Grocery Outlet continued to leverage its differentiated business model in the third quarter, to great success.
The company grew same-store sales 9.1% during the third quarter ended Sept. 26, thanks to "higher basket size as customers continue to consolidate their shopping trips," CEO Eric Lindberg said in an earnings call with analysts.
"Our performance reflects our commitment to providing our customers unbeatable values in a treasure hunt of ever-changing products, along with friendly customer service and a locally curated assortment provided by our independent operators," Lindberg added.
He noted that the company has "significant white space in front of it, which we believe supports over 1,500 new stores in existing states and neighboring markets." The company opened 10 new stores in Q3, ending the quarter with 372 stores in six states. It expects to open 34 new stores this year. Specifically, the retailer said that it has been laying a foundation in the Mid-Atlantic region, with plans to open approximately three to five stores there next year.
The company also said that it continues to build its real estate pipeline to support 10% annual unit growth.
During the third quarter, net sales at the company increased by 17.1% to $764.1 million, from $652.5 million in the third quarter of fiscal 2019. Net income increased 225.2% to $40.5 million, or 41 cents per diluted share, compared with net income of $12.4 million, or 13 cents per diluted share, in the third quarter of fiscal 2019.
For the 39 weeks ended Sept. 26, net sales increased by 22.3% to $2.33 billion, from $1.90 billion in the same period in fiscal 2019; same-store sales increased by 14.3% compared with a 5.3% increase in the same period last year. Net income increased $76.9 million to $82.4 million, or 84 cents per diluted share, compared with net income of $5.6 million, or 7 cents per diluted share, in the same period in 2019.
"Over seven decades, we have developed tremendous customer loyalty as we remain focused on delivering deep values and a fun treasure-hunt shopping experience for our customers. We know that our customers shop our stores in different ways and for different reasons -- some because they are on a limited budget and rely on us for our great values, and others because they just enjoy treasure-hunt experiences and are seeking great deals," Lindberg said.
Based in Emeryville, California, Grocery Outlet has more than 300 stores in California, Washington, Oregon, Pennsylvania, Idaho and Nevada. The company is No. 66 on The PG 100, Progressive Grocer’s list of the top food and consumables retailers in North America.