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- Goodwill Impairment (new) — The company recorded a $158 million non-cash goodwill impairment charge in Q1 fiscal 2026 due to declining market capitalization.
Grocery Outlet reports Q2 results with $158M goodwill impairment, raises FY26 guidance
Filed August 12, 2026 · Period ending August 12, 2026 · ~2 min read
Key Changes
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high
Recorded $158M non-cash goodwill impairment in Q1 FY26 due to declining market capitalization, contributing to 26-week net loss of $174.7M ($1.77 per share).
Exhibit 99.1 view on EDGAR → -
high
Closed all 36 underperforming stores under Optimization Plan in H1 FY26; expects $15M-up to $24M total restructuring charges through FY27 to improve profitability and cash flow.
Exhibit 99.1 view on EDGAR → -
high
Q2 FY26 net sales rose 1.1% to $1.19B, but comparable store sales fell 0.3% and gross margin compressed 40 bps to 30.2%; adjusted EPS declined to $0.20 from $0.23.
Exhibit 99.1 view on EDGAR → -
high
Raised FY26 guidance: net sales now $4.70-$4.72B (from $4.60-$4.72B), adjusted EBITDA $225M-$235M (from $220M-$235M), and adjusted EPS $0.51-$0.55 (from $0.45-$0.55).
Exhibit 99.1 view on EDGAR → -
medium
Operating cash flow declined to $43.2M in Q2 from $73.6M prior year, driven by timing of liabilities, Optimization Plan lease exits, and lower net income.
Exhibit 99.1 view on EDGAR →
Summary
Grocery Outlet reported second-quarter fiscal 2026 results marked by a $158 million goodwill impairment charge taken in the first quarter, reflecting a decline in the company's market capitalization. The impairment drove a 26-week net loss of $174.7 million, or $1.77 per diluted share, compared to a loss of $0.19 per share in the prior year.
Excluding the impairment and $23.6 million in restructuring charges, adjusted net income for the half-year was $24.9 million, or $0.25 per diluted share, down from $0.36 last year. The company completed the closure of all 36 underperforming stores under its Optimization Plan during the first half of fiscal 2026, with total restructuring costs expected to reach $15 million to up to $24 million through fiscal 2027.
Operating performance showed modest top-line growth but margin pressure. Second-quarter net sales increased 1.1% to $1.19 billion, while comparable store sales declined 0.3%. Gross margin compressed 40 basis points to 30.2%, and adjusted earnings per share fell to $0.20 from $0.23. Operating cash flow declined to $43.2 million from $73.6 million in the prior-year quarter, driven by timing of liabilities and the Optimization Plan's lease exits. Despite these headwinds, management raised full-year guidance, now expecting net sales of $4.70 to $4.72 billion, adjusted EBITDA of $225 million to $235 million, and adjusted EPS of $0.51 to $0.55. The goodwill impairment signals market concerns about the company's valuation, while the Optimization Plan represents a strategic reset to stabilize margins and cash generation.
Section-by-Section Diff
Event · Item 2.02 — Results of Operations and Financial Condition
Grocery Outlet announced Q2 fiscal 2026 financial results for the quarter ended July 4, 2026.
Added in current filing · verify on EDGAR →
On August 12, 2026, Grocery Outlet Holding Corp. (the "Company") announced its financial results for the fiscal quarter ended July 4, 2026.
The company disclosed financial results for its second fiscal quarter of 2026, which ended July 4, 2026. The full results are contained in a press release furnished as an exhibit to this filing. No specific financial figures are provided in the body of the 8-K itself.
Event · Exhibit 99.1
Grocery Outlet reported Q2 fiscal 2026 results with a $158 million goodwill impairment, restructuring charges, and revised full-year guidance.
Added in current filing · view on EDGAR → · paraphrased
Net sales increased by 1.1% to $1.19 billion. Comparable store sales declined by 0.3%. Gross margin was 30.2% compared to 30.6% last year. Operating income was $15.8 million, which included $5.4 million in net restructuring charges. Net income was $5.6 million, or $0.06 per diluted share, compared to $5.0 million, or $0.05 per diluted share last year. Adjusted net income was $20.3 million, or $0.20 diluted adjusted earnings per share, compared to $22.8 million, or $0.23 diluted adjusted earnings per share last year. Adjusted EBITDA was $65.7 million, representing 5.5% of net sales.
Grocery Outlet reported Q2 fiscal 2026 net sales of $1.19 billion, up 1.1% year-over-year, but comparable store sales declined 0.3%. Gross margin compressed 40 basis points to 30.2%. Net income was $5.6 million ($0.06 per diluted share), while adjusted net income was $20.3 million ($0.20 per diluted share), down from $0.23 last year. Adjusted EBITDA was $65.7 million, or 5.5% of net sales.
Added in current filing · view on EDGAR → · paraphrased
Net sales increased by 2.3% to $2.36 billion. Comparable store sales declined by 0.6%. Gross margin was 29.9% compared to 30.5% last year. Operating loss was $162.2 million, which included $158.0 million in non-cash goodwill impairment and $23.6 million in net restructuring charges. Net loss was $174.7 million, or $(1.77) per diluted share, compared to net loss of $18.4 million, or $(0.19) per diluted share last year. Adjusted net income was $24.9 million, or $0.25 diluted adjusted earnings per share, compared to $35.8 million, or $0.36 diluted adjusted earnings per share last year. Adjusted EBITDA was $108.8 million, representing 4.6% of net sales.
For the 26 weeks ended July 4, 2026, net sales rose 2.3% to $2.36 billion, but comparable store sales fell 0.6%. The company reported a net loss of $174.7 million ($1.77 per diluted share), driven by a $158 million goodwill impairment charge and $23.6 million in restructuring charges. Adjusted net income was $24.9 million ($0.25 per diluted share), down from $0.36 last year. Adjusted EBITDA was $108.8 million, or 4.6% of net sales.
Added in current filing · view on EDGAR → · paraphrased
Net sales $4.70 to $4.72 billion. Comparable store sales increase / decrease "-0.5% to 0.0%". Gross margin 29.8%-30.0%. Adjusted EBITDA $225 million to $235 million. Diluted adjusted earnings per share $0.51 to $0.55. Capital expenditures (net of tenant improvement allowances) $170 million.
Grocery Outlet raised its fiscal 2026 guidance: net sales now expected at $4.70 to $4.72 billion (from $4.60 to $4.72 billion), comparable store sales at -0.5% to 0.0% (from -2.0% to 0.0%), gross margin at 29.8% to 30.0% (from 29.7% to 30.0%), adjusted EBITDA at $225 million to $235 million (from $220 million to $235 million), and diluted adjusted EPS at $0.51 to $0.55 (from $0.45 to $0.55). The company maintained its net new store openings guidance at 30 to 33 stores and capital expenditures at $170 million.
Added in current filing · view on EDGAR →
Net cash provided by operating activities during the second quarter of fiscal 2026 was $43.2 million compared with $73.6 million for the second quarter last year. The decrease in operating cash flow was driven primarily by lower accrued and other liabilities due primarily to timing, lower operating lease liabilities as a result of the Optimization Plan, and a lower net income in the current quarter, after adjusting for non-cash charges. ... Capital expenditures for the second quarter of fiscal 2026, before tenant improvement allowances, were $43.7 million, a decrease of $21.5 million from the second quarter of fiscal 2025 due to fewer new store openings and prior year investments in new warehouses. Capital expenditures, net of tenant improvement allowances, for the second quarter this year, were $38.7 million compared with $58.3 million for the same period last year.
Operating cash flow in Q2 fiscal 2026 declined to $43.2 million from $73.6 million in Q2 fiscal 2025, driven by timing of liabilities, lower operating lease liabilities from the Optimization Plan, and lower net income. Capital expenditures (net of tenant improvement allowances) fell to $38.7 million from $58.3 million, reflecting fewer new store openings and prior-year warehouse investments.
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Figures/quotes linked to EDGAR · Narrative written by AI · Aug 13, 2026 · How we verify