Marketing issues and EBT distributions that affected SNAP/affordability contributed to a sales dip starting in late September ahead of the earnings release.

Grocery Outlet is closing 36 stores nationwide as part of a portfolio optimization to cut losses and streamline operations, including five New Jersey locations.

In Pennsylvania, the affected stores include 345 Scarlett Road in Kennett Square, and 2017 West Oregon Avenue and 2524 Welsh Road in Philadelphia.

The closures cover 24 stores in the eastern U.S., but the company says it is not exiting any state entirely and intends to continue growing in the East over the long term.

The coverage references Potter’s remarks from the quarterly earnings call and situates the closures within the company’s broader strategy and financial performance.

Analysts had expected higher non-GAAP earnings, signaling profitability concerns despite sales strength.

Overall, the stock is viewed as a wait-and-see as the company restructures through 2026, with limited near-term upside for investors.

Comparable-store sales declined about 0.8% for a 13-week period, signaling weaker demand despite stronger overall sales.

Downgrades reflect worries the company will struggle to win back customers and improve its value proposition amid a challenging macro environment and competition.

Fourth-quarter 2025 net sales rose roughly 11% year over year to $1.22 billion, but comparable-store sales slipped about 1% and GAAP net income rose 29% to $18.7 million.

The most recent quarter showed a $234.8 million operating loss, aided in part by consumer pressure, competition, and disruptions to government aid programs.

For the full year, the company posted a net loss of about $225 million with a 0.5% rise in comparable-store sales, and gross margin was 30.3%.