Grocery Outlet (GO) Q2 2026 Earnings Call Transcript

On the Grocery Outlet's Q2 2026 earnings call, Senior Vice President of Strategic Finance and Investor Relations Dorian Bertsch welcomed listeners to the presentation of the company's financial results. He introduced Chief Executive Officer Jason Potter and Chief Financial Officer Ian D. Ferry, who would be speaking for management. The call was recorded and notes that all participants were in a listen-only mode.

Bertsch began by outlining the call's proceedings, mentioning the forward-looking statements made by the company, which are subject to risks and uncertainties. He also noted that the company would reference non-GAAP financial information and provide a reconciliation in the press release.

Potter then took the floor, praising his team's efforts to stabilize the business and drive growth. During Q2, revenue increased by 1% to $1.19 billion, with comparable store sales down 30 basis points but showing a 70 basis point improvement from Q1. Traffic grew by 1.8%, basket declined by 2.1% year-over-year but improved by approximately 100 basis points from Q1.

Gross margin exceeded expectations at 30.2% due to lower promotional spending. Adjusted EBITDA was approximately $66 million, and adjusted EPS was $0.20, both surpassing the outlook.

Potter expressed confidence in the company's ability to restore the core strengths of the Grocery Outlet model, focusing on improving comps. He highlighted the improvement in opportunistic offerings, strengthened product flow, and better execution. The impact of these actions is reflected in the significant increase in opportunistic comp store sales, lifting the total company comps into positive territory in May and June.

He also emphasized the growth in the number of opportunistic units per transaction and the improvement in the quality of the assortment.

Potter attributed these positive results primarily to the strong opportunistic offering and sharper value communication. He mentioned that the company prioritized improved sourcing, product flow, visibility, and store-level execution while expanding key supplier relationships, leading to higher opportunistic product flow and comp growth. These efforts were supported by better analytics and simpler signage, more prominent value items, and targeted at-home and digital media.

Potter concluded by introducing Paul Miller, the executive vice president and chief purchasing and merchandising officer, who returned to the company in June. Miller's experience and leadership are already making an impact in revitalizing the supplier partnerships, enhancing the treasure hunt experience, and strengthening the sourcing and merchandising capabilities.