Q4 Top Performers: Grocery Outlet (NASDAQ:GO) and Other Essential Retail Stocks

Quarterly Review of Non-Discretionary Retailers

Earnings season offers a valuable opportunity to evaluate how companies are performing, especially when compared to others in their industry. In this overview, we focus on Grocery Outlet (NASDAQ:GO) and examine how it and its peers in the essential retail sector have fared recently.

The Challenges of Essential Retail

Food is a necessity, making grocery retail a vital industry—though perhaps not every snack is essential. Despite the constant demand, running a grocery business is notoriously difficult due to high costs associated with sourcing, transporting perishable goods, and maintaining suitable retail spaces. The sector is highly competitive, with many alternatives available to consumers. While e-commerce has disrupted much of retail, groceries remain less affected due to the nature of the products, though innovation could change this dynamic at any time.

Industry Performance in Q4

Across the seven non-discretionary retail stocks monitored, the fourth quarter showed slower momentum. Collectively, their revenues matched analyst expectations, but guidance for the next quarter’s revenue was 1.2% below consensus.

Despite these results, share prices for these companies have remained stable, with little movement on average since the latest earnings announcements.

Grocery Outlet: Q4 Underperformance

Grocery Outlet (NASDAQ:GO) distinguishes itself with a unique sourcing and purchasing strategy, allowing it to offer significant savings on well-known brands.

For the quarter, Grocery Outlet generated $1.22 billion in revenue, marking a 10.7% increase year-over-year. However, this figure was 0.6% below what analysts had projected. The company’s full-year revenue and EBITDA guidance also fell well short of expectations, signaling a softer performance overall.

Jason Potter, President and CEO, commented, “We advanced our strategic initiatives in 2025, but our fourth-quarter results highlight that more progress is needed, and we are acting swiftly.”

Among its peers, Grocery Outlet achieved the highest revenue growth rate. Nevertheless, investors were unimpressed, and the stock has dropped 6.6% since the report, now trading at $6.53.

Target: Q4 Leader

Target (NYSE:TGT) sets itself apart from other major general merchandise retailers by emphasizing style and design, catering to suburban shoppers seeking variety under one roof.

In the latest quarter, Target posted $30.45 billion in revenue—a 1.5% decline from the previous year, but in line with analyst forecasts. The company delivered a strong performance, surpassing expectations for full-year earnings per share and beating quarterly EPS estimates.

The market responded positively, with Target’s stock rising 6.6% since the earnings release, currently priced at $120.61.

BJ’s Wholesale Club

BJ’s Wholesale Club (NYSE:BJ) appeals to value-driven shoppers purchasing for their households, offering groceries, electronics, appliances, and home goods—often in bulk—through a membership model.

BJ’s reported $5.58 billion in revenue, a 5.6% year-over-year increase, matching analyst expectations. However, the quarter was challenging, with EBITDA and full-year EPS guidance missing projections by a wide margin.

As a result, BJ’s stock has declined 3.4% since the earnings announcement and is now trading at $96.59.

Walmart: Retail Giant’s Q4

Walmart (NYSE:WMT), renowned for its expansive Supercenters, serves cost-conscious shoppers seeking a broad selection of products in one location.

For the quarter, Walmart reported $190.7 billion in revenue, a 5.6% increase year-over-year, meeting analyst expectations. Despite this, the company’s full-year and next-quarter EPS guidance fell significantly short of forecasts, indicating a slower period.

Following the report, Walmart’s shares have slipped 2.4% and are currently valued at $123.59.

Costco: Outperforming Expectations

Costco (NASDAQ:COST) is designed as a one-stop destination for suburban shoppers, offering groceries, clothing, toys, and household goods—primarily in bulk—through its membership-only model.

Costco’s quarterly revenue reached $69.6 billion, up 9.2% year-over-year, surpassing analyst estimates by 0.8%. The company also exceeded expectations for gross margin, though EBITDA came in slightly below forecasts.

Costco delivered the largest beat relative to analyst estimates among its competitors. Its stock has climbed 1.3% since the earnings release and is now trading at $995.93.

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The StockStory analyst team, comprised of experienced professional investors, leverages quantitative analysis and automation to deliver high-quality, market-beating insights quickly.