Investors snapped up Grocery Outlet (GO) shares on Thursday after the discount supermarket chain beat analyst revenue expectations in a preliminary fiscal-third-quarter report.
Grocery Outlet's stock rose 2.6% to $33.86 after the Emeryville, Calif., chain reported revenue jumped 13% in the quarter ended Sept. 29.
The grocery discounter's revenue tally of $652.5 million beat the $633.3 million estimate of analysts surveyed by FactSet.
While a significant piece of the sales growth came from eight new stores the chain opened during the quarter, Grocery Outlet also reported same-store-sales growth of 5.8%, nearly double the 3% expected by analysts polled by FactSet.
Meanwhile, Grocery Outlet estimated net income for the quarter came in at $8.9 million to $9.6 million.
At the midpoint of the estimate, the figures reflect a 21% increase from the year-earlier quarter, but came up short of the FactSet consensus number of $10.8 million.
Rising sales at Grocery Outlet and other discount chains are pressuring traditional supermarket chains. Overall, Grocery Outlet has opened 30 stores over the past year.
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