Grocery Outlet Cycles 2020 Pandemic Sales
Opening 11 new stores failed to bring Grocery Outlet revenue or comps back to positive in the second quarter.
For the quarter ended July 3, net sales declined 3.5% to $ 775.5 million at Grocery Outlet. Comparable store sales were down 10% compared to a 16.7% increase in the same period last year, when sales related to the pandemic were very strong.
Net income declined 33% to $ 19.6 million, or 20 cents per diluted share. Adjusted net income fell 27.1% to $ 23.3 million, or 23 cents per adjusted diluted share.
“With the support of our independent operators, we have continued to deliver exceptional value and a Wow! Shopping experience! to our customers throughout our second quarter, ”said Eric Lindberg, CEO of Grocery Outlet. “As we celebrate last year’s strong performance, our second quarter financial results have lived up to our expectations. As we continue to navigate changing consumer behaviors, we remain satisfied with the health of the opportunistic offering, our product mix, and our strong engagement with customers and independent operators. We are also exploring new ways to expand our share of the portfolio and expand our customer base. As such, we remain confident that we are well positioned to generate long-term profitable growth for our shareholders while continuing to invest in our business and build on our unique strengths. “
The company continues to expect to open between 36 and 38 stores in fiscal 2021 with one closure. Comparable store sales since the beginning of the quarter for the third quarter of fiscal 2021 are negative by 6%. Based on current trends, the company expects same-store sales for the full third quarter of fiscal 2021 to be in the negative single-digit average. Capital expenditures, net of leasehold improvement allowances, are estimated to be approximately $ 130.0 million for fiscal 2021.
The company opened 11 new stores in the second quarter, ending the period with 400 stores in six states.
Total debt was $ 450.3 million at the end of the second quarter of fiscal 2021, net of unamortized debt discounts and debt issuance costs. Free cash flow from operating activities during the second quarter of fiscal 2021 was $ 58.7 million.
Capital expenditures for the second quarter of fiscal 2021, excluding the impact of leasehold improvement allowances, were $ 29.9 million.
Grocery Outlet recently appointed Arvind Bhatia as the new Vice President of Investor Relations. Bhatia will be responsible for managing all aspects of the company’s investor relations activities and will report to Charles Bracher, Chief Financial Officer. Prior to joining Grocery Outlet, Bhatia held similar positions at At Home Group Inc. and Dave & Buster’s Entertainment, Inc. after working as a research analyst for various Wall Street companies.
Based in Emeryville, California, Grocery Outlet has more than 300 stores in California, Washington, Oregon, Pennsylvania, Idaho and Nevada. The company is # 69 on the PG 100, Progressive Grocer’s 2021 list of the best food and consumables retailers in North America.