What were Grocery Outlet's (NASDAQ:GO) net earnings for Q1 2026?

Grocery Outlet reported a first-quarter net loss of $180.3 million, or $1.83 per diluted share, compared to a net loss of $23.3 million in the same period last year. This significant loss was mainly driven by a $158 million non-cash goodwill impairment and restructuring charges.

How did Grocery Outlet’s net sales perform in Q1 2026?

Net sales for Q1 2026 grew by 3.6% to $1.17 billion, slightly exceeding analyst expectations. Despite the growth, the company faced challenges in other areas, such as comparable-store sales and gross margins.

How did comparable-store sales perform in Q1 2026?

Comparable-store sales for Grocery Outlet slipped by 1% in Q1 2026. This decline in same-store sales is a key indicator of retail health and reflects some challenges faced by the company.

What was the impact of store closures on Grocery Outlet's margins?

Grocery Outlet’s gross margin fell by 80 basis points to 29.6% in Q1 2026. The margin compression was mainly attributed to inventory markdowns and write-offs as the company began liquidating products from 36 underperforming stores slated for closure.

What is the long-term impact of the store closures on Grocery Outlet?

While the closures of underperforming stores will weigh on top-line growth in the short term, Grocery Outlet management expects that shedding unprofitable locations will stabilize margins by 2027, positioning the company for improved profitability in the long run.

Grocery Outlet announces $180M loss amid aggressive store optimization

Written by Liezl GambePublished May. 13 2026Last Updated May. 13 2026

Grocery Outlet (NASDAQ:GO) reported a first-quarter net loss of $180.3 million, or $1.83 per diluted share, compared with a net loss of $23.3 million in the same period last year.

The quarter’s results were primarily impacted by a $158 million non-cash goodwill impairment and $18.2 million in restructuring charges related to the company’s pivot toward a leaner retail footprint.

Net sales grew 3.6% to $1.17 billion, slightly exceeding analyst expectations.

However, comparable-store sales—a key metric for retail health—slipped by 1%.

Gross margin also faced pressure, falling 80 basis points to 29.6%.

Management attributed the margin compression to inventory markdowns and write-offs as the company begins liquidating products at 36 underperforming stores slated for closure.

While the closures will weigh on top-line growth in the short term, the company reaffirmed its full-year 2026 guidance, betting that shedding unprofitable locations will stabilize margins by 2027.

Adjusted net income, which strips out the impairment and restructuring costs, stood at $4.6 million for the quarter.