Grocery Outlet’s stock tumbled last week after the company lowered its earnings forecast due to unexpected disruptions in the implementation of new technology. The stock price fell 22% Tuesday to $20.16 by mid-morning, and ended the week at $20.89.
The discount grocer reported that net sales were up 7.4% to $1.04 billion for the first quarter of 2024, and comparable store sales increased 3.9%. However, Grocery Outlet’s gross margin dropped 180 basis points to 29.3% as a result of the technology difficulties.
Company President RJ Sheedy said 12 stores have opened so far this year, bringing the total store count to 480. In addition, the grocer is planning to release its private-label brand in the third quarter, which is expected to feature about 100 SKUs by the end of the year.
Sheedy added that Grocery Outlet is looking for “real estate opportunities” connected to store closures by 99 Cents Only, which announced in April that its was winding down operations at its 371 locations.
