Grocery Outlet Holding (NASDAQ:GO) is trading up almost 2% after hours following a Q2 2020 earnings release revealing vigorous performance through June 27. Its $803.4 million in net sales left Q2 2019's results in the rearview mirror, rising 24.5% year over year. While analyst consensus expected solid revenues for the quarter, based on the company's strong growth potential, the results still outdid average expectations by approximately $22.9 million.
Adjusted earnings per share (EPS) shot past analyst predictions of $0.23 by $0.19, clocking in at $0.42 and delivering a nearly 83% positive surprise. The company's press release also highlighted several other upbeat metrics, including a 16.7% jump in comparable store sales or comps, a 34.7% rise in adjusted EBITDA, and a 189.2% surge in adjusted net income year over year.
Grocery Outlet is positioned to benefit from two different business sectors that are performing better than most during the COVID-19 pandemic -- groceries and discount retailers. The company offers up to a 70% discount on food items, potentially making it more appealing both to consumers stocking up on food and those furloughed or laid off earlier in the year.
The company says its net new store openings amounted to 15 locations during the quarter, adding that it "currently expects to open between 30 and 32 stores this year with no additional closures planned." The new openings could help it maintain sales momentum, especially if shopping trends later in the year match those in Q2 and earlier.
Chief Financial Officer Charles Bracher noted that Grocery Outlet is "not providing formal 2020 earnings guidance at this time due to the uncertainty related to COVID-19," but he also remarked that its "liquidity position is strong."