On Wednesday Grocery Outlet priced an IPO of 17.2 million shares at $22.
The stock on Thursday rose 30% to $28.51. It traded as high as $31.50, up 43% from the IPO price of $22. The company issued 17.2 million shares and also gave the underwriters an option on another 2.6 million shares.
Grocery Outlet operates more than 300 stores in California, Idaho, Nevada, Oregon, Pennsylvania and Washington. "[We plan] to expand aggressively throughout our current footprint in five western states ... and the Mid-Atlantic region," the said on a website devoted to attracting people who want to operate its stores under license.
The company was founded in 1946 by Jim Read as a retailer of military-surplus equipment. The Read family continues to manage the company, while Grocery Outlet is also a portfolio company of the private-equity firm Hellman & Friedman.
In a hotly competitive U.S. grocery-buying environment, Grocery Outlet's particular selling point is that it focuses on selling brand-name products, rather than generic alternatives, at deep discount.
A key risk factor the company listed in one of its Securities and Exchange Commission filings: It doesn't sell groceries online and many of its competitors do. It notes that developing such a capability is complex and expensive, and it said that lack of an online presence could hurt its results going forward.
For the full year 2018, Grocery Outlet's net income fell 23% to $15.9 million, or 23 cents a share, as sales rose 10% to $2.29 billion.
First-quarter 2019 profit fell 32% to $3.8 million, or 6 cents a share, as sales added 10% to $606.3 million.
Comparable-store sales were up 3.9% for all of 2018 and 4.2% for the latest first quarter.