Grocery Outlet Holding Corp: More Time Needed

研报英文原文证据摘录

Grocery Outlet Holding Corp: More Time Needed

, with the - Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

3.1% decline y/y driven by units per transaction. The lack of stabilization in ticket ** = Based on consensus methodology

§ = Consensus data is provided by Refinitiv Estimates

indicates there is risk that the continued OP mix improvement may not drive a e = Morgan Stanley Research estimates

meaningful comp inflection. Quarterly EPS ($)

2026e 2026e 2027e 2027e

Quarter 2025 Prior Current Prior Current

2) The pace of store refreshes is slowing (to ~100 in '26 vs. ~150 prior), and

Q1 0.13 - 0.05a - -

management acknowledged there has been some performance variability as the Q2 0.23 0.13 0.11 - -

initiative scaled. We think it's possible some of the stores were only exhibiting a Q3 0.21 0.20 0.19 - -

Q4 0.19 0.13 0.12 - -

+LSD% comp uplift vs. the original +MSD% target, and this trend tempers the e = Morgan Stanley Research estimates, a = Actual Company reported data

potential uplift to consolidated comp growth in '26/'27.

3) Promotional intensity is stepping up with ~$20mn / ~40 bps of planned

investment in '26. While these investments have helped drive traffic and offset the

pressure from below-average opportunistic mix, there is a scenario in which this

promotional stance will need to continue in '27 if the improvement in opportunistic

mix does not ramp quickly enough or does not yield the expected top-line benefit,

adding gross margin risk.

4) The current macro backdrop makes it challenging to drive ticket growth. Low

income consumer spending and sentiment is under pressure due to higher gas prices

and inflation, and given GO over-indexes to the low income consumer vs. other