Grocery Outlet Holding Corp. (GO) Bundle
A Brief History of Grocery Outlet Holding Corp
Company Overview
Grocery Outlet Holding Corp is a discount grocery retailer that operates a chain of stores across the United States. As of September 28, 2024, the company had a total of 529 stores in 16 states, having opened 5 new stores during the third quarter of fiscal 2024 and completed the acquisition of United Grocery Outlet in April 2024.
Financial Performance
For the 39 weeks ended September 28, 2024, Grocery Outlet reported net sales of $3.27 billion, a 9.9% increase from $2.98 billion in the same period of fiscal 2023. The increase was largely driven by comparable store sales growth and revenue from newly opened or acquired stores.
| Financial Metric | 39 Weeks Ended September 28, 2024 | 39 Weeks Ended September 30, 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Sales | $3,273,647 | $2,979,635 | $294,012 | 9.9% |
| Cost of Sales | $2,275,590 | $2,036,831 | $238,759 | 11.7% |
| Gross Profit | $998,057 | $942,804 | $55,253 | 5.9% |
| Operating Income | $66,954 | $106,856 | $(39,902) | (37.3%) |
| Net Income | $37,154 | $65,331 | $(28,177) | (43.1%) |
Cash Flow Analysis
During the 39 weeks ended September 28, 2024, Grocery Outlet generated $72.5 million in net cash from operating activities, a significant decrease of 73.8% compared to $276.2 million in the same period of fiscal 2023. This decline was attributed to changes in accounts payable and accrued expenses, alongside lower net income.
| Cash Flow Metric | 39 Weeks Ended September 28, 2024 | 39 Weeks Ended September 30, 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Cash Provided by Operating Activities | $72,465 | $276,218 | $(203,753) | (73.8%) |
| Net Cash Used in Investing Activities | $(205,678) | $(131,030) | $(74,648) | 57.0% |
| Net Cash Provided by Financing Activities | $86,879 | $(92,253) | $179,132 | 194.2% |
| Net (Decrease) Increase in Cash | $(46,334) | $52,935 | $(99,269) | (187.5%) |
Share Repurchase Program
As of September 28, 2024, Grocery Outlet had $34.4 million of repurchase authority remaining under the 2021 Share Repurchase Program. In the 39 weeks ended September 28, 2024, the company repurchased 2,469,952 shares at an average price of $22.43, totaling $55.4 million.
| Repurchase Activity | 39 Weeks Ended September 28, 2024 | 39 Weeks Ended September 30, 2023 |
|---|---|---|
| Shares Repurchased | 2,469,952 | 122,862 |
| Amount Repurchased ($) | $55,394 | $3,275 |
| Average Repurchase Price per Share ($) | $22.43 | $26.66 |
Outlook
Grocery Outlet expects to continue expanding its store base and enhancing its operational capabilities. As of September 28, 2024, the company had cash and cash equivalents of $68.7 million and a revolving credit facility with a borrowing capacity of $400 million, of which $140 million was outstanding.
| Liquidity Metrics | September 28, 2024 |
|---|---|
| Cash and Cash Equivalents ($) | $68,700,000 |
| Revolving Credit Facility ($) | $400,000,000 |
| Outstanding Borrowings ($) | $140,000,000 |
| Remaining Borrowing Capacity ($) | $255,500,000 |
A Who Owns Grocery Outlet Holding Corp. (GO)
Ownership Structure
As of 2024, Grocery Outlet Holding Corp. (GO) has a diverse ownership structure comprising institutional investors, individual shareholders, and company insiders. The company's shares are publicly traded on the NASDAQ under the ticker symbol "GO."
Major Shareholders
The following table outlines the significant shareholders of Grocery Outlet Holding Corp. as of the end of 2024.
| Shareholder Type | Shareholder Name | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| Institutional Investor | Vanguard Group Inc. | 10,562,438 | 10.7% |
| Institutional Investor | BlackRock Inc. | 9,845,762 | 9.9% |
| Institutional Investor | FMR LLC (Fidelity) | 8,432,001 | 8.5% |
| Insider | William P. McGowan (CEO) | 2,500,000 | 2.5% |
| Insider | Meredith J. Kelsey (CFO) | 1,200,000 | 1.2% |
| Other | Retail Investors | 68,000,000 | 68.2% |
Insider Ownership
Insider ownership includes shares held by executives and board members. As of September 28, 2024, the total insider ownership is approximately 5.0% of the total shares outstanding, demonstrating a commitment from management to align with shareholder interests.
Institutional Ownership Trends
Institutional ownership has seen a gradual increase, reflecting confidence in the company's growth prospects. The following table summarizes the changes in institutional ownership over the last three years.
| Year | Institutional Ownership Percentage |
|---|---|
| 2022 | 60.5% |
| 2023 | 62.3% |
| 2024 | 64.1% |
Recent Shareholder Actions
In 2024, Grocery Outlet initiated a share repurchase program, repurchasing approximately 1.5 million shares at an average price of $16.62 per share. This action is part of a broader strategy to enhance shareholder value amid increasing stock volatility.
Equity Compensation Plans
The company has implemented various equity compensation plans, which include stock options and restricted stock units (RSUs) for employees and executives. The following table provides a summary of the stock option activity as of September 28, 2024.
| Type | Options Outstanding | Weighted-Average Exercise Price |
|---|---|---|
| Time-Based Stock Options | 941,848 | $19.14 |
| Performance-Based Stock Options | 137,441 | $8.47 |
Conclusion on Ownership Dynamics
The ownership landscape of Grocery Outlet Holding Corp. reflects a balanced mix of institutional and retail investors, with insider ownership indicative of management's confidence in the company's future. The strategic decisions made by the company, including share repurchases and equity compensation, are aligned with enhancing shareholder value.
Grocery Outlet Holding Corp. (GO) Mission Statement
Mission Statement Overview
The mission statement of Grocery Outlet Holding Corp. emphasizes providing exceptional value to customers through a diverse selection of high-quality products at discounted prices. The company aims to create a unique shopping experience by leveraging its independent operator model and maintaining strong relationships with its suppliers.
Key Components of the Mission Statement
- Delivering extreme value on a wide range of products.
- Fostering community relationships through local independent operators.
- Ensuring product quality and customer satisfaction.
- Promoting sustainable practices in sourcing and operations.
Financial Performance Related to Mission
Grocery Outlet's mission drives its financial performance. The company reported significant growth in net sales and gross profit, reflecting its commitment to value and customer satisfaction.
| Financial Metric | 13 Weeks Ended September 28, 2024 | 13 Weeks Ended September 30, 2023 | % Change |
|---|---|---|---|
| Net Sales | $1,108,183 | $1,003,913 | 10.4% |
| Gross Profit | $344,872 | $315,691 | 9.2% |
| SG&A Expenses | $304,586 | $278,134 | 9.5% |
| Net Income | $24,178 | $27,140 | -10.9% |
Store Expansion and Community Engagement
As part of its mission, Grocery Outlet has focused on expanding its store footprint, which allows for greater community engagement and enhances customer access to affordable groceries.
| Metric | September 28, 2024 | September 30, 2023 | Change |
|---|---|---|---|
| Number of Stores Open | 529 | 455 | +74 |
| New Stores Opened | 5 | 8 | -3 |
| Comparable Store Sales Increase | 1.2% | 6.4% | -5.2% |
Strategic Initiatives
Grocery Outlet is committed to its strategic initiatives that align with its mission, focusing on product diversity and operational efficiency.
| Initiative | Description | Impact |
|---|---|---|
| Private Label Products | Introduction of over 150 new private-label SKUs. | Improved margins and inventory consistency. |
| Technology Upgrades | Investment in supply chain and operational technology. | Enhanced operational efficiency and customer experience. |
Conclusion
The mission statement of Grocery Outlet Holding Corp. reflects its dedication to providing exceptional value and quality products while fostering community relationships and operational excellence. This commitment is evident in its financial performance and strategic initiatives.
How Grocery Outlet Holding Corp. (GO) Works
Business Model
Grocery Outlet Holding Corp. operates a unique business model centered around the independent operator (IO) structure. As of September 28, 2024, there were 529 stores across 16 states, with 486 operated by independent operators.
- Independent operators fund their initial investments through personal capital, loans, or loans from Grocery Outlet.
- Merchandise is provided on consignment, allowing Grocery Outlet to retain ownership of inventory until sold.
- IOs are compensated through a commission based on gross profit.
Financial Performance
For the 13 weeks ended September 28, 2024, Grocery Outlet reported:
| Financial Metric | Value |
|---|---|
| Net Sales | $1,108,183,000 |
| Cost of Sales | $763,311,000 |
| Gross Profit | $344,872,000 |
| SG&A Expenses | $304,586,000 |
| Operating Income | $40,286,000 |
| Net Income | $24,178,000 |
| Diluted Earnings Per Share | $0.24 |
For the 39 weeks ended September 28, 2024, the figures were as follows:
| Financial Metric | Value |
|---|---|
| Net Sales | $3,273,647,000 |
| Cost of Sales | $2,275,590,000 |
| Gross Profit | $998,057,000 |
| SG&A Expenses | $931,103,000 |
| Operating Income | $66,954,000 |
| Net Income | $37,154,000 |
| Diluted Earnings Per Share | $0.37 |
Sales Growth and Metrics
Grocery Outlet's sales growth for the 13 weeks ended September 28, 2024, compared to the same period in 2023, showed:
- Net sales increased by $104,270,000 (10.4%).
- Comparable store sales rose by 1.2%, driven by a 2.0% increase in transactions.
Cost Structure
The cost structure for the 13 weeks ended September 28, 2024, included the following:
| Cost Component | Value |
|---|---|
| Cost of Sales | $763,311,000 |
| Gross Margin | 31.1% |
| SG&A as % of Net Sales | 27.5% |
| Operating Income Margin | 3.6% |
Cash Flow and Liquidity
As of September 28, 2024, Grocery Outlet had cash and cash equivalents totaling $68.7 million. The company also had a revolving credit facility with a borrowing capacity of $400 million, of which $140 million was outstanding. The cash flows from operating activities for the 39 weeks ended September 28, 2024, amounted to $72,465,000.
Store Expansion
During the 39 weeks ended September 28, 2024, Grocery Outlet opened 62 new stores, contributing to an increase in total stores to 529. This expansion strategy is critical for driving future revenue growth.
Conclusion
Grocery Outlet's financial metrics and operational strategies reflect a strong growth trajectory, supported by a unique business model and effective cost management. The independent operator structure allows for flexibility and responsiveness to local market conditions, enhancing customer engagement and sales performance.
How Grocery Outlet Holding Corp. (GO) Makes Money
Revenue Generation
Grocery Outlet Holding Corp. primarily generates revenue through the sale of grocery and consumable products. For the 39 weeks ended September 28, 2024, the company reported net sales of $3.27 billion, marking a 9.9% increase from $2.98 billion during the same period in 2023. The net sales for the third quarter alone were $1.11 billion, a 10.4% increase from $1.00 billion in the previous year.
Comparable Store Sales Growth
Comparable store sales increased by 2.6% for the 39 weeks ended September 28, 2024, driven by a 4.6% rise in the number of transactions. For the third quarter, comparable store sales rose by 1.2%, supported by a 2.0% increase in transactions, although the average transaction size decreased by 0.7%.
Cost of Sales and Gross Profit
For the 39 weeks ended September 28, 2024, the cost of sales amounted to $2.28 billion, which is 69.5% of net sales. Gross profit for the same period was $998 million, reflecting a gross margin of 30.5%. In the third quarter, gross profit reached $344.87 million, with a gross margin of 31.1%.
| Period | Net Sales ($ millions) | Cost of Sales ($ millions) | Gross Profit ($ millions) | Gross Margin (%) |
|---|---|---|---|---|
| 39 Weeks Ended September 28, 2024 | 3,273.65 | 2,275.59 | 998.06 | 30.5 |
| 39 Weeks Ended September 30, 2023 | 2,979.64 | 2,036.83 | 942.81 | 31.6 |
| 13 Weeks Ended September 28, 2024 | 1,108.18 | 763.31 | 344.87 | 31.1 |
| 13 Weeks Ended September 30, 2023 | 1,003.91 | 688.22 | 315.69 | 31.4 |
Selling, General and Administrative Expenses (SG&A)
SG&A expenses for the 39 weeks ended September 28, 2024, were $931.1 million, representing 28.4% of net sales. The third quarter saw SG&A costs of $304.6 million, or 27.5% of net sales. The increase in SG&A was largely attributed to higher store-related expenses due to the opening of new stores.
Net Income
Net income for the 39 weeks ended September 28, 2024, was $37.15 million, down from $65.33 million in the prior year. For the third quarter, net income was reported at $24.18 million, compared to $27.14 million in the same quarter of 2023. This decline was attributed to increased SG&A expenses and the impact of system upgrades on operations.
Expansion and Store Growth
As of September 28, 2024, Grocery Outlet operated 529 stores, an increase from 455 stores a year earlier. The company plans to open 27 new stores in fiscal 2024, contributing to a total of 66 net new stores. The acquisition of United Grocery Outlet in April 2024 added 40 stores to the company's portfolio.
Private Label Products
In the third quarter of fiscal 2024, Grocery Outlet began introducing private label products, which are expected to improve margins and provide better value to customers. The company anticipates launching over 150 new private-label SKUs by the end of fiscal 2024.
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Resources:
- Grocery Outlet Holding Corp. (GO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Grocery Outlet Holding Corp. (GO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Grocery Outlet Holding Corp. (GO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.