Emeryville, Calif.-based Grocery Outlet, which expanded its grocery delivery in partnership with Instacart last month, said its traffic trends for the second quarter are strong as shoppers navigate inflation and higher food prices.
"Traffic trends in the second quarter are strong as we believe consumers are increasingly looking to stretch their shopping dollar in light of inflation,” Eric Lindberg, CEO of Grocery Outlet, said in a statement. “As we look across our business, we are encouraged by the health of our supply pipeline as well as the excitement and dedication of our independent operators.”
Grocery Outlet reported May 10 that first-quarter net sales totaled $831.4 million for the quarter ending April 2—up 10.5% from $752.5 million a year earlier. A destination for bargain-seeking shoppers, Grocery Outlet said that same-store sales grew 5.2% year over year and that despite a dip in net income of 38.7% to $11.6 million, or 12 cents per diluted share, the company remains positive.
"We are excited about our year-to-date performance, including better-than-expected top- and bottom-line results in the first quarter," Lindberg said. “In addition, we continue to make important investments in support of future growth which reinforces our confidence in delivering strong shareholder returns over the long term."
Grocery Outlet said during its first quarter it opened four new stores and closed one, ending the quarter with 418 stores in seven states: California, Washington, Oregon, Pennsylvania, Idaho, Nevada and New Jersey. The company reported it was on track to open 28 net new stores.
As part of its plan for 2022, Grocery Outlet announced it was raising its net sales and earnings guidance.
"Our unique business model and compelling value proposition are increasingly relevant to customers in light of the current macroeconomic environment,” Charles Bracher, CFO of Grocery Outlet, said in a statement. “Reflecting our strong first-quarter results and continued momentum, we are raising our net sales and earnings guidance for fiscal 2022. And while we continue to prioritize investments in support of future growth, we recently utilized $75 million of excess cash to opportunistically reduce leverage given rising interest rates."