Grocery Outlet Holding Corp.’s financial results again exceeded expectations for its first quarter, proving the bargain market’s offerings are sticking as shoppers continue to feel the strain of higher food prices.
For the quarter ended April 1, net sales increased by 16.1% to $965.5 million, Emeryville, California-based Grocery Outlet reported after Tuesday’s market close.
Comparable-store sales jumped 12.1% in the first quarter, driven by a 7.9% increase in the number of transactions combined with a 3.9% increase in average transaction size. Net income increased 18.5% to $13.7 million, or $0.14 per diluted share.
"Our first-quarter performance exceeded expectations driven by strong same store sales results, gross margin expansion and bottom-line leverage,” said RJ Sheedy, president and CEO of Grocery Outlet, in a statement.
“We are encouraged by the growth in transactions as we are attracting new customers and our existing customers are shopping with us more often. We are delivering on our mission of 'Touching Lives for the Better' and we continue to execute our strategic growth initiatives to maximize long-term shareholder value," Sheedy said.
Grocery Outlet, which touts big discounts on brand-name products, reported adjusted EBITDA increased by 36.9% to $63.1 million. Adjusted net income also jumped by 40.7% to $27.0 million, or $0.27 per adjusted diluted share.
Grocery Outlet is continuing its brisk brick-and-mortar expansion during this inflationary environment. The chain reported Tuesday that it opened three new stores, ending the quarter with 444 locations in eight states. Grocery Outlet reported it is still on track to open 25 to 28 new stores this year.
The retailer also expressed optimism for its current momentum and raised its fiscal 2023 outlook for comparable store sales to 5.0% to 6.0%, from 4.5% to 5.5%.