Grocery Outlet Holding Corp. reported financial results for the third quarter of fiscal 2026, which ended on October 3, 2026. The company announced that net sales increased by 0.9% to $1.18 billion for the quarter. Comparable store sales grew by 0.5%, driven by a 2.4% increase in the number of transactions, partially offset by a 1.9% decrease in average transaction size.
For the 39-week period ended October 3, 2026, net sales increased by 1.8% to $3.54 billion. However, comparable store sales declined by 0.2% during this timeframe.
Gross margin for the third quarter was 30.0%, a decrease of 40 basis points compared to the prior year. The company attributed this decline to product promotions, higher transportation expenses, and a reduction in consumer demand for produce due to a Cyclospora outbreak. In contrast, gross margin for the 39-week period was 29.9%, a decrease of 60 basis points.
Operating income for the third quarter was $24.0 million, which included $3.6 million in net restructuring credits. For the 39-week period, the company reported an operating loss of $138.2 million, which included a $158.0 million non-cash goodwill impairment charge and $20.1 million in net restructuring charges.
Net income for the third quarter was $13.3 million, or $0.13 per diluted share, compared to $11.6 million, or $0.12 per diluted share in the prior year. Adjusted net income was $15.6 million, or $0.16 diluted adjusted earnings per share, compared to $20.7 million, or $0.21 diluted adjusted earnings per share last year.
Grocery Outlet also provided updated guidance for fiscal 2026. The company revised its expected adjusted EBITDA range to $225 million to $229 million, down from the previous range of $225 million to $235 million. The company expects diluted adjusted earnings per share to be between $0.52 and $0.55.
The company continues to execute an Optimization Plan, which involves closing financially underperforming stores. As of the end of the third quarter, Grocery Outlet operated 561 stores across 16 states. The company estimates total net restructuring charges under the Optimization Plan to be between $22 million and $29 million.
