the right team to execute them.”

Optimization Plan and Restructuring Plan:

To strengthen long-term profitability and cash flow generation, improve operational execution, optimize our existing store footprint and align with our disciplined new store growth strategy, in the first quarter of fiscal 2026 we conducted a strategic, financial and operational analysis of our store fleet.

Following that review, on March 2, 2026, our Board of Directors adopted the Optimization Plan that provides for the closure of 36 financially underperforming stores, including the termination or sublease of the applicable store leases, the termination or sublease of a lease for a distribution center facility that we are no longer utilizing, and the termination of operator agreements with independent operators (“IOs”) for the applicable store locations as well as certain other store locations. These actions under the Optimization Plan are expected to be substantially completed during fiscal 2026.

In addition, preceding the adoption of the Optimization Plan, during the reporting process for the audited consolidated financial statements for fiscal 2025, we determined that the long-lived assets of the Closure Stores were impaired, and recognized $110 million of non-cash charges in Impairment of long-lived assets on the condensed consolidated statements of operations and comprehensive income (loss).

In connection with the Optimization Plan, we currently estimate we will incur between $14 million and $25 million in net total restructuring charges in fiscal 2026, including between $51 million and $63 million of estimated cash expenditures primarily for lease termination fees, and between $11 million and $14 million of bad debt expense, partially offset by net non-cash write-off of right-of-use assets and lease liabilities associated with these leases of between $(48) million and $(52) million.

In addition to the above costs, we estimate that our fiscal 2026 gross profit may be negatively impacted by between $4 million and $6 million as a result of sales discounts or product markdowns to liquidate on-hand inventory during the wind-down of operations of the Closure Stores.

As previously reported, the Company initiated a restructuring plan during the fourth quarter of fiscal 2024, which was substantially completed in the second quarter of fiscal 2025, intended to improve long-term profitability, cash flow generation and return on invested capital, optimize the footprint of new store growth and lower the Company’s cost base (the “Restructuring Plan”).

As of January 3, 2026, the Company incurred total costs under the Restructuring Plan of $61.8 million, including (i) $15.9 million of non-cash impairment of long-lived assets in fiscal 2024, and (ii) $38.2 million of cash expenditures and $7.7 million of non-cash impairment and disposal of long-lived assets in fiscal 2025. All costs incurred under the Restructuring Plan are included in Restructuring charges on the condensed consolidated statements of operations and comprehensive income (loss).

To read the entire financial report, click here.

About Grocery Outlet:
Based in Emeryville, California, Grocery Outlet is a growth-oriented extreme value retailer of quality, name-brand consumables and fresh products sold primarily through a network of independently operated stores. Grocery Outlet and its subsidiaries have more than 560 stores in California, Washington, Oregon, Pennsylvania, Tennessee, Idaho, Nevada, Maryland, Ohio, New Jersey, North Carolina, Georgia, Alabama, Delaware, Kentucky and Virginia.