Important Notice Regarding Alleged Store Expansion Misrepresentations
NEW YORK, March 23, 2026 (GLOBE NEWSWIRE) — Levi & Korsinsky, LLP notifies investors in Grocery Outlet Holding Corp. (NASDAQ: GO) that a class action lawsuit has been filed on behalf of shareholders who purchased securities between August 5, 2025 and March 4, 2026. Find out if you qualify to recover losses. You may also contact Joseph E. Levi, Esq. at [email protected] or (212) 363-7500.
Grocery Outlet shares fell $2.45 per share, a 27.9% decline, closing at $6.34 on March 5, 2026, after the Company disclosed it was closing 36 financially underperforming stores, recognized $110 million in non-cash impairment charges, and missed full year guidance on nearly every major financial metric. The lead plaintiff deadline is May 15, 2026.
How Excessive Expansion Allegedly Inflated Reported Growth
The discount grocery retailer opened dozens of new locations throughout fiscal 2025, reporting 11 new stores in the second quarter and 13 more in the third quarter. Each quarter, management pointed to “new store sales” as a driver of revenue increases. The lawsuit contends this rapid buildout masked the Company’s inability to generate organic, sustainable comparable store sales growth. When the full picture emerged, comparable store sales for fiscal 2025 had grown just 0.5% on a 52-week basis, missing the low end of guidance by a meaningful margin.
Key Store Expansion Allegations for Shareholders
The complaint alleges that throughout the Class Period, defendants failed to disclose:
– The Company had “expanded too quickly” into new store locations, as its own CEO later admitted
– Purportedly strong financial and operational growth was being artificially supported by excessive, rapid store expansion rather than genuine demand
– 36 stores in the network had no viable path to sustained profitability, with 24 located in the East representing roughly 30% of that region’s fleet
– The Restructuring Plan, declared “substantially completed” in Q2 2025, would require an entirely new Optimization Plan involving significant closures and asset write-downs
– Full year guidance targets for adjusted EBITDA, net sales, comparable store sales, and earnings per share lacked a reasonable basis
The $110 Million Impairment Revelation
During the reporting process for audited fiscal 2025 financial statements, the Company determined that the long-lived assets of the closure stores were impaired, resulting in $110 million of non-cash charges. An additional $149 million non-cash goodwill impairment was also recorded. The lawsuit asserts these write-downs reflect the true cost of a growth strategy that prioritized store count over financial viability.
Submit your information to join this case or call Joseph E. Levi, Esq. at (212) 363-7500.
“This case presents important questions about store expansion disclosure obligations in the discount grocery sector. When a company touts rapid growth while its newest locations lack a viable path to profitability, investors deserve accurate information about the sustainability of that growth trajectory.” — Joseph E. Levi, Esq.
ABOUT LEVI & KORSINSKY, LLP — Over the past 20 years, Levi & Korsinsky has secured hundreds of millions of dollars for aggrieved shareholders. The firm has extensive expertise in complex securities litigation and a team of over 70 employees. For seven consecutive years, Levi & Korsinsky has ranked in ISS Securities Class Action Services’ Top 50 Report. Applications to serve as lead plaintiff must be filed by May 15, 2026.
CONTACT:
Levi & Korsinsky, LLP
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
Tel: (212) 363-7500
Fax: (212) 363-7171
