Grocery Outlet (GO) Q2 2025 earnings summary

Executive summary

• Net sales rose 4.5% year-over-year to $1.18 billion in Q2, with comparable store sales up 1.1% driven by higher transaction counts but offset by a slight decrease in average transaction size.

• 11 new stores opened and 2 closed, ending Q2 with 552 stores across 16 states; comparable sales now include United Grocery Outlet stores acquired in April 2024.

• Gross margin for Q2 was 30.6%, down 30 bps year-over-year due to pricing adjustments, but up 20 bps sequentially from Q1, supported by improved inventory management.

• Operating income was $12.8 million, including $11.2 million in restructuring charges; net income was $5.0 million ($0.05 per share), down from $14.0 million last year.

• Adjusted net income for Q2 was $22.8 million ($0.23 per share), and adjusted EBITDA was $67.7 million (5.7% of net sales), nearly flat year-over-year.

Financial highlights

• Net sales: $1.18 billion for Q2 2025, up from $1.13 billion in Q2 2024; $2.31 billion for the first half of 2025, up 6.5% year-over-year.

• Gross profit: $360.7 million for Q2 2025, up 3.3% year-over-year; gross margin at 30.6%.

• SG&A expenses: $336.8 million, up 4.2% year-over-year, representing 28.5% of net sales, with a 10 bps decline as a percentage of sales.

• Net income: $5.0 million for Q2 2025, down 64.6% year-over-year; adjusted net income: $22.8 million ($0.23 per share).

• Adjusted EBITDA: $67.7 million for Q2 2025 (5.7% margin), nearly flat year-over-year but up 110 bps sequentially.

• Net cash from operations for H1 2025 was $132.6 million, up 168% year-over-year.

Outlook and guidance

• Fiscal 2025 guidance maintained for net sales ($4.7–$4.8 billion), comparable store sales growth (1.0–2.0%), gross margin (30.0–30.5%), adjusted EBITDA ($260–$270 million), and net new store openings (33–35).

• Diluted adjusted EPS guidance raised to $0.75–$0.80 (from $0.70–$0.75) due to lower interest expense.

• Q3 guidance: comp sales 1.5–2%, nine net new stores, gross margin 30–30.5%, adjusted EBITDA $63–67 million, adjusted EPS $0.17–0.19.

• Capital expenditures for fiscal 2025 expected to be approximately $210 million, net of tenant improvement allowances.

• Restructuring plan actions substantially completed in Q2 2025; total estimated restructuring costs of $63 million, with $39 million expected as cash expenditures.