Why Grocery Outlet Stock Dived by 33% This Week

By Eric Volkman – Mar 6, 2026 at 6:14PM ESTKey PointsAlthough some fourth-quarter fundamentals improved, the retailer's comparable sales sagged.It also missed the consensus analyst profitability estimate.The latest earnings report from discount food retailer Grocery Outlet (GO +3.63%) certainly didn't leave a good taste in many investor mouths. This was compounded by several analyst recommendation downgrades and price target cuts. According to data compiled by S&P Global Market Intelligence, the company's shares lost more than 33% of their value over the week. A slide in "comps" Grocery Outlet's net sales for its fourth quarter of 2025 were $1.22 billion, a year-over-year improvement of almost $11%. Yet the retailer's comparable sales saw a decline, dipping by almost 1% from the fourth quarter 2024 figure. Image source: Getty Images. On the bottom line, net income not in accordance with generally accepted accounting principles (GAAP) rose by 29% to $18.7 million, or $0.19 per share. Although net sales essentially met the consensus analyst estimate, Grocery Outlet missed on profitability, as pundits tracking the stock had modeled a non-GAAP (adjusted) net income figure of $0.21 per share. In its earnings release, the company said its performance was affected by delays in federal food benefits and strengthening competition, among other factors. It said it was launching a "business optimization plan," which includes the closure of 36 stores. ExpandNASDAQ: GOGrocery OutletToday's Change(3.63%) $0.23Current Price$6.57Key Data PointsMarket Cap$622MDay's Range$6.32 - $6.6452wk Range$6.20 - $19.41Volume730KAvg Vol2.7MGross Margin30.27% Weaker-than-expected guidance Grocery Outlet also proffered guidance for the entirety of 2026. Despite the closures, ultimately its store count should rise, with 30 to 33 net new openings. In terms of financials, net sales are expected to land at $4.6 billion to slightly over $4.7 billion, with adjusted earnings per share of $0.45 to $0.55. The company's "comps" are expected to range from flat to a 2% decline. Both ranges fell short of 2025's almost $4.7 billion on the top line and $0.76 per share adjusted net profit. They were also well below the consensus analyst estimates of $4.9 billion and $0.82 per share, respectively. Grocery Outlet will likely spend most of 2026 implementing what amounts to a restructuring plan, so, at best, the company's stock is a "wait and see" to me. As it looks now, its prospects aren't particularly encouraging.Read NextMar 5, 2026 •By Joe TenebrusoWhy Grocery Outlet Stock Crashed TodaySep 11, 2024 •By David Jagielski, CPA3 Stocks That Haven't Been This Cheap in More Than 5 YearsNov 9, 2022 •By James BrumleyWhy Grocery Outlet Holding Is Down More Than 10% This AfternoonJul 21, 2022 •By James BrumleyI'm Buying These 3 Resilient Stocks During a Bear MarketMay 11, 2022 •By Joe TenebrusoWhy Grocery Outlet Stock Surged TodayDec 27, 2021 •By Asit Sharma, CPAA Look Back at How 5 Stock Picks Did in 2021About the AuthorEric Volkman is a contributing Motley Fool finance and stock market analyst. Previously, Eric was an equities analyst at European investment bank Raiffeisen Capital and Investment. He’s also been a freelance finance writer since 1995. He studied at Susquehanna University.TMFVolkmanStocks MentionedGrocery OutletNASDAQ: GO$6.57(+3.63%)+$0.23*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.