In a recent filing dated November 13, Rivermont Capital Management, a New York City-based investment firm, disclosed a significant increase in its holdings of Grocery Outlet shares. The firm added nearly 1.1 million shares during the third quarter, bringing its total position in the company to approximately $21.67 million by the end of September. This acquisition was recorded despite the fact that Grocery Outlet's stock price has experienced a considerable decline of about 40% over the past twelve months, contrasting with the S&P 500's gain of roughly 15% during the same period.
Grocery Outlet trades under the ticker GO and, as of the last trading session, was priced at $10.27 per share. The company's market capitalization stands at roughly $1.01 billion. In the trailing twelve months, Grocery Outlet generated revenues of $4.57 billion but recorded a net loss of $4.44 million. The retailer's business model is distinctive in its structure; it operates hundreds of stores across multiple U.S. states, with each location managed independently, catering to value-seeking consumers through a focus on discounted name-brand grocery products.
Rivermont Capital's broader portfolio showcases a preference for established companies with stable cash flows. Its top holdings include Seagate Technology (NASDAQ: STX) valued at approximately $35.46 million, FERG (NYSE: FERG) at $32.29 million, Willis Towers Watson (NASDAQ: WTW) at $29.40 million, Clean Harbors (NYSE: CLH) at $28.48 million, and Western Digital (NASDAQ: WDC) at $27.08 million. These positions typify a strategy favoring durability within various sectors.
Examining recent operational results, Grocery Outlet reported a 5.4% year-over-year increase in net sales for the third quarter, reaching $1.17 billion. This growth was primarily driven by new store openings and increased customer traffic despite declines in average transaction size and margin compression. The company's adjusted EBITDA was $66.7 million for the quarter, a decrease from $72.3 million in the prior year, reflecting additional promotional efforts and restructuring expenses linked to discontinuing underperforming growth projects.
At the conclusion of the third quarter, Grocery Outlet operated 563 stores in 16 states, with management actively pursuing selective expansion opportunities. Store refresh initiatives are slated to potentially boost same-store sales starting in 2026. The combination of a lowered share price and ongoing business growth underscores the investment appeal as perceived by Rivermont Capital, focusing on the company's scale and long-term viability within the discount grocery sector.
Grocery Outlet's competitive advantage stems from its sourcing strategies and independently operated stores, facilitating the delivery of name-brand grocery products at substantially discounted prices. This appeals strongly to consumers prioritizing value, positioning the company uniquely within the grocery retail landscape.
From an investment analysis standpoint, the decision to enhance exposure to Grocery Outlet during a period of notable share price weakness suggests a focus beyond short-term momentum. Instead, it highlights an emphasis on operational fundamentals, market positioning, and the capacity to navigate challenging margin environments while still expanding its retail footprint.