Operating performance has deteriorated significantly, with operating margins swinging from positive territory to a negative -4.73% in 2026Q1 despite maintaining a gross margin of 29.6%.
| Sales/Revenue | 4.73B | 4.69B | 4.37B | 3.97B | 3.58B | 3.08B | 3.13B | 2.56B | 2.29B | 2.08B |
| Revenue Growth % | 6.04% | 7.26% | 10.13% | 10.94% | 16.19% | -1.76% | 22.47% | 11.89% | 10.22% | - |
| Cost of Goods Sold | 3.31B | 3.27B | 3.05B | 2.73B | 2.49B | 2.13B | 2.16B | 1.77B | 1.59B | 1.44B |
| COGS % of Revenue | - | 69.73% | 69.76% | 68.72% | 69.48% | 69.19% | 68.95% | 69.25% | 69.6% | 69.55% |
| Gross Profit | 1.42B | 1.42B | 1.32B | 1.24B | 1.09B | 948.79M | 973.35M | 787.1M | 695.4M | 631.88M |
| Gross Margin % | 30.07% | 30.27% | 30.24% | 31.28% | 30.52% | 30.81% | 31.05% | 30.75% | 30.4% | 30.45% |
| Gross Profit Growth % | - | 7.36% | 6.46% | 13.7% | 15.1% | -2.52% | 23.66% | 13.19% | 10.05% | - |
| Operating Expenses | 1.2B | 1.64B | 1.24B | 1.12B | 997.11M | 859.69M | 865.97M | 718.76M | 612.93M | 554.95M |
| OpEx % of Revenue | - | 35% | 28.45% | 28.11% | 27.87% | 27.92% | 27.63% | 28.08% | 26.79% | 26.74% |
| Selling, General & Admin | 1.2B | 1.33B | 1.24B | 1.12B | 997.11M | 859.69M | 810.49M | 670.88M | 567.51M | 511.8M |
| SG&A % of Revenue | - | 28.41% | 28.45% | 28.11% | 27.87% | 27.92% | 25.86% | 26.21% | 24.81% | 24.66% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 0 | 308.71M | 0 | 0 | 0 | 0 | 55.48M | 47.88M | 45.42M | 0 |
| Operating Income | 217.17M | -221.71M | 78.33M | 125.78M | 94.99M | 89.09M | 107.38M | 68.34M | 82.47M | 76.94M |
| Operating Margin % | 4.59% | -4.73% | 1.79% | 3.17% | 2.65% | 2.89% | 3.43% | 2.67% | 3.6% | 3.71% |
| Operating Income Growth % | - | -383.05% | -37.73% | 32.42% | 6.62% | -17.02% | 57.11% | -17.13% | 7.19% | - |
| EBITDA | 348.82M | -91.32M | 186.53M | 213.76M | 173.24M | 160.22M | 165.43M | 118.49M | 129.52M | 120.09M |
| EBITDA Margin % | 7.38% | -1.95% | 4.27% | 5.39% | 4.84% | 5.2% | 5.28% | 4.63% | 5.66% | 5.79% |
| EBITDA Growth % | 107.05% | -148.95% | -12.74% | 23.39% | 8.13% | -3.15% | 39.62% | -8.52% | 7.85% | - |
| D&A (Non-Cash Add-back) | 131.65M | 130.39M | 108.21M | 87.98M | 78.25M | 71.12M | 58.05M | 50.14M | 47.06M | 43.16M |
| EBIT | 217.17M | -215.73M | 84.14M | 126.99M | 94.84M | 94.32M | 108.91M | 62.18M | 74.54M | 72.16M |
| Net Interest Income | -27.33M | -28.54M | -21.25M | -15.28M | -15.7M | -15.5M | -20.01M | -45.88M | -55.36M | -49.7M |
| Interest Income | 4.81M | 4.92M | 6.72M | 7.63M | 3.39M | 1.32M | 1.77M | 2.01M | 1.35M | 1.13M |
| Interest Expense | 32.13M | 33.46M | 27.97M | 22.91M | 19.09M | 16.82M | 21.78M | 47.89M | 56.71M | 50.83M |
| Other Income/Expense | -621.71M | -27.48M | -22.16M | -21.7M | -19.24M | -11.59M | -20.24M | -51.56M | -60.62M | -51.16M |
| Pretax Income | -404.54M | -249.19M | 56.17M | 104.08M | 75.75M | 77.5M | 87.13M | 16.78M | 21.85M | 25.77M |
| Pretax Margin % | -8.55% | -5.31% | 1.28% | 2.62% | 2.12% | 2.52% | 2.78% | 0.66% | 0.96% | 1.24% |
| Income Tax | -22.62M | -24.27M | 16.71M | 24.64M | 10.7M | 15.19M | -19.58M | 1.36M | 5.98M | 5.17M |
| Effective Tax Rate % | 5.59% | 9.74% | 29.74% | 23.68% | 14.12% | 19.6% | -22.47% | 8.12% | 27.38% | 20.06% |
| Net Income | -381.92M | -224.91M | 39.47M | 79.44M | 65.05M | 62.31M | 106.71M | 15.42M | 15.87M | 20.6M |
| Net Margin % | -8.08% | -4.8% | 0.9% | 2% | 1.82% | 2.02% | 3.4% | 0.6% | 0.69% | 0.99% |
| Net Income Growth % | -2323.94% | -669.9% | -50.32% | 22.11% | 4.4% | -41.61% | 592.09% | -2.83% | -22.97% | - |
| Net Income (Continuing) | -381.92M | -224.91M | 39.47M | 79.44M | 65.05M | 62.31M | 106.71M | 15.42M | 15.87M | 20.6M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -3.88 | -2.30 | 0.40 | 0.79 | 0.65 | 0.63 | 1.08 | 0.19 | 0.21 | 0.28 |
| EPS Growth % | -2531.25% | -675% | -49.37% | 21.54% | 3.17% | -41.67% | 468.42% | -9.52% | -25% | - |
| EPS (Basic) | - | -2.30 | 0.40 | 0.80 | 0.67 | 0.65 | 1.16 | 0.20 | 0.21 | 0.28 |
| Diluted Shares Outstanding | 98.43M | 97.98M | 99.61M | 100.83M | 100.16M | 99.42M | 98.45M | 81.86M | 74.23M | 74.23M |
| Basic Shares Outstanding | 98.43M | 97.98M | 98.71M | 98.71M | 96.81M | 95.72M | 91.82M | 81.86M | 74.19M | 74.19M |
| Dividend Payout Ratio | - | - | - | 0.02% | 0.16% | 0.3% | 0.41% | 23.64% | 967.9% | 6.34% |
Margin Compression and Scaling
As reported in recent financial filings, Grocery Outlet's revenue growth has decelerated from double-digit peaks in 2024 to 3.6% in 2026Q1, suggesting that the company's aggressive store expansion strategy is encountering diminishing returns as it attempts to penetrate new markets outside its core Western footprint.
The transition from 11.7% growth in 2024Q2 to current low-single-digit levels indicates that the 'treasure hunt' model may be struggling to maintain its value proposition in less dense regions. Investors should monitor whether this deceleration reflects a saturation of the opportunistic sourcing supply chain or a broader softening in consumer demand for extreme-value retail.
Based on the provided income statement data, Grocery Outlet has maintained a relatively stable gross margin near 30%, yet the company's ability to convert this into operating profit has collapsed, with operating margins swinging from positive territory to a recent negative reading of -4.73% in 2026Q1.
While the procurement engine remains effective at securing branded closeouts, the inability to protect operating margins suggests that SG&A expenses are scaling disproportionately to revenue. This divergence warrants further investigation into whether the company is incurring permanent structural costs related to its Mid-Atlantic expansion or if these are temporary inefficiencies.
According to the latest quarterly results, Grocery Outlet's SG&A expenses have consistently outpaced gross profit growth, leading to a significant erosion of operating leverage as the company struggles to maintain profitability while scaling its decentralized Independent Operator model across new, geographically diverse retail territories.
The lack of operating leverage is particularly concerning given the company's reliance on a capital-light model that should theoretically benefit from scale. The current trend suggests that the costs of managing a larger, more complex distribution network are currently outweighing the incremental benefits of store-level entrepreneurial incentives.
As evidenced by the stark contrast between gross profit and net income, Grocery Outlet's earnings quality appears compromised by significant non-operating charges, with net income swinging to a substantial loss of $180.3 million in 2026Q1 despite the company maintaining a gross margin of nearly 30%.
The volatility in net income, characterized by large quarterly losses, suggests that investors should look past the headline revenue figures to identify potential asset impairments or one-time charges. The absence of stock-based compensation in recent periods may also mask the true economic cost of talent retention within the Independent Operator framework.
While the market often views Grocery Outlet as a defensive staple, the income statement suggests a vulnerability to supply-side constraints, as the company's reliance on opportunistic procurement makes it susceptible to shifts in manufacturer overstock levels that are outside of management's direct operational control.
Short-term margin compression may be a symptom of a structural mismatch between the company's fixed cost base and the availability of high-margin closeout inventory. If the supply of branded overstock remains tight, the company may be forced to pivot toward lower-margin staples, which would fundamentally alter its competitive advantage and long-term valuation.
Quick answers to the most common questions about buying GO stock.
For fiscal year 2025, Grocery Outlet Holding Corp. (GO) reported total revenue of $4.69B. This represents a 125.9% increase compared to $2.08B in 2017.
Grocery Outlet Holding Corp. (GO) reported a net loss of $224.9M for the fiscal year ending 2025.
Grocery Outlet Holding Corp. (GO) reported an operating income of $-221.7M, resulting in an operating profit margin of -4.7%. This margin reflects the operational efficiency of the business before interest and taxes.
Grocery Outlet Holding Corp. (GO) generated $1.42B in gross profit for the year, representing a gross profit margin of 30.3%. This demonstrates the company's core pricing power and production efficiency.