NEW YORK, May 24, 2026, 13:02 EDT
- Grocery Outlet jumped roughly 8.4% for the week, ending at $8.02 after a strong Tuesday rally.
- Nasdaq stays closed Monday for Memorial Day. Regular session trading picks up again on Tuesday.
- Investors watch traffic growth but see weak basket size, margin pressure, and store closures.
Grocery Outlet Holding Corp. finished last week up 8.4%, closing at $8.02 on Friday, after a rough stretch that saw a 6.98% rally Tuesday followed by smaller moves. The shares posted a partial comeback but are still far from their 52-week high of $19.41. The company goes into a U.S. market holiday Monday with some ground regained.
Trade resumes Tuesday for Grocery Outlet shares, with Nasdaq shut for Memorial Day on May 25 and the weekend before. Nasdaq’s regular cash-equity hours stay 9:30 a.m. to 4:00 p.m. Eastern.
Grocery Outlet (GO) shares are still stuck near the lows after a tough few months. The discount grocer out of Emeryville, California reported on May 13 that net sales for the first quarter rose 3.6% to $1.17 billion. But same-store sales slipped 1.0%. Gross margin narrowed to 29.6%, dropping by 80 basis points.
Grocery Outlet’s fix-it plan is in focus this week. The company closed 27 stores in the first quarter and then shut another nine, all part of its optimization plan. Despite the closures, Grocery Outlet stuck with its 2026 targets for net sales of $4.60 billion to $4.72 billion and adjusted earnings per share of 45 cents to 55 cents. The adjusted figure takes out certain special charges and is commonly followed by investors but isn’t a standard GAAP number.
Grocery Outlet CEO Jason Potter told analysts the company isn’t happy with its performance right now, even though traffic picked up as the quarter went on. CFO Christopher Miller said they “fully expect” gross margin to recover once promotional spending drops and the mix of discounted, opportunistic product gets better. Investing
The bounce hasn’t answered the big question. Analysts asked management why higher traffic hasn’t led to bigger basket size, or more spending per trip. Joe Feldman at Telsey Advisory Group wanted to know why more shoppers didn’t mean higher ticket. Potter replied, “converting those trials into loyalty takes time.” Investing
Competition is still tough. Walmart said higher fuel bills are pushing shoppers to hunt for cheap groceries and staples, while Kroger plans discounts on thousands of products as its new CEO tries to bring back customers. That puts more stress on Grocery Outlet’s pitch that its business can attract value shoppers without big margin hits.
USDA’s May food-price forecast puts all food prices up 3.4% in 2026, with food-at-home up 3.2%, so shoppers could move to discounters. Grocers will also have a harder time with sourcing and pricing as costs go higher.
No big rally forecast for Grocery Outlet. TradingView, using FactSet data, said 13 analysts have an average 12-month price target of $8.46 on Grocery Outlet while 14 analysts rate the stock at Hold. That’s just a bit above where shares finished Friday.
But the worry is that the latest bounce is more about technicals than real improvement. If traffic doesn’t hold up, or shoppers keep cutting how much they buy each trip, or promotions keep running longer than planned, then margin gains may take longer. Closing stores cuts out weaker spots, but it also shows the retailer is being pickier with growth strategy instead of pushing harder.
