☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 47-1874201 | |||||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
5650 Hollis Street, Emeryville, California | 94608 | |||||||||||||
(Address of principal executive offices) | (Zip Code) | |||||||||||||
(510) 845-1999 | ||||||||||||||
(Registrant's telephone number, including area code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Common Stock, par value $0.001 per share | GO | Nasdaq Global Select Market |
Large accelerated filer | ☒ | Accelerated filer | ☐ | ||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||
Emerging growth company | ☐ |
Page | ||||||||
Item 2. | ||||||||
Item 4. | ||||||||
July 2, 2022 | January 1, 2022 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 84,260 | $ | 140,085 | |||||||
Independent operator receivables and current portion of independent operator notes, net of allowance $1,885 and $1,406 | 8,135 | 7,219 | |||||||||
Other accounts receivable, net of allowance $79 and $57 | 3,683 | 3,159 | |||||||||
Merchandise inventories | 318,424 | 275,502 | |||||||||
Prepaid expenses and other current assets | 14,532 | 16,780 | |||||||||
Total current assets | 429,034 | 442,745 | |||||||||
Independent operator notes, net of allowance $11,212 and $10,506 | 21,736 | 21,516 | |||||||||
Property and equipment, net | 522,392 | 499,387 | |||||||||
Operating lease right-of-use assets | 908,054 | 898,152 | |||||||||
Intangible assets, net | 56,789 | 51,921 | |||||||||
Goodwill | 747,943 | 747,943 | |||||||||
Other assets | 7,448 | 8,144 | |||||||||
Total assets | $ | 2,693,396 | $ | 2,669,808 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Trade accounts payable | $ | 132,846 | $ | 122,110 | |||||||
Accrued and other current liabilities | 52,990 | 49,025 | |||||||||
Accrued compensation | 18,189 | 8,450 | |||||||||
Current lease liabilities | 50,142 | 51,136 | |||||||||
Income and other taxes payable | 6,265 | 7,185 | |||||||||
Total current liabilities | 260,432 | 237,906 | |||||||||
Long-term debt, net | 378,794 | 451,468 | |||||||||
Deferred income tax liabilities, net | 14,980 | 9,416 | |||||||||
Long-term lease liabilities | 982,499 | 961,746 | |||||||||
Total liabilities | 1,636,705 | 1,660,536 | |||||||||
Commitments and contingencies (Note 8) | |||||||||||
Stockholders' equity: | |||||||||||
Common stock, par value $0.001 per share, 500,000,000 shares authorized; 96,846,980 and 96,144,433 shares issued and outstanding, respectively | 97 | 96 | |||||||||
Series A preferred stock, par value $0.001 per share, 50,000,000 shares authorized; no shares issued and outstanding | — | — | |||||||||
Additional paid-in capital | 827,451 | 811,701 | |||||||||
Retained earnings | 229,143 | 197,475 | |||||||||
Total stockholders' equity | 1,056,691 | 1,009,272 | |||||||||
Total liabilities and stockholders' equity | $ | 2,693,396 | $ | 2,669,808 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Net sales | $ | 897,659 | $ | 775,535 | $ | 1,729,086 | $ | 1,528,001 | |||||||||||||||
Cost of sales | 618,248 | 537,737 | 1,198,786 | 1,058,276 | |||||||||||||||||||
Gross profit | 279,411 | 237,798 | 530,300 | 469,725 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general and administrative | 224,225 | 192,955 | 431,658 | 381,553 | |||||||||||||||||||
Depreciation and amortization | 18,791 | 16,959 | 37,024 | 32,502 | |||||||||||||||||||
Share-based compensation | 9,484 | 4,210 | 15,279 | 8,149 | |||||||||||||||||||
Total operating expenses | 252,500 | 214,124 | 483,961 | 422,204 | |||||||||||||||||||
Income from operations | 26,911 | 23,674 | 46,339 | 47,521 | |||||||||||||||||||
Other expenses (income): | |||||||||||||||||||||||
Interest expense, net | 3,875 | 3,922 | 7,557 | 7,828 | |||||||||||||||||||
Gain on insurance recoveries | — | (3,970) | — | (3,970) | |||||||||||||||||||
Loss on debt extinguishment | 1,274 | — | 1,274 | — | |||||||||||||||||||
Total other expenses (income) | 5,149 | (48) | 8,831 | 3,858 | |||||||||||||||||||
Income before income taxes | 21,762 | 23,722 | 37,508 | 43,663 | |||||||||||||||||||
Income tax expense | 1,668 | 4,082 | 5,840 | 5,131 | |||||||||||||||||||
Net income and comprehensive income | $ | 20,094 | $ | 19,640 | $ | 31,668 | $ | 38,532 | |||||||||||||||
Basic earnings per share | $ | 0.21 | $ | 0.21 | $ | 0.33 | $ | 0.40 | |||||||||||||||
Diluted earnings per share | $ | 0.20 | $ | 0.20 | $ | 0.32 | $ | 0.39 | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 96,578 | 95,724 | 96,358 | 95,449 | |||||||||||||||||||
Diluted | 100,140 | 99,604 | 99,788 | 99,587 |
Common Stock | Additional Paid-In Capital | Retained Earnings | Stockholders' Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balance as of January 1, 2022 | 96,144,433 | $ | 96 | $ | 811,701 | $ | 197,475 | $ | 1,009,272 | ||||||||||||||||||||
Exercise and vesting of share-based awards | 276,473 | — | 887 | — | 887 | ||||||||||||||||||||||||
Share-based compensation expense | — | — | 5,795 | — | 5,795 | ||||||||||||||||||||||||
Repurchase of common stock | (139,718) | — | (3,451) | — | (3,451) | ||||||||||||||||||||||||
Dividends paid | — | — | (7) | — | (7) | ||||||||||||||||||||||||
Net income and comprehensive income | — | — | — | 11,574 | 11,574 | ||||||||||||||||||||||||
Balance as of April 2, 2022 | 96,281,188 | $ | 96 | $ | 814,925 | $ | 209,049 | $ | 1,024,070 | ||||||||||||||||||||
Exercise and vesting of share-based awards | 565,792 | 1 | 3,068 | — | 3,069 | ||||||||||||||||||||||||
Share-based compensation expense | — | — | 9,484 | — | 9,484 | ||||||||||||||||||||||||
Dividends paid | — | — | (26) | — | (26) | ||||||||||||||||||||||||
Net income and comprehensive income | — | — | — | 20,094 | 20,094 | ||||||||||||||||||||||||
Balance as of July 2, 2022 | 96,846,980 | $ | 97 | $ | 827,451 | $ | 229,143 | $ | 1,056,691 | ||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Stockholders' Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balance as of January 2, 2021 | 94,854,336 | $ | 95 | $ | 787,047 | $ | 135,165 | $ | 922,307 | ||||||||||||||||||||
Exercise and vesting of share-based awards | 647,137 | 1 | 2,952 | — | 2,953 | ||||||||||||||||||||||||
Share-based compensation expense | — | — | 3,939 | — | 3,939 | ||||||||||||||||||||||||
Dividends paid | — | — | (5) | — | (5) | ||||||||||||||||||||||||
Net income and comprehensive income | — | — | — | 18,892 | 18,892 | ||||||||||||||||||||||||
Balance as of April 3, 2021 | 95,501,473 | $ | 96 | $ | 793,933 | $ | 154,057 | $ | 948,086 | ||||||||||||||||||||
Exercise and vesting of share-based awards | 335,747 | — | 2,039 | — | 2,039 | ||||||||||||||||||||||||
Share-based compensation expense | — | — | 4,210 | — | 4,210 | ||||||||||||||||||||||||
Dividends paid | — | — | (92) | — | (92) | ||||||||||||||||||||||||
Net income and comprehensive income | — | — | — | 19,640 | 19,640 | ||||||||||||||||||||||||
Balance as of July 3, 2021 | 95,837,220 | $ | 96 | $ | 800,090 | $ | 173,697 | $ | 973,883 | ||||||||||||||||||||
26 Weeks Ended | |||||||||||
July 2, 2022 | July 3, 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 31,668 | $ | 38,532 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation of property and equipment | 34,813 | 29,969 | |||||||||
Amortization of intangible and other assets | 3,731 | 3,842 | |||||||||
Amortization of debt issuance costs and discounts | 1,190 | 1,255 | |||||||||
Gain on insurance recoveries | — | (3,970) | |||||||||
Loss on debt extinguishment | 1,274 | — | |||||||||
Share-based compensation | 15,279 | 8,149 | |||||||||
Provision for accounts receivable | 2,052 | 2,289 | |||||||||
Proceeds from insurance recoveries - business interruption and inventory | — | 2,103 | |||||||||
Deferred income taxes | 5,564 | 4,567 | |||||||||
Other | 546 | 764 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Independent operator and other accounts receivable | (2,614) | 1,869 | |||||||||
Merchandise inventories | (42,922) | (3,015) | |||||||||
Prepaid expenses and other current assets | 2,248 | 2,236 | |||||||||
Income and other taxes payable | (920) | (742) | |||||||||
Trade accounts payable, accrued compensation and other liabilities | 22,358 | (11,279) | |||||||||
Changes in operating lease assets and liabilities, net | 10,460 | 8,570 | |||||||||
Net cash provided by operating activities | 84,727 | 85,139 | |||||||||
Cash flows from investing activities: | |||||||||||
Advances to independent operators | (4,788) | (4,945) | |||||||||
Repayments of advances from independent operators | 3,691 | 2,464 | |||||||||
Purchases of property and equipment | (58,318) | (63,988) | |||||||||
Proceeds from sales of assets | 29 | 20 | |||||||||
Investments in intangible assets and licenses | (5,992) | (3,637) | |||||||||
Proceeds from insurance recoveries - property and equipment | — | 1,867 | |||||||||
Net cash used in investing activities | (65,378) | (68,219) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from exercise of stock options | 3,956 | 4,992 | |||||||||
Principal payments on senior term loan | (75,000) | — | |||||||||
Principal payments on finance leases | (646) | (518) | |||||||||
Repurchase of common stock | (3,451) | — | |||||||||
Dividends paid | (33) | (97) | |||||||||
Net cash provided by (used in) financing activities | (75,174) | 4,377 | |||||||||
Net increase (decrease) in cash and cash equivalents | (55,825) | 21,297 | |||||||||
Cash and cash equivalents at beginning of period | 140,085 | 105,326 | |||||||||
Cash and cash equivalents at end of period | $ | 84,260 | $ | 126,623 | |||||||
July 2, 2022 | January 1, 2022 | ||||||||||||||||||||||
Carrying Amount (1) | Estimated Fair Value (2) | Carrying Amount (1) | Estimated Fair Value (2) | ||||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||
Senior term loan (Level 2) | $ | 378,794 | $ | 366,713 | $ | 451,468 | $ | 457,700 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Perishable (1) | $ | 325,540 | $ | 270,856 | $ | 626,382 | $ | 532,274 | |||||||||||||||
Non-perishable (2) | 572,119 | 504,679 | 1,102,704 | 995,727 | |||||||||||||||||||
Total net sales | $ | 897,659 | $ | 775,535 | $ | 1,729,086 | $ | 1,528,001 |
Allowance | Current Portion | Long-term Portion | |||||||||||||||||||||||||||||||||
Gross | Current Portion | Long-term Portion | Net | ||||||||||||||||||||||||||||||||
July 2, 2022 | |||||||||||||||||||||||||||||||||||
Independent operator notes | $ | 35,331 | $ | (682) | $ | (11,212) | $ | 23,437 | $ | 1,701 | $ | 21,736 | |||||||||||||||||||||||
Independent operator receivables | 7,637 | (1,203) | — | 6,434 | 6,434 | — | |||||||||||||||||||||||||||||
Total | $ | 42,968 | $ | (1,885) | $ | (11,212) | $ | 29,871 | $ | 8,135 | $ | 21,736 |
Allowance | Current Portion | Long-term Portion | |||||||||||||||||||||||||||||||||
Gross | Current Portion | Long-term Portion | Net | ||||||||||||||||||||||||||||||||
January 1, 2022 | |||||||||||||||||||||||||||||||||||
Independent operator notes | $ | 34,221 | $ | (811) | $ | (10,506) | $ | 22,904 | $ | 1,388 | $ | 21,516 | |||||||||||||||||||||||
Independent operator receivables | 6,426 | (595) | — | 5,831 | 5,831 | — | |||||||||||||||||||||||||||||
Total | $ | 40,647 | $ | (1,406) | $ | (10,506) | $ | 28,735 | $ | 7,219 | $ | 21,516 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Beginning balance | $ | 12,547 | $ | 9,003 | $ | 11,912 | $ | 8,109 | |||||||||||||||
Provision for IO notes and IO receivables | 808 | 1,400 | 2,015 | 2,300 | |||||||||||||||||||
Write-off of provision for IO notes and IO receivables | (258) | (226) | (830) | (232) | |||||||||||||||||||
Ending Balance | $ | 13,097 | $ | 10,177 | $ | 13,097 | $ | 10,177 |
Credit Quality Indicator | 2022 (YTD) | 2021 | 2020 | 2019 | 2018 | Prior | Total | ||||||||||||||||||||||||||||||||||
TCAP | $ | 1,996 | $ | 2,818 | $ | 3,579 | $ | 1,341 | $ | 773 | $ | 566 | $ | 11,073 | |||||||||||||||||||||||||||
Non-TCAP | 2,831 | 3,386 | 3,864 | 2,840 | 1,668 | 1,073 | 15,662 | ||||||||||||||||||||||||||||||||||
New store | 2,970 | 5,481 | 145 | — | — | — | 8,596 | ||||||||||||||||||||||||||||||||||
Total | $ | 7,797 | $ | 11,685 | $ | 7,588 | $ | 4,181 | $ | 2,441 | $ | 1,639 | $ | 35,331 |
July 2, 2022 | January 1, 2022 | ||||||||||
First Lien Credit Agreement: | |||||||||||
Senior term loan | $ | 385,000 | $ | 460,000 | |||||||
Long-term debt, gross | 385,000 | 460,000 | |||||||||
Less: Unamortized debt issuance costs and debt discounts | (6,206) | (8,532) | |||||||||
Long-term debt, net | $ | 378,794 | $ | 451,468 |
Remainder of fiscal 2022 | $ | — | |||
Fiscal 2023 | — | ||||
Fiscal 2024 | — | ||||
Fiscal 2025 | 385,000 | ||||
Fiscal 2026 | — | ||||
Thereafter | — | ||||
Total | $ | 385,000 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Interest on loans | $ | 3,789 | $ | 3,466 | $ | 7,320 | $ | 6,965 | |||||||||||||||
Amortization of debt issuance costs and debt discounts | 562 | 627 | 1,190 | 1,255 | |||||||||||||||||||
Interest on finance leases | 94 | 97 | 184 | 190 | |||||||||||||||||||
Other | — | 3 | — | 6 | |||||||||||||||||||
Interest income | (570) | (271) | (1,137) | (588) | |||||||||||||||||||
Interest expense, net | $ | 3,875 | $ | 3,922 | $ | 7,557 | $ | 7,828 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Write off of debt issuance costs | $ | 1,127 | $ | — | $ | 1,127 | $ | — | |||||||||||||||
Write off of debt discounts | 147 | — | 147 | — | |||||||||||||||||||
Loss on debt extinguishment | $ | 1,274 | $ | — | $ | 1,274 | $ | — | |||||||||||||||
Time-Based Stock Options | Performance-Based Stock Options | ||||||||||||||||||||||
Number of Options | Weighted-Average Exercise Price | Number of Options | Weighted-Average Exercise Price | ||||||||||||||||||||
Options outstanding as of January 1, 2022 | 3,135,141 | $ | 12.77 | 1,696,194 | $ | 4.58 | |||||||||||||||||
Exercised | (158,593) | 10.18 | (501,195) | 4.40 | |||||||||||||||||||
Forfeitures | (27,672) | 20.24 | — | — | |||||||||||||||||||
Options outstanding as of July 2, 2022 | 2,948,876 | $ | 12.84 | 1,194,999 | $ | 4.66 | |||||||||||||||||
Options vested and exercisable as of July 2, 2022 | 1,782,983 | $ | 7.46 | 1,194,999 | $ | 4.66 |
Number of Shares | Weighted-Average Grant Date Fair Value | ||||||||||
Unvested balance as of January 1, 2022 | 836,496 | $ | 30.14 | ||||||||
Granted | 432,578 | 29.22 | |||||||||
Vested | (183,113) | 35.98 | |||||||||
Forfeitures | (47,854) | 30.42 | |||||||||
Unvested balance as of July 2, 2022 | 1,038,107 | $ | 28.71 |
Number of Shares | Weighted-Average Grant Date Fair Value | ||||||||||
Unvested balance as of January 1, 2022 | 576,725 | $ | 36.36 | ||||||||
Granted (1) | 400,774 | 29.03 | |||||||||
Adjustment for expected performance achievement (2) | 205,829 | 31.61 | |||||||||
Forfeitures | (45,169) | 35.46 | |||||||||
Unvested balance as of July 2, 2022 (3) | 1,138,159 | $ | 32.96 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Time-based stock options | $ | 559 | $ | 315 | $ | 1,017 | $ | 1,037 | |||||||||||||||
RSUs | 4,197 | 1,917 | 7,522 | 3,413 | |||||||||||||||||||
PSUs | 4,702 | 1,886 | 6,707 | 3,602 | |||||||||||||||||||
Dividends (1) | 26 | 92 | 33 | 97 | |||||||||||||||||||
Share-based compensation expense | $ | 9,484 | $ | 4,210 | $ | 15,279 | $ | 8,149 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Income tax expense | $ | 1,668 | $ | 4,082 | $ | 5,840 | $ | 5,131 | |||||||||||||||
Effective income tax rate | 7.7 | % | 17.2 | % | 15.6 | % | 11.8 | % |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Net income and comprehensive income | $ | 20,094 | $ | 19,640 | $ | 31,668 | $ | 38,532 | |||||||||||||||
Denominator | |||||||||||||||||||||||
Weighted-average shares outstanding – basic | 96,578 | 95,724 | 96,358 | 95,449 | |||||||||||||||||||
Effect of dilutive options | 3,140 | 3,783 | 3,091 | 4,023 | |||||||||||||||||||
Effect of dilutive RSUs | 422 | 97 | 339 | 115 | |||||||||||||||||||
Weighted-average shares outstanding – diluted (1) | 100,140 | 99,604 | 99,788 | 99,587 | |||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 0.21 | $ | 0.21 | $ | 0.33 | $ | 0.40 | |||||||||||||||
Diluted | $ | 0.20 | $ | 0.20 | $ | 0.32 | $ | 0.39 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
RSUs | — | 2 | 173 | 2 | |||||||||||||||||||
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Net sales | $ | 897,659 | $ | 775,535 | $ | 1,729,086 | $ | 1,528,001 | |||||||||||||||
Cost of sales | 618,248 | 537,737 | 1,198,786 | 1,058,276 | |||||||||||||||||||
Gross profit | 279,411 | 237,798 | 530,300 | 469,725 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general and administrative | 224,225 | 192,955 | 431,658 | 381,553 | |||||||||||||||||||
Depreciation and amortization | 18,791 | 16,959 | 37,024 | 32,502 | |||||||||||||||||||
Share-based compensation | 9,484 | 4,210 | 15,279 | 8,149 | |||||||||||||||||||
Total operating expenses | 252,500 | 214,124 | 483,961 | 422,204 | |||||||||||||||||||
Income from operations | 26,911 | 23,674 | 46,339 | 47,521 | |||||||||||||||||||
Other expenses (income): | |||||||||||||||||||||||
Interest expense, net | 3,875 | 3,922 | 7,557 | 7,828 | |||||||||||||||||||
Gain on insurance recoveries | — | (3,970) | — | (3,970) | |||||||||||||||||||
Loss on debt extinguishment | 1,274 | — | 1,274 | — | |||||||||||||||||||
Total other expenses (income) | 5,149 | (48) | 8,831 | 3,858 | |||||||||||||||||||
Income before income taxes | 21,762 | 23,722 | 37,508 | 43,663 | |||||||||||||||||||
Income tax expense | 1,668 | 4,082 | 5,840 | 5,131 | |||||||||||||||||||
Net income and comprehensive income | $ | 20,094 | $ | 19,640 | $ | 31,668 | $ | 38,532 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Percentage of net sales (1) | |||||||||||||||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Cost of sales | 68.9 | % | 69.3 | % | 69.3 | % | 69.3 | % | |||||||||||||||
Gross profit | 31.1 | % | 30.7 | % | 30.7 | % | 30.7 | % | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general and administrative | 25.0 | % | 24.9 | % | 25.0 | % | 25.0 | % | |||||||||||||||
Depreciation and amortization | 2.1 | % | 2.2 | % | 2.1 | % | 2.1 | % | |||||||||||||||
Share-based compensation | 1.1 | % | 0.5 | % | 0.9 | % | 0.5 | % | |||||||||||||||
Total operating expenses | 28.1 | % | 27.6 | % | 28.0 | % | 27.6 | % | |||||||||||||||
Income from operations | 3.0 | % | 3.1 | % | 2.7 | % | 3.1 | % | |||||||||||||||
Other expenses (income): | |||||||||||||||||||||||
Interest expense, net | 0.4 | % | 0.5 | % | 0.4 | % | 0.5 | % | |||||||||||||||
Gain on insurance recoveries | — | % | (0.5) | % | — | % | (0.3) | % | |||||||||||||||
Loss on debt extinguishment | 0.1 | % | — | % | 0.1 | % | — | % | |||||||||||||||
Total other expenses (income) | 0.6 | % | — | % | 0.5 | % | 0.3 | % | |||||||||||||||
Income before income taxes | 2.4 | % | 3.1 | % | 2.2 | % | 2.9 | % | |||||||||||||||
Income tax expense | 0.2 | % | 0.5 | % | 0.3 | % | 0.3 | % | |||||||||||||||
Net income and comprehensive income | 2.2 | % | 2.5 | % | 1.8 | % | 2.5 | % | |||||||||||||||
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Other Financial and Operations Data | |||||||||||||||||||||||
Number of new stores | 7 | 11 | 11 | 21 | |||||||||||||||||||
Number of stores open at end of period | 425 | 400 | 425 | 400 | |||||||||||||||||||
Comparable store sales increase (decrease) (1) | 11.2 | % | (10.0) | % | 8.2 | % | (9.1) | % | |||||||||||||||
EBITDA (2) | $ | 45,191 | $ | 45,311 | $ | 83,609 | $ | 85,302 | |||||||||||||||
Adjusted EBITDA (2) | $ | 60,137 | $ | 50,836 | $ | 109,387 | $ | 99,673 | |||||||||||||||
Adjusted net income (2) | $ | 28,853 | $ | 23,335 | $ | 50,360 | $ | 46,459 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Net income | $ | 20,094 | $ | 19,640 | $ | 31,668 | $ | 38,532 | |||||||||||||||
Interest expense, net | 3,875 | 3,922 | 7,557 | 7,828 | |||||||||||||||||||
Income tax expense | 1,668 | 4,082 | 5,840 | 5,131 | |||||||||||||||||||
Depreciation and amortization expenses (1) | 19,554 | 17,667 | 38,544 | 33,811 | |||||||||||||||||||
EBITDA | 45,191 | 45,311 | 83,609 | 85,302 | |||||||||||||||||||
Share-based compensation expenses (2) | 9,484 | 4,210 | 15,279 | 8,149 | |||||||||||||||||||
Non-cash rent (3) | 1,835 | 3,061 | 3,771 | 5,969 | |||||||||||||||||||
Asset impairment and gain or loss on disposition (4) | 182 | 305 | 545 | 757 | |||||||||||||||||||
Provision for accounts receivable reserves (5) | 819 | 1,334 | 2,052 | 2,289 | |||||||||||||||||||
Other (6) | 2,626 | (3,385) | 4,131 | (2,793) | |||||||||||||||||||
Adjusted EBITDA | $ | 60,137 | $ | 50,836 | $ | 109,387 | $ | 99,673 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | July 2, 2022 | July 3, 2021 | ||||||||||||||||||||
Net income | $ | 20,094 | $ | 19,640 | $ | 31,668 | $ | 38,532 | |||||||||||||||
Share-based compensation expenses (2) | 9,484 | 4,210 | 15,279 | 8,149 | |||||||||||||||||||
Non-cash rent (3) | 1,835 | 3,061 | 3,771 | 5,969 | |||||||||||||||||||
Asset impairment and gain or loss on disposition (4) | 182 | 305 | 545 | 757 | |||||||||||||||||||
Provision for accounts receivable reserves (5) | 819 | 1,334 | 2,052 | 2,289 | |||||||||||||||||||
Other (6) | 2,626 | (3,385) | 4,131 | (2,793) | |||||||||||||||||||
Amortization of purchase accounting assets and deferred financing costs (7) | 3,055 | 2,943 | 6,167 | 5,886 | |||||||||||||||||||
Tax adjustment to normalize effective tax rate (8) | (4,295) | (2,402) | (4,471) | (6,658) | |||||||||||||||||||
Tax effect of total adjustments (9) | (4,947) | (2,371) | (8,782) | (5,672) | |||||||||||||||||||
Adjusted net income | $ | 28,853 | $ | 23,335 | $ | 50,360 | $ | 46,459 | |||||||||||||||
GAAP earnings per share | |||||||||||||||||||||||
Basic | $ | 0.21 | $ | 0.21 | $ | 0.33 | $ | 0.40 | |||||||||||||||
Diluted | $ | 0.20 | $ | 0.20 | $ | 0.32 | $ | 0.39 | |||||||||||||||
Adjusted earnings per share | |||||||||||||||||||||||
Basic | $ | 0.30 | $ | 0.24 | $ | 0.52 | $ | 0.49 | |||||||||||||||
Diluted | $ | 0.29 | $ | 0.23 | $ | 0.50 | $ | 0.47 | |||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
Basic | 96,578 | 95,724 | 96,358 | 95,449 | |||||||||||||||||||
Diluted | 100,140 | 99,604 | 99,788 | 99,587 | |||||||||||||||||||
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 897,659 | $ | 775,535 | $ | 122,124 | 15.7 | % | $ | 1,729,086 | $ | 1,528,001 | $ | 201,085 | 13.2 | % |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Cost of sales | $ | 618,248 | $ | 537,737 | $ | 80,511 | 15.0 | % | $ | 1,198,786 | $ | 1,058,276 | $ | 140,510 | 13.3 | % | |||||||||||||||||||||||||||||||
% of net sales | 68.9 | % | 69.3 | % | 69.3 | % | 69.3 | % |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Gross profit | $ | 279,411 | $ | 237,798 | $ | 41,613 | 17.5 | % | $ | 530,300 | $ | 469,725 | $ | 60,575 | 12.9 | % | |||||||||||||||||||||||||||||||
Gross margin | 31.1 | % | 30.7 | % | 30.7 | % | 30.7 | % |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
SG&A | $ | 224,225 | $ | 192,955 | $ | 31,270 | 16.2 | % | $ | 431,658 | $ | 381,553 | $ | 50,105 | 13.1 | % | |||||||||||||||||||||||||||||||
% of net sales | 25.0 | % | 24.9 | % | 25.0 | % | 25.0 | % |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | $ | 18,791 | $ | 16,959 | $ | 1,832 | 10.8 | % | $ | 37,024 | $ | 32,502 | $ | 4,522 | 13.9 | % | |||||||||||||||||||||||||||||||
% of net sales | 2.1 | % | 2.2 | % | 2.1 | % | 2.1 | % |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Share-based compensation | $ | 9,484 | $ | 4,210 | $ | 5,274 | 125.3 | % | $ | 15,279 | $ | 8,149 | $ | 7,130 | 87.5 | % | |||||||||||||||||||||||||||||||
% of net sales | 1.1 | % | 0.5 | % | 0.9 | % | 0.5 | % |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Interest expense, net | $ | 3,875 | $ | 3,922 | $ | (47) | (1.2) | % | $ | 7,557 | $ | 7,828 | $ | (271) | (3.5) | % | |||||||||||||||||||||||||||||||
% of net sales | 0.4 | % | 0.5 | % | 0.4 | % | 0.5 | % |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Gain on insurance recoveries | $ | — | $ | (3,970) | $ | 3,970 | (100.0) | % | $ | — | $ | (3,970) | $ | 3,970 | (100.0) | % | |||||||||||||||||||||||||||||||
% of net sales | — | % | (0.5) | % | — | % | (0.3) | % |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Loss on debt extinguishment | $ | 1,274 | $ | — | $ | 1,274 | N/A | $ | 1,274 | $ | — | $ | 1,274 | N/A | |||||||||||||||||||||||||||||||||
% of net sales | 0.1 | % | — | % | 0.1 | % | — | % |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Income tax expense | $ | 1,668 | $ | 4,082 | $ | (2,414) | (59.1) | % | $ | 5,840 | $ | 5,131 | $ | 709 | 13.8 | % | |||||||||||||||||||||||||||||||
% of net sales | 0.2 | % | 0.5 | % | 0.3 | % | 0.3 | % | |||||||||||||||||||||||||||||||||||||||
Effective tax rate | 7.7 | % | 17.2 | % | 15.6 | % | 11.8 | % |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Net income | $ | 20,094 | $ | 19,640 | $ | 454 | 2.3 | % | $ | 31,668 | $ | 38,532 | $ | (6,864) | (17.8) | % | |||||||||||||||||||||||||||||||
% of net sales | 2.2 | % | 2.5 | % | 1.8 | % | 2.5 | % |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 60,137 | $ | 50,836 | $ | 9,301 | 18.3 | % | $ | 109,387 | $ | 99,673 | $ | 9,714 | 9.7 | % |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Adjusted net income | $ | 28,853 | $ | 23,335 | $ | 5,518 | 23.6 | % | $ | 50,360 | $ | 46,459 | $ | 3,901 | 8.4 | % |
26 Weeks Ended | |||||||||||||||||||||||
July 2, 2022 | July 3, 2021 | $ Change | % Change | ||||||||||||||||||||
Net cash provided by operating activities | $ | 84,727 | $ | 85,139 | $ | (412) | (0.5) | % | |||||||||||||||
Net cash used in investing activities | (65,378) | (68,219) | 2,841 | (4.2) | % | ||||||||||||||||||
Net cash provided by (used in) financing activities | (75,174) | 4,377 | (79,551) | (1,817.5) | % | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | $ | (55,825) | $ | 21,297 | $ | (77,122) | (362.1) | % |
Incorporated by Reference | ||||||||||||||||||||||||||||||||
Exhibit No. | Exhibit | Form | File No. | Filing Date | Exhibit No. | |||||||||||||||||||||||||||
3.1 | 8-K | 001-38950 | 6/10/2022 | 3.1 | ||||||||||||||||||||||||||||
3.2 | 8-K | 001-38950 | 4/8/2022 | 3.1 | ||||||||||||||||||||||||||||
10.1†* | ||||||||||||||||||||||||||||||||
31.1* | ||||||||||||||||||||||||||||||||
31.2* | ||||||||||||||||||||||||||||||||
32.1** | ||||||||||||||||||||||||||||||||
32.2** | ||||||||||||||||||||||||||||||||
101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||||||||||||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||||||||||||||||||||||||||
101.CAL | Inline XBRL Extension Calculation Linkbase Document | |||||||||||||||||||||||||||||||
101.DEF | Inline XBRL Extension Definition Linkbase Document | |||||||||||||||||||||||||||||||
101.LAB | Inline XBRL Extension Label Linkbase Document | |||||||||||||||||||||||||||||||
101.PRE | Inline XBRL Extension Presentation Linkbase Document | |||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
† | Management contract or compensatory plan or arrangement. | |||||||
* | Filed herewith. | |||||||
** | Furnished herewith. The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Grocery Outlet Holding Corp. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing. |
Grocery Outlet Holding Corp. | ||||||||||||||
Date: | August 10, 2022 | By: | /s/ Charles C. Bracher | |||||||||||
Charles C. Bracher Chief Financial Officer (Principal Financial Officer) | ||||||||||||||
Date: | August 10, 2022 | By: | /s/ Lindsay E. Gray | |||||||||||
Lindsay E. Gray Vice President and Corporate Controller (Principal Accounting Officer) |
Member | Chair | |||||||
Audit and Risk Committee | $15,000 | $25,000 | ||||||
Compensation Committee | $10,000 | $20,000 | ||||||
Nominating and Corporate Governance Committee | $10,000 | $20,000 |
Date: | August 10, 2022 | By: | /s/ Eric J. Lindberg, Jr. | ||||||||||||||
Eric J. Lindberg, Jr. | |||||||||||||||||
Chief Executive Officer | |||||||||||||||||
(Principal Executive Officer) |
Date: | August 10, 2022 | By: | /s/ Charles C. Bracher | ||||||||||||||
Charles C. Bracher | |||||||||||||||||
Chief Financial Officer | |||||||||||||||||
(Principal Financial Officer) |
Date: | August 10, 2022 | By: | /s/ Eric J. Lindberg, Jr. | ||||||||||||||
Eric J. Lindberg, Jr. | |||||||||||||||||
Chief Executive Officer | |||||||||||||||||
(Principal Executive Officer) |
Date: | August 10, 2022 | By: | /s/ Charles C. Bracher | ||||||||||||||
Charles C. Bracher | |||||||||||||||||
Chief Financial Officer | |||||||||||||||||
(Principal Financial Officer) |