GO Stock Collapses 27.9% After Missing Financial Targets
Grocery Outlet's stock price collapsed 27.9% on March 5, 2026, closing at $6.34 per share after the company failed to meet its full-year 2025 financial guidance. The sharp decline was a direct response to the previous day's announcement, which revealed misses on nearly every major metric reported after the market closed.
For the full fiscal year 2025, the company reported adjusted EBITDA of $254.3 million, falling short of its minimum guidance of $258 million. Similarly, net sales of $4.69 billion missed the $4.70 billion low-end target, and diluted adjusted earnings per share came in at $0.76, below the guided $0.78.
Lawsuits Allege Rapid Expansion Artificially Inflated Growth
Following the financial disclosures, multiple law firms filed class-action lawsuits against Grocery Outlet. The suits allege that between August 5, 2025, and March 4, 2026, the company and its executives made materially misleading statements, failing to disclose that its reported growth was artificially supported by a rapid and unsustainable store expansion strategy. The legal actions give investors who incurred losses until mid-May 2026 to file as lead plaintiff.
The allegations were directly supported by the company's own admissions during its March 4 earnings call.
it's clear now that we expanded too quickly, and these closures are a direct correction.
— CEO Potter, Grocery Outlet Holding Corp.
Company Takes $110M Charge to Close 36 Stores
To address the underperformance, Grocery Outlet is implementing an 'optimization plan' that includes the closure of 36 financially underperforming locations. In connection with these closures, the company recognized a non-cash impairment charge of $110 million related to the long-lived assets of those stores.
The company anticipates further costs, estimating between $14 million and $25 million in net total restructuring charges for fiscal 2026. These charges are primarily related to lease termination fees and bad debt expenses, signaling a costly correction to its previous expansion-focused strategy.
