Grocery Outlet Holding (GO) PT Lowered to $16 at BofA Securities

BofA Securities analyst Robert Ohmes lowered the price target on Grocery Outlet Holding (NASDAQ: GO) to $16.00 (from $19.00) while maintaining a Neutral rating.

The analyst comments "$0.21 adj. EPS was +2c vs. BofA/Street. Net sales grew 5.4% y/y on 1.2% comps (vs. Street 2%) and 34 net new stores y/y. Traffic grew 1.8% while avg. ticket was -0.6%. Comps were impacted by marketing/promo adjustments GO tested during 3Q, which drove a negative inflection in the last week of Sep./first week of Oct. (see our recent GO Bull/Bear for more on 4Q-to-date trends). Gross margin of 30.4% (vs. Street 30.5%) was -70bp y/y, which reflected price investments. Total SG&A ratio (excl. $1mn restructuring costs) was +85bp y/y on new store costs, software amortization, and incentive comp."

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