Discount Retail Chain Grocery Outlet Holding Corp. is accelerating talent and operational initiatives to drive long-term growth and shareholder value after posting yet another impressive fiscal quarter.
The Merryville, Calif.-based discounter's second-quarter sales and profit decelerated from the first quarter but still benefited tremendously from coronavirus-fueled buying. For the second quarter ended June 27, net sales increased 24.5% to $803.4 million. Same-store sales increased 16.7%. Net income increased by $40 million to $29.3 million. Adjusted net income increased 189.2% to $41.8 million. And adjusted EBITDA increased 34.7% to $60.6 million.
Grocery Outlet's discounted consumables offering is poised to deliver strong financial performance as a result of the economic recession. In an earnings call with analysts, CEO Eric Lindberg said the company's approach to leveraging this opportunity will be three-pronged: advancing how the company buys to drive a leadership position in secondary markets, advancing how the company sells by attracting the best operator candidates, and continuing to scale the business to support 10% annual unit growth.
The company said quarter-to-date 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 anticipates that same-store sales growth will continue to moderate as the economy reopens.
The company opened seven new stores ending the quarter with 362 stores in six states. 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.
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 million drawn on the revolving credit facility of its First Lien Credit Agreement.
For its first quarter of fiscal 2020 ended March 18, Grocery Outlet saw dramatic sales lifts, reporting a 25.4% net sales increase to $760.3 million, from $606.3 million in the year-ago period, while same-store sales grew 17.4%, compared to a 4.2% rise last year.
Additionally, the company recently hired Andrea Bortner to the newly created role of chief human resources officer, a role to which the seasoned professional brings 30 years of experience in talent acquisition and development, as well as organizational development.
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