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Grocery Outlet’s 36 Store Closures Spark A New Profitability Debate!

Grocery Outlet reported first quarter 2026 results that were largely consistent with their internal guidance, revealing a mix of early progress amid ongoing operational challenges. The company posted net sales of $1.17 billion, marking a 3.6% increase driven mainly by newly opened stores, while comparable store sales declined by 1%, slightly better than the expected decline range of 1.5% to 2.5%. Traffic improved by about 2%, yet this was offset by a 3.1% decline in average transaction size, attributed to a lower mix of opportunistic branded products. Gross margin came in at 29.6%, within the outlook, but included a 50 basis point drag related to store closures. Adjusted EBITDA amounted to $43.1 million, aligning with the top of the company’s guidance range, while adjusted diluted EPS was $0.05, modestly surpassing expectations by $0.01 per share. Reported net loss was significantly impacted by $18.