As Grocery Outlet Holdings Corporation GO prepares to unveil its first-quarter fiscal 2026 earnings on May 13, after market close. Investors are eager to see if the company can beat market expectations.
The Zacks Consensus Estimate for revenues is pegged at $1.15 billion, implying 2.4% growth from the prior year. Meanwhile, the consensus mark for earnings has been steady at 2 cents per share over the past seven days, and calls for a decline of 84.6% from the year-ago period. GO has a trailing four-quarter earnings surprise of 30.5%, on average.
Grocery Outlet Holding Corp. Price, Consensus and EPS Surprise
Grocery Outlet Holding Corp. price-consensus-eps-surprise-chart | Grocery Outlet Holding Corp. Quote
Key Factors to Observe for GO's Q1 Earnings
Grocery Outlet’s first-quarter performance is likely to have benefited from continued consumer demand for value-oriented grocery offerings amid a still-cautious spending environment. Management has emphasized that customers remain highly responsive to compelling deals and branded opportunistic products, which continue to differentiate the company from traditional grocers. The retailer’s efforts to rebuild its opportunistic merchandise pipeline, improve product flow and sharpen value perception may have helped sustain customer traffic trends during the quarter.
The company’s ongoing store refresh initiatives are likely to have contributed positively to first-quarter trends. Management highlighted encouraging customer feedback and better operational execution in refreshed locations, with remodeled stores showing improved shopping experiences and stronger engagement levels. Efforts to simplify store operations, improve inventory management tools and enhance reporting capabilities for independent operators likely supported better in-store execution. These initiatives may have helped stores remain competitive while reinforcing Grocery Outlet’s treasure-hunt shopping appeal.
On the flip side, Grocery Outlet is likely to have faced pressure from a challenging consumer environment and softer basket trends during the first quarter. Management acknowledged that affordability concerns remained elevated for its core customer base, while the broader grocery landscape stayed highly promotional. We expect first-quarter comparable-store sales to decline 2.2%.
The company has been working through assortment and supply-chain challenges tied to balancing everyday in-stock levels with the opportunistic products that drive larger baskets and stronger value perception. These pressures, combined with margin investments tied to promotions and inventory-related actions associated with store optimization efforts, may have weighed on profitability during the quarter.
Grocery Outlet’s planned store closures are expected to weigh on top-line momentum, while elevated promotional spending aimed at strengthening customer traffic and value perception is likely to have pressured near-term margins. Additionally, inventory liquidation activity tied to the closure of underperforming locations is expected to have created nearly 40 basis points, or about $4 million, of gross margin pressure in the first quarter.
What the Zacks Model Says About GO’s Q1 Earnings
As investors prepare for Grocery Outlet’s first-quarter announcement, the question looms regarding earnings beat or miss. Our proven model does not conclusively predict an earnings beat for GO this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
GO has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
Casey’s General Stores, Inc. CASY currently has an Earnings ESP of +1.02% and a Zacks Rank of 2. The Zacks Consensus Estimate for fourth-quarter fiscal 2026 earnings per share is pegged at $3.44, which implies 30.8% year-over-year growth. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for quarterly revenues is pegged at $4.33 billion, implying 8.4% year-over-year growth. CASY has a trailing four-quarter earnings surprise of 20%, on average.
Costco Wholesale Corporation COST currently has an Earnings ESP of +1.20% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter fiscal 2026 earnings per share is pegged at $4.91, which implies 14.7% year-over-year growth.
The Zacks Consensus Estimate for quarterly revenues is pegged at $69.4 billion, implying a 9.7% year-over-year decline. COST has a trailing four-quarter negative earnings surprise of 1.1%, on average.
Lamb Weston Holdings, Inc. LW currently has an Earnings ESP of +3.08% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2026 earnings per share is pegged at 61 cents, implying a 29.9% year-over-year decline.
The Zacks Consensus Estimate for quarterly revenues is pegged at $1.7 billion, which indicates a decrease of 1% from the figure reported in the prior-year quarter. LW has a trailing four-quarter earnings surprise of 23.5%, on average.
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Costco Wholesale Corporation (COST): Free Stock Analysis Report
Casey's General Stores, Inc. (CASY): Free Stock Analysis Report
Grocery Outlet Holding Corp. (GO): Free Stock Analysis Report
Lamb Weston (LW): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).