Discount grocery store chain Grocery Outlet (NASDAQ:GO) will be reporting results tomorrow after the bell. Here’s what you need to know.

Grocery Outlet beat analysts’ revenue expectations by 2.4% last quarter, reporting revenues of $1.13 billion, up 11.7% year on year. It was a very strong quarter for the company, with an impressive beat of analysts’ EBITDA and earnings estimates.

Is Grocery Outlet a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Grocery Outlet’s revenue to grow 10.1% year on year to $1.11 billion, in line with the 9.3% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.27 per share.

Heading into earnings, analysts covering the company have grown increasingly bullish with revenue estimates seeing 5 upward revisions over the last 30 days (we track 10 analysts). Grocery Outlet has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 2% on average.

Looking at Grocery Outlet’s peers in the non-discretionary retail segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Sprouts delivered year-on-year revenue growth of 13.6%, beating analysts’ expectations by 3.7%, and Costco reported flat revenue, in line with consensus estimates. Sprouts traded up 8% following the results while Costco was down 1.8%.

Read our full analysis of Sprouts’s results here and Costco’s results here.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 thanks to cooling inflation. 2024 has been a different story as mixed signals have led to market volatility, and while some of the non-discretionary retail stocks have fared somewhat better, they have not been spared, with share prices down 2.3% on average over the last month. Grocery Outlet is down 6.9% during the same time and is heading into earnings with an average analyst price target of $19.86 (compared to the current share price of $15.07).

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