The opening of 11 new stores couldn't bring Grocery Outlet's revenue or comps into the positive during the second quarter.
For the quarter ended July 3, net sales decreased by 3.5% to $775.5 million at Grocery Outlet. Same-store sales decreased by 10% compared to a 16.7% increase in the same period last year when pandemic sales were very strong.
Net income decreased 33% to $19.6 million, or 20 cents per diluted share. Adjusted net income decreased 27.1% to $23.3 million, or 23 cents per adjusted diluted share.
"With the support of our independent operators, we continued to deliver outstanding value and a Wow! shopping experience to our customers throughout our second quarter," said Eric Lindberg, CEO of Grocery Outlet. "As we anniversary last year's strong performance, our second quarter financial results were at the high end of our expectations. While we continue to navigate changing consumer behaviors, we remain pleased with the health of opportunistic supply, our product assortment, and our strong engagement with customers and independent operators alike. We are also exploring new ways to expand our share of wallet and broaden our customer base. As such, we remain confident that we are well positioned to drive long term profitable growth for our shareholders as we continue to invest in our business and build on our unique strengths."
The company continues to expect to open between 36 and 38 stores in fiscal 2021 with one closure. Quarter-to-date same-store sales for the third quarter of fiscal 2021 are negative 6%. Based on current trends, the company expects same-store sales for the full third quarter of fiscal 2021 to be in the negative mid-single digits. Capital expenditures, net of tenant improvement allowances, are estimated to be approximately $130.0 million for fiscal 2021.
The company opened 11 new stores in second quarter, ending the period with 400 stores in six states.
Total debt was $450.3 million at the end of the second quarter of fiscal 2021, net of unamortized debt discounts and debt issuance costs. Net cash provided by operating activities during the second quarter of fiscal 2021 was $58.7 million.
Capital expenditures for the second quarter of fiscal 2021, excluding the impact of tenant improvement allowances, were $29.9 million.
Grocery Outlet recently named Arvind Bhatia as its new VP of investor relations. Bhatia will be responsible for managing all aspects of the company’s investor relations activities and will report to Charles Bracher, CFO. Prior to joining Grocery Outlet, Bhatia held similar roles at At Home Group Inc. and Dave & Buster’s Entertainment, Inc. after working as a research analyst for various Wall Street firms.
Based in Emeryville, California, Grocery Outlet has more than 300 stores in California, Washington, Oregon, Pennsylvania, Idaho and Nevada. The company is No. 69 on The PG 100, Progressive Grocer’s 2021 list of the top food and consumables retailers in North America.