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Category: Stock Market and Grocery Outlet (GO)
Date: 11 August 2020 Stock Price of Grocery Outlet (GO): $44.33 We take a look at the 2nd quarter earnings report of their 2020 fiscal year of Grocery Outlet Bargain Market (GO), a general retailer with over 350 stores whose second quarter 2020 sales came in at $803.4 million and they recorded a profit of $29.3 million for the quarter.
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We are very pleased with our strong operational execution in the second quarter. Our financial results reflect incredible teamwork across the organization including our independent operators, distribution center teams, and our corporate staff. -Eric Lindberg, CEO of Grocery Outlet"
About Grocery Outlet Bargain Market
Based in Emeryville, California, Grocery Outlet is a high-growth, extreme value retailer of quality, name-brand consumables and fresh products sold through a network of independently operated stores. Grocery Outlet has more than 350 stores in California, Washington, Oregon, Pennsylvania, Idaho and Nevada
Overview of Grocery Outlet's 2nd quarter 2020 earnings report
The data below refers to the latest quarter's data unless specified otherwise:
- Net Sales: $803.429 million (up from $645.289billion for the same quarter of the previous year)
- Net Sales increased by 24.9% over the last 12 months
- Total cruise operating expenses: $680.420 million (down from $1.544 billion for the same quarter of the previous year)
- Total cruise operating expenses decreased by -56.2 over the last 12 months
- Significant margin squeeze being experienced by Royal Caribbean Cruises with its costs and expenses declining far less than their revenues
- Net loss: -$1.63 billion (down from $472.8 million for the same quarter of the previous year)
- Diluted loss per share: -$7.83 (down from $2.25 profit for the same quarter of the previous year)
- Diluted number of shares outstanding: 209.385 million (down from 210.052 million for the same quarter of the previous year)
- Cash and cash equivalents: $4.146 billion
- Cash and cash equivalents per share: $19.80
- Cash and cash equivalents makes up 34.5% of the group's market capital
- Cash and cash equivalents makes up 12.4% of the group's total assets
- Accounts receivable: $205.921 million
- Accounts receivable makes up 0.6% of total assets
- Property and equipment: $25.647 billion
- Property and equipment makes up 77% of Royal Caribbean Group
- Stockholders equity in Royal Caribbean Group: $8.963 billion
- Stockholders equity per share: $42.8
- So Royal Caribbean Group is is trading at 1.31 times its stockholders equity per share which is outside the expected range of between 2 and 4 times that most firms tend to trade at
- For some perspective the average price to book value that firms in the S&P 500 trade at is 3.7 times.
Grocery Outlet's management commentary on their 2nd quarter 20202 earnings
EMERYVILLE, Calif., Aug. 10, 2020 (GLOBE NEWSWIRE) -- Grocery Outlet Holding Corp. (NASDAQ: GO) (“Grocery Outlet” or the “Company”) today announced financial results for the second quarter of fiscal 2020 ended June 27, 2020.
- Net sales increased by 24.5% to $803.4 million from $645.3 million in the second quarter of fiscal 2019; comparable store sales increased by 16.7% compared to a 5.8% increase in the same period last year.
- The Company opened 7 new stores ending the quarter with 362 stores in six states.
- Net income increased $40.0 million to $29.3 million, or $0.30 per diluted share, compared to a net loss of $10.6 million, or $(0.15) per diluted share, in the second quarter of fiscal 2019.
- As a result of the tax benefit associated with employee stock option exercises, the Company recorded a $2.2 million tax benefit resulting in an effective tax rate of (8.3)%. This stock option-related tax benefit increased net income in the quarter by $9.6 million, or $0.10 per diluted share.
- Adjusted EBITDA (1) increased 34.7% to $60.6 million compared to $45.0 million in the second quarter of fiscal 2019.
- Adjusted net income (1) increased 189.2% to $41.8 million, or $0.42 per non-GAAP diluted share, compared to $14.5 million, or $0.20 per non-GAAP diluted share, in the second quarter of fiscal 2019.
Eric Lindberg, CEO of Grocery Outlet, stated, “We are very pleased with our strong operational execution in the second quarter. Our financial results reflect incredible teamwork across the organization including our independent operators, distribution center teams, and our corporate staff. While the safety of our communities and the entire Grocery Outlet team is our number one priority, we remain committed to delivering exceptional value to our customers while continuing to extend our reach. Consistent with our approach to reinvesting in the business, we are accelerating talent and operational initiatives which we believe will drive long-term growth and shareholder value.”
Balance Sheet and Cash Flow:
Fiscal 2020 Outlook:
Charles Bracher, Chief Financial Officer commented, “Our second quarter financial performance reflects the strength of our business model and the incredible dedication of our independent operators and employees. While we are not providing formal 2020 earnings guidance at this time due to the uncertainty related to COVID-19, our liquidity position is strong and we are actively reinvesting in support of our long-term strategic objectives.”
Balance Sheet and Cash Flow:
- Cash and cash equivalents totaled $79.8 million at the end of the second quarter of fiscal 2020 compared to $18.7 million at the end of the same period in fiscal 2019.
- Total debt was $460.1 million at the end of the second quarter, compared to $475.5 million at the end of the same period in fiscal 2019. During the second quarter of fiscal 2020, the Company repaid in full the $90.0 million drawn on the revolving credit facility of its First Lien Credit Agreement.
- Capital expenditures for the second quarter of fiscal 2020, excluding the impact of landlord allowances, were $21.8 million.
Fiscal 2020 Outlook:
Charles Bracher, Chief Financial Officer commented, “Our second quarter financial performance reflects the strength of our business model and the incredible dedication of our independent operators and employees. While we are not providing formal 2020 earnings guidance at this time due to the uncertainty related to COVID-19, our liquidity position is strong and we are actively reinvesting in support of our long-term strategic objectives.”
- Grocery Outlet currently expects to open between 30 and 32 stores this year with no additional closures planned. The Company continues to build its real estate pipeline to support 10% annual unit growth.
- Quarter-to-date comparable store sales growth is tracking at approximately 10% driven by an increase in average basket size partially offset by declines in store traffic. The Company anticipates that comparable store sales growth will continue to moderate as the economy reopens.
- Excluding the impact of discrete items, the Company anticipates a normalized tax rate of 28%.
- Weighted average diluted share count is expected to be approximately 100 million shares for fiscal 2020.
Grocery Outlet Bargain Market (GO) stock price history
The image below, obtained from Google shows the stock price history of of Grocery Outlet Bargain Market (GO) since their listing in June 2019. And its been a pretty good time for Grocery Outlet stockholders since their listing. When they listed the stock was trading around $28.60 and its currently trading at $44.33. That's a return of 55% provided to Grocery Outlet stockholders since their listing.
The stock of Grocery Outlet is trading at a lot closer to its 52 week high than it is to its 52 week low, which to us is a clear indication that the short term sentiment and momentum of Grocery Outlet stock is very positive at this point in time.
The stock of Grocery Outlet is trading at a lot closer to its 52 week high than it is to its 52 week low, which to us is a clear indication that the short term sentiment and momentum of Grocery Outlet stock is very positive at this point in time.
Grocery Outlet Bargain Market (GO) vs Ollie's Bargain Outlet Holdings (OLLI)
The image below shows the stock performance of Grocery Outlet Bargain Market (GO) vs Ollie's Bargain Outlet Holdings (OLLI) over the last year.
- Royal Caribbean Group: -37.4%
- Carnival Corporation: -69.5%
Recent coverage of Grocery Outlet Bargain Market
The extract below covers the latest earnings report of Royal Caribbean Cruises as obtained from Investors.com
Grocery Outlet (GO) re-entered a buy zone after Q2 earnings easily beat views while management also backed expansion plans.
Grocery Outlet Earnings Estimates: Wall Street expected Grocery Outlet earnings per share to pop 15% to 23 cents, according to Zacks Investment Research. Revenue was seen swelling 19% to $769 million.
Same-store sales were seen rising 12.9%, according to Consensus Metrix.
Results: EPS of 42 cents on revenue of $803.4 million. Same-store sales increased 16.7%.
Outlook: So far in Q3, same-store sales growth is tracking at approximately 10%, driven by an increase in average basket size partially offset by declines in store traffic. The company open 30-32 stores this year with no further closures planned. California-based Grocery Outlet is a supermarket company that offers discount, overstocked and closeout products from name-brand and private-label suppliers.
The regional chain opened 17 stores in Q2 and closed two, resulting in 362 stores in California, Washington, Oregon, Pennsylvania, Idaho and Nevada.
Grocery Outlet Stock
Shares rose 3.8% to 45.85 late after closing down 1.5% at 44.33 on the stock market today. Grocery Outlet stock is back above a buy point of 44.79 after earlier breaking out from a cup-with-handle base, MarketSmith analysis shows. But after-hours moves don't always translate to the regular session.
Read the full article here
Grocery Outlet (GO) re-entered a buy zone after Q2 earnings easily beat views while management also backed expansion plans.
Grocery Outlet Earnings Estimates: Wall Street expected Grocery Outlet earnings per share to pop 15% to 23 cents, according to Zacks Investment Research. Revenue was seen swelling 19% to $769 million.
Same-store sales were seen rising 12.9%, according to Consensus Metrix.
Results: EPS of 42 cents on revenue of $803.4 million. Same-store sales increased 16.7%.
Outlook: So far in Q3, same-store sales growth is tracking at approximately 10%, driven by an increase in average basket size partially offset by declines in store traffic. The company open 30-32 stores this year with no further closures planned. California-based Grocery Outlet is a supermarket company that offers discount, overstocked and closeout products from name-brand and private-label suppliers.
The regional chain opened 17 stores in Q2 and closed two, resulting in 362 stores in California, Washington, Oregon, Pennsylvania, Idaho and Nevada.
Grocery Outlet Stock
Shares rose 3.8% to 45.85 late after closing down 1.5% at 44.33 on the stock market today. Grocery Outlet stock is back above a buy point of 44.79 after earlier breaking out from a cup-with-handle base, MarketSmith analysis shows. But after-hours moves don't always translate to the regular session.
Read the full article here
Grocery Outlet Bargain Outlet (GO) latest stock valuation
So what do we value Grocery Outlet at based on their 2nd quarter 2020 earnings report a? Based on the latest earnings report from Grocery Outlet our valuation model provides a target price (full value price) for Grocery Outlet stock at $36.70 a stock. We therefore believe the stock of Grocery Outlet is overvalued
We usually recommend that long term fundamental or value investors look to enter a stock at at least 10% below our target price, which in this case is $36.70. So we would suggest looking to enter into the stock of Grocery Outlet at $33 or below.
We expect the stock of Grocery Outlet to pull back from its current price to levels closer to our target price in coming weeks and months.
We usually recommend that long term fundamental or value investors look to enter a stock at at least 10% below our target price, which in this case is $36.70. So we would suggest looking to enter into the stock of Grocery Outlet at $33 or below.
We expect the stock of Grocery Outlet to pull back from its current price to levels closer to our target price in coming weeks and months.
Next earnings release of Grocery Outlet Bargain Market
It is expected that Grocery Outlet will release their 3rd quarter 2020 earnings report in early November 2020