0001771515-22-000108 | 10-Q | XBRL Viewer | Grocery Outlet Holding Corp

Print Document View Excel Document

Cover - shares	6 Months Ended
Cover - shares	Jul. 02, 2022	Aug. 04, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 02, 2022
Document Transition Report	false
Entity File Number	001-38950
Entity Registrant Name	Grocery Outlet Holding Corp.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	47-1874201
Entity Address, Address Line One	5650 Hollis Street
Entity Address, City or Town	Emeryville
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94608
City Area Code	510
Local Phone Number	845-1999
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	GO
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		96,930,442
Entity Central Index Key	0001771515
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jul. 02, 2022	Jan. 01, 2022
Current assets:
Cash and cash equivalents	$ 84,260	$ 140,085
Independent operator receivables and current portion of independent operator notes, net of allowance $1,885 and $1,406	8,135	7,219
Other accounts receivable, net of allowance $79 and $57	3,683	3,159
Merchandise inventories	318,424	275,502
Prepaid expenses and other current assets	14,532	16,780
Total current assets	429,034	442,745
Independent operator notes, net of allowance $11,212 and $10,506	21,736	21,516
Property and equipment, net	522,392	499,387
Operating lease right-of-use assets	908,054	898,152
Intangible assets, net	56,789	51,921
Goodwill	747,943	747,943
Other assets	7,448	8,144
Total assets	2,693,396	2,669,808
Current liabilities:
Trade accounts payable	132,846	122,110
Accrued and other current liabilities	52,990	49,025
Accrued compensation	18,189	8,450
Current lease liabilities	50,142	51,136
Income and other taxes payable	6,265	7,185
Total current liabilities	260,432	237,906
Long-term debt, net	378,794	451,468
Deferred income tax liabilities, net	14,980	9,416
Long-term lease liabilities	982,499	961,746
Total liabilities	1,636,705	1,660,536
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.001 per share, 500,000,000 shares authorized; 96,846,980 and 96,144,433 shares issued and outstanding, respectively	97	96
Series A preferred stock, par value $0.001 per share, 50,000,000 shares authorized; no shares issued and outstanding	0	0
Additional paid-in capital	827,451	811,701
Retained earnings	229,143	197,475
Total stockholders' equity	1,056,691	1,009,272
Total liabilities and stockholders' equity	$ 2,693,396	$ 2,669,808

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jul. 02, 2022	Jan. 01, 2022
Statement of Financial Position [Abstract]
Accounts and financing receivable, allowance for credit loss, current	$ 1,885	$ 1,406
Allowance for doubtful other receivables, current	79	57
Financing receivable, allowance for credit loss, noncurrent	$ 11,212	$ 10,506
Common stock, par (in usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, issued (in shares)	96,846,980	96,144,433
Common stock, outstanding (in shares)	96,846,980	96,144,433
Preferred stock, par (in usd per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Statement of Comprehensive Income [Abstract]
Net sales	$ 897,659	$ 775,535	$ 1,729,086	$ 1,528,001
Cost of sales	618,248	537,737	1,198,786	1,058,276
Gross profit	279,411	237,798	530,300	469,725
Operating expenses:
Selling, general and administrative	224,225	192,955	431,658	381,553
Depreciation and amortization	18,791	16,959	37,024	32,502
Share-based compensation	9,484	4,210	15,279	8,149
Total operating expenses	252,500	214,124	483,961	422,204
Income from operations	26,911	23,674	46,339	47,521
Other expenses (income):
Interest expense, net	3,875	3,922	7,557	7,828
Gain on insurance recoveries	0	(3,970)	0	(3,970)
Loss on debt extinguishment	1,274	0	1,274	0
Total other expenses (income)	5,149	(48)	8,831	3,858
Income before income taxes	21,762	23,722	37,508	43,663
Income tax expense	1,668	4,082	5,840	5,131
Net Income	20,094	19,640	31,668	38,532
Comprehensive income	$ 20,094	$ 19,640	$ 31,668	$ 38,532
Basic earnings per share (in usd per share)	$ 0.21	$ 0.21	$ 0.33	$ 0.40
Diluted earnings per share (in usd per share)	$ 0.20	$ 0.20	$ 0.32	$ 0.39
Weighted average shares outstanding:
Basic (in shares)	96,578	95,724	96,358	95,449
Diluted (in shares)	100,140	99,604	99,788	99,587

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings
Beginning balance (in shares) at Jan. 02, 2021		94,854,336
Beginning balance at Jan. 02, 2021	$ 922,307	$ 95	$ 787,047	$ 135,165
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise and vesting of share-based awards (in shares)		647,137
Exercise and vesting of share-based awards	2,953	$ 1	2,952
Share-based compensation expense	3,939		3,939
Dividends paid	(5)		(5)
Net income	18,892			18,892
Comprehensive income	18,892			18,892
Ending balance (in shares) at Apr. 03, 2021		95,501,473
Ending balance at Apr. 03, 2021	948,086	$ 96	793,933	154,057
Beginning balance (in shares) at Jan. 02, 2021		94,854,336
Beginning balance at Jan. 02, 2021	922,307	$ 95	787,047	135,165
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	38,532
Comprehensive income	38,532
Ending balance (in shares) at Jul. 03, 2021		95,837,220
Ending balance at Jul. 03, 2021	973,883	$ 96	800,090	173,697
Beginning balance (in shares) at Apr. 03, 2021		95,501,473
Beginning balance at Apr. 03, 2021	948,086	$ 96	793,933	154,057
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise and vesting of share-based awards (in shares)		335,747
Exercise and vesting of share-based awards	2,039	$ 0	2,039
Share-based compensation expense	4,210		4,210
Dividends paid	(92)		(92)
Net income	19,640			19,640
Comprehensive income	19,640			19,640
Ending balance (in shares) at Jul. 03, 2021		95,837,220
Ending balance at Jul. 03, 2021	973,883	$ 96	800,090	173,697
Beginning balance (in shares) at Jan. 01, 2022		96,144,433
Beginning balance at Jan. 01, 2022	1,009,272	$ 96	811,701	197,475
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise and vesting of share-based awards (in shares)		276,473
Exercise and vesting of share-based awards	887		887
Share-based compensation expense	5,795		5,795
Repurchase of common stock (in shares)		(139,718)
Repurchase of common stock	(3,451)		(3,451)
Dividends paid	(7)		(7)
Net income	11,574			11,574
Comprehensive income	11,574			11,574
Ending balance (in shares) at Apr. 02, 2022		96,281,188
Ending balance at Apr. 02, 2022	1,024,070	$ 96	814,925	209,049
Beginning balance (in shares) at Jan. 01, 2022		96,144,433
Beginning balance at Jan. 01, 2022	1,009,272	$ 96	811,701	197,475
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	31,668
Comprehensive income	31,668
Ending balance (in shares) at Jul. 02, 2022		96,846,980
Ending balance at Jul. 02, 2022	1,056,691	$ 97	827,451	229,143
Beginning balance (in shares) at Apr. 02, 2022		96,281,188
Beginning balance at Apr. 02, 2022	1,024,070	$ 96	814,925	209,049
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise and vesting of share-based awards (in shares)		565,792
Exercise and vesting of share-based awards	3,069	$ 1	3,068
Share-based compensation expense	9,484		9,484
Dividends paid	(26)		(26)
Net income	20,094			20,094
Comprehensive income	20,094			20,094
Ending balance (in shares) at Jul. 02, 2022		96,846,980
Ending balance at Jul. 02, 2022	$ 1,056,691	$ 97	$ 827,451	$ 229,143

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
Cash flows from operating activities:
Net income	$ 31,668	$ 38,532
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment	34,813	29,969
Amortization of intangible and other assets	3,731	3,842
Amortization of debt issuance costs and discounts	1,190	1,255
Gain on insurance recoveries	0	(3,970)
Loss on debt extinguishment	1,274	0
Share-based compensation	15,279	8,149
Provision for accounts receivable	2,052	2,289
Proceeds from insurance recoveries - business interruption and inventory	0	2,103
Deferred income taxes	5,564	4,567
Other	546	764
Changes in operating assets and liabilities:
Independent operator and other accounts receivable	(2,614)	1,869
Merchandise inventories	(42,922)	(3,015)
Prepaid expenses and other current assets	2,248	2,236
Income and other taxes payable	(920)	(742)
Trade accounts payable, accrued compensation and other liabilities	22,358	(11,279)
Changes in operating lease assets and liabilities, net	10,460	8,570
Net cash provided by operating activities	84,727	85,139
Cash flows from investing activities:
Advances to independent operators	(4,788)	(4,945)
Repayments of advances from independent operators	3,691	2,464
Purchases of property and equipment	(58,318)	(63,988)
Proceeds from sales of assets	29	20
Investments in intangible assets and licenses	(5,992)	(3,637)
Proceeds from insurance recoveries - property and equipment	0	1,867
Net cash used in investing activities	(65,378)	(68,219)
Cash flows from financing activities:
Proceeds from exercise of stock options	3,956	4,992
Principal payments on senior term loan	(75,000)	0
Principal payments on finance leases	(646)	(518)
Repurchase of common stock	(3,451)	0
Dividends paid	(33)	(97)
Net cash provided by (used in) financing activities	(75,174)	4,377
Net increase (decrease) in cash and cash equivalents	(55,825)	21,297
Cash and cash equivalents at beginning of period	140,085	105,326
Cash and cash equivalents at end of period	$ 84,260	$ 126,623

Organization and Summary of Significant Accounting Policies

6 Months Ended

Jul. 02, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Summary of Significant Account Policies

Organization and Summary of Significant Accounting Policies

Description of Business — Based in Emeryville, California, and incorporated in Delaware in 2014, Grocery Outlet Holding Corp. (together with its wholly owned subsidiaries, collectively, "Grocery Outlet," "we," or the "Company") is a high-growth, extreme value retailer of quality, name-brand consumables and fresh products sold through a network of independently operated stores. As of July 2, 2022, we had 425 stores throughout California, Washington, Oregon, Pennsylvania, Idaho, Nevada, New Jersey and Maryland.

Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the applicable rules and regulations of the United States ("U.S.") Securities and Exchange Commission (the "SEC") for interim reporting. Certain information and note disclosures included in our annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (the "2021 Form 10-K"). The condensed consolidated balance sheet as of January 1, 2022 included herein has been derived from those audited consolidated financial statements.

Our unaudited condensed consolidated financial statements include the accounts of Grocery Outlet Holding Corp. and its wholly owned subsidiaries. All intercompany balances and transactions were eliminated. In the opinion of management, these condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the periods presented. The interim results of operations and cash flows are not necessarily indicative of those results and cash flows expected for any future interim or annual period. Certain prior period amounts in the notes to the condensed consolidated financial statements have been reclassified to conform to the current period presentation. The reclassification of these items had no impact on net income, earnings per share, or retained earnings in the current or prior period.

Use of Estimates — The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results can differ from these estimates depending upon certain risks and uncertainties. Changes in these estimates are recorded when known.

Segment Reporting — We manage our business as one operating segment. In addition, all of our sales were made to customers located in the U.S. and all property and equipment is located in the U.S.

Merchandise Inventories — Merchandise inventories are valued at the lower of cost or net realizable value. Cost is determined by the weighted-average cost method for warehouse inventories and the retail inventory method for store inventories. We provide for estimated inventory losses between physical inventory counts based on historical averages. This provision is adjusted periodically to reflect the actual shrink results of the physical inventory counts.

Leases — We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets, current lease liabilities, and long-term lease liabilities on our condensed consolidated balance sheets. Finance leases are included in other assets, current lease liabilities, and long-term lease liabilities on our condensed consolidated balance sheets. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease over the same term. Right-of-use assets and liabilities are recognized at commencement date based on the present value of the lease payments over the lease term, reduced by landlord incentives. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate, which is estimated to approximate the interest rate on a collateralized basis with similar terms and payments based on the information available at the commencement date, to determine the present value of our lease payments. Lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that we will exercise the option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term while finance lease payments are charged to interest expense and depreciation and amortization expense over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; lease expense for these short-term leases is recognized on a straight-line basis over the lease term.

We generally lease retail facilities for store locations, distribution centers, office space and equipment and account for these leases as operating leases. We account for one retail store lease and certain equipment leases as finance leases. Lease and non-lease components are accounted for separately. We sublease certain real estate to unrelated third parties under non-cancelable leases and the sublease portfolio consists of operating leases for retail stores.

Fair Value Measurements — Fair value is defined as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value of financial instruments is categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is measured using inputs from the three levels of the fair value hierarchy, which are described as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities

Level 2 — Quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 — Unobservable inputs in which there is little or no market data, which requires us to develop our own assumptions when pricing the financial instruments, such as cash flow modeling assumptions

The assets' or liabilities' fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The fair value framework requires that we maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

There were no assets or liabilities measured at fair value on a recurring or non-recurring basis as of July 2, 2022 or January 1, 2022. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. There were no transfers of assets or liabilities between levels within the fair value hierarchy during the 26 weeks ended July 2, 2022.

Our financial assets and liabilities are carried at cost, which generally approximates their fair value, as described below:

Cash and cash equivalents, independent operator ("IO") receivables, other accounts receivable and accounts payable — The carrying value of such financial instruments approximates their fair value due to factors such as their short-term nature or their variable interest rates.

IO notes receivable (net) — The carrying value of such financial instruments approximates their fair value due to the effect of the related allowance for expected credit losses.

The following table sets forth by level within the fair value hierarchy the carrying amounts and estimated fair values of our significant financial liabilities that are not recorded at fair value on the condensed consolidated balance sheets (amounts in thousands):


	July 2, 2022				January 1, 2022
	Carrying Amount (1)		Estimated Fair Value (2)		Carrying Amount (1)		Estimated Fair Value (2)
Financial Liabilities:
Senior term loan (Level 2)	$	378,794	$	366,713	$	451,468	$	457,700

_______________________

(1)The carrying amounts as of July 2, 2022 and January 1, 2022 are net of unamortized debt discounts of $0.7 million and $1.0 million, respectively, and debt issuance costs of $5.5 million and $7.5 million, respectively.

(2)The estimated fair value of our senior term loan was determined based on the average quoted bid-ask prices for the senior term loan in an over-the-counter market on the last trading day of the periods presented.

Revenue Recognition

Net Sales — We recognize revenue from the sale of products at the point of sale, net of any taxes or deposits collected and remitted to governmental authorities. For e-commerce related sales in which a third-party provides home delivery service, revenue is recognized upon delivery to the customer. Our performance obligations are satisfied upon the transfer of goods to the customer, at the point of sale, and payment from customers is also due at the time of sale. Discounts provided to customers by us are recognized at the time of sale as a reduction in net sales as the products are sold. Discounts provided by IOs are not recognized as a reduction in net sales as these are provided solely by the IO who bears the incremental costs arising from the discount. We do not accept manufacturer coupons.

We do not have any material contract assets or receivables from contracts with customers, any revenue recognized in the current year from performance obligations satisfied in previous periods, any performance obligations, or any material costs to obtain or fulfill a contract as of July 2, 2022 and January 1, 2022.

Gift Cards — We record a deferred revenue liability when a Grocery Outlet gift card is sold. Revenue related to gift cards is recognized as the gift cards are redeemed, which is when we have satisfied our performance obligation. While gift cards are generally redeemed within 12 months, some are never fully redeemed. We reduce the liability and recognize revenue for the unused portion of the gift cards ("breakage") under the proportional method, where recognition of breakage income is based upon the historical run-off rate of unredeemed gift cards. Our gift card deferred revenue liability was $2.8 million and $3.6 million as of July 2, 2022 and January 1, 2022, respectively. Breakage amounts were immaterial for the 13 and 26 weeks ended July 2, 2022 and July 3, 2021.

Disaggregated Revenues — The following table presents net sales revenue by type of product for the periods indicated (amounts in thousands):


	13 Weeks Ended				26 Weeks Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Perishable (1)	$	325,540	$	270,856	$	626,382	$	532,274
Non-perishable (2)	572,119		504,679		1,102,704		995,727
Total net sales	$	897,659	$	775,535	$	1,729,086	$	1,528,001

_______________________

(1) Perishable departments include dairy and deli; produce and floral; and fresh meat and seafood.

(2) Non-perishable departments include non-perishable grocery; general merchandise; health and beauty care; frozen foods; and beer and wine.

Variable Interest Entities — In accordance with the variable interest entities sub-section of Accounting Standards Codification ("ASC") Topic 810, Consolidation, we assess at each reporting period whether we, or any consolidated entity, are considered the primary beneficiary of a variable interest entity ("VIE") and therefore required to consolidate the financial results of the VIE in our consolidated financial statements. Determining whether to consolidate a VIE may require judgment in assessing (i) whether an entity is a VIE, and (ii) if a reporting entity is a VIE's primary beneficiary. A reporting entity is determined to be a VIE's primary beneficiary if it has the power to direct the activities that most significantly impact a VIE's economic performance and the obligation to absorb losses or rights to receive benefits that could potentially be significant to a VIE.

We had 421, 411 and 396 stores operated by IOs as of July 2, 2022, January 1, 2022 and July 3, 2021, respectively. We have agreements in place with each IO. The IO orders merchandise exclusively from us which is provided to the IO on consignment. Under the Independent Operator Agreement (the "Operator Agreement"), the IO selects a majority of merchandise that we consign to the IO, which the IO chooses from our merchandise order guide according to the IO's knowledge and experience with local customer purchasing trends, preferences, historical sales and similar factors. The Operator Agreement gives the IO discretion to adjust our initial prices if the overall effect of all price changes at any time comports with the reputation of our Grocery Outlet retail stores for selling quality, name-brand consumables and fresh products and other merchandise at extreme discounts. IOs are required to furnish initial working capital and to acquire certain store and safety assets. The IO is also required to hire, train and employ a properly trained workforce sufficient in number to enable the IO to fulfill its obligations under the Operator Agreement. Additionally, the IO is responsible for expenses required for business operations, including all labor costs, utilities, credit card processing fees, supplies, taxes, fines, levies and other expenses. Either party may terminate the Operator Agreement without cause upon 75 days' notice.

As consignor of all merchandise to each IO, the aggregate net sales proceeds from merchandise sales belongs to us. Net sales related to IO stores were $883.0 million and $762.1 million for the 13 weeks ended July 2, 2022 and July 3, 2021, respectively, and $1.70 billion and $1.50 billion for the 26 weeks ended July 2, 2022 and July 3, 2021, respectively. We, in turn, pay IOs a commission based on a share of the gross profit of the store. Inventories and related net sales proceeds are our property, and we are responsible for store rent and related occupancy costs. IO commissions were expensed and included in SG&A. IO commissions were $136.5 million and $115.4 million for the 13 weeks ended July 2, 2022 and July 3, 2021, respectively, and $259.2 million and $228.1 million for the 26 weeks ended July 2, 2022 and July 3, 2021, respectively. IO commissions of $9.9 million and $9.1 million were included in accrued expenses as of July 2, 2022 and January 1, 2022, respectively.

IOs may fund their initial store investment from existing capital, a third-party loan or most commonly through a loan from us, as further discussed in Note 2. As collateral for IO obligations and performance, the Operator Agreements grant us the security interests in the assets owned by the IOs related to the respective store. Since the total investment at risk associated with each IO is not sufficient to permit each IO to finance its activities without additional subordinated financial support, the IOs are VIEs which we have variable interests in. To determine if we are the primary beneficiary of these VIEs, we evaluate whether we have (i) the power to direct the activities that most significantly impact the IO's economic performance and (ii) the obligation to absorb losses or the right to receive benefits of the IO that could potentially be significant to the IO. Our evaluation includes identification of significant activities and an assessment of the IO's ability to direct those activities.

Activities that most significantly impact the IO's economic performance relate to sales and labor. Sales activities that significantly impact the IO's economic performance include determining what merchandise the IO will order and sell and the price of such merchandise, both of which the IO controls. The IO is also responsible for all of their own labor. Labor activities that significantly impact the IO's economic performance include hiring, training, supervising, directing, compensating (including wages, salaries and employee benefits) and terminating all of the employees of the IO, activities which the IO controls. Accordingly, the IO has the power to direct the activities that most significantly impact the IO's economic performance. Furthermore, the mutual termination rights associated with the Operator Agreements illustrate the lack of ultimate control over the IO. Therefore, the Company is not the primary beneficiary of these VIEs.

Our maximum exposure, in accordance with ASC Topic 810, to the IOs is generally limited to the IO notes and IO receivables due from these entities, which was $43.0 million and $40.6 million as of July 2, 2022 and January 1, 2022, respectively. See Note 2 for additional information.

Recently Adopted Accounting Standards

No recently adopted accounting pronouncements had a material effect on our condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

Accounting Standards Update ("ASU") No. 2022-02 — In March 2022, the Financial Accounting Standards Board issued ASU No. 2022-02, Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). ASU 2022-02

eliminates the accounting guidance on troubled debt restructurings for creditors in ASC Topic 310 and amends the guidance on "vintage disclosures" to require disclosure of current-period gross write-offs by year of origination. ASU 2022-02 also updates the requirements related to accounting for credit losses under ASC Topic 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We will adopt ASU 2022-02 beginning in the first quarter of fiscal 2023. We do not expect the adoption of ASU 2022-02 to have a material impact on our consolidated financial statements.

Independent Operator Notes and Independent Operator Receivables

6 Months Ended

Jul. 02, 2022

Receivables [Abstract]

Independent Operator Notes and Independent Operator Receivables

The amounts included in IO notes and IO receivables consist primarily of funds we loaned to IOs, net of estimated uncollectible amounts. IO notes are payable on demand and typically bear interest at rates between 3.00% and 9.95%. Accrued interest receivable on IO notes is included within the "independent operator receivables and current portion of independent operator notes, net of allowance" line item on the condensed consolidated balance sheets and was $0.7 million and $0.5 million as of July 2, 2022 and January 1, 2022, respectively. There were no IO notes that were past due or on a non-accrual status due to delinquency as of July 2, 2022 or January 1, 2022. Notes and receivables from our IOs participating in our TCAP, as defined below, are not considered to be past due or on a non-accrual status due to delinquency and are excluded from such measures.

IO notes and IO receivables are financial assets which are measured and carried at amortized cost. An allowance for expected credit losses is deducted from (for expected losses) or added to (for expected recoveries) the amortized cost basis of these assets to arrive at the net carrying amount expected to be collected for such assets.

The allowance is estimated using an expected loss framework, which includes information about past events, current conditions, and reasonable and supportable forecasts that impact the collectibility of the reported amounts of the assets over their lifetime. The allowance is evaluated on a collective basis for assets with shared risk characteristics and credit quality indicators. The primary shared risk characteristic and credit quality indicator pools that we use as a basis for collective evaluation include:

•TCAP — Includes the notes and receivables from IOs with stores that have been open for more than 18 months that are participating in our Temporary Commission Adjustment Program ("TCAP") as of the end of each reporting period. TCAP allows us to provide a greater commission to participating IOs who require assistance in meeting their working capital needs for various reasons, such as new or increased competition or differences in IO skills and experience.

•Non-TCAP — Includes the notes and receivables from IOs with stores that have been open for more than 18 months that are not participating in TCAP as of the end of each reporting period.

•New store — Includes the notes and receivables from IOs with stores that have been open for less than 18 months as of the end of each reporting period.

Assets without such shared risk characteristics or credit quality indicators, such as assets with unique circumstances or with delinquencies and historical losses in excess of their TCAP, non-TCAP or new store peers are evaluated on an individual basis.

Amounts due from IOs and the related allowances as of July 2, 2022 and January 1, 2022 consisted of the following (amounts in thousands):


			Allowance						Current Portion		Long-term Portion
	Gross		Current Portion		Long-term Portion		Net
July 2, 2022
Independent operator notes	$	35,331	$	(682)	$	(11,212)	$	23,437	$	1,701	$	21,736
Independent operator receivables	7,637		(1,203)		—		6,434		6,434		—
Total	$	42,968	$	(1,885)	$	(11,212)	$	29,871	$	8,135	$	21,736


			Allowance						Current Portion		Long-term Portion
	Gross		Current Portion		Long-term Portion		Net
January 1, 2022
Independent operator notes	$	34,221	$	(811)	$	(10,506)	$	22,904	$	1,388	$	21,516
Independent operator receivables	6,426		(595)		—		5,831		5,831		—
Total	$	40,647	$	(1,406)	$	(10,506)	$	28,735	$	7,219	$	21,516

A summary of activity in the IO notes and IO receivables allowance was as follows (amounts in thousands):


	13 Weeks Ended				26 Weeks Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Beginning balance	$	12,547	$	9,003	$	11,912	$	8,109
Provision for IO notes and IO receivables	808		1,400		2,015		2,300

Write-off of provision for IO notes and IO receivables	(258)		(226)		(830)		(232)
Ending Balance	$	13,097	$	10,177	$	13,097	$	10,177

The following table presents the amortized cost basis of IO notes by year of origination and credit quality indicator as of July 2, 2022 (amounts in thousands):


Credit Quality Indicator	2022 (YTD)		2021		2020		2019		2018		Prior		Total
TCAP	$	1,996	$	2,818	$	3,579	$	1,341	$	773	$	566	$	11,073
Non-TCAP	2,831		3,386		3,864		2,840		1,668		1,073		15,662
New store	2,970		5,481		145		—		—		—		8,596
Total	$	7,797	$	11,685	$	7,588	$	4,181	$	2,441	$	1,639	$	35,331

Long-term Debt

6 Months Ended

Jul. 02, 2022

Debt Disclosure [Abstract]

Long-term Debt

Long-term debt consisted of the following (amounts in thousands):


	July 2, 2022		January 1, 2022
First Lien Credit Agreement:
Senior term loan	$	385,000	$	460,000


Long-term debt, gross	385,000		460,000
Less: Unamortized debt issuance costs and debt discounts	(6,206)		(8,532)


Long-term debt, net	$	378,794	$	451,468

First Lien Credit Agreement

GOBP Holdings, Inc. ("GOBP Holdings"), our wholly owned subsidiary, together with another of our wholly owned subsidiaries, has a first lien credit agreement (the "First Lien Credit Agreement") with a syndicate of lenders that consists of a $385.0 million senior term loan and a revolving credit facility for an amount up to $100.0 million, with sub-commitments for a $35.0 million letter of credit and $20.0 million of swingline loans as of July 2, 2022. The First Lien Credit Agreement permits voluntary prepayment on borrowings without premium or penalty. Borrowings under the First Lien Credit Agreement are secured by substantially all the assets of the borrower subsidiary and its guarantors.

Senior Term Loan

On April 29, 2022, we prepaid $75.0 million of principal on the senior term loan outstanding under our First Lien Credit Agreement. In connection with the payment, we wrote off $1.3 million of previously unamortized debt issuance costs and debt discounts.

Our $385.0 million senior term loan matures on October 22, 2025, has an applicable margin of 2.75% for Eurodollar loans and 1.75% for base rate loans, and had an effective interest rate of 4.42% as of July 2, 2022. Due to previous prepayments on the senior term loan, no further principal payment on the senior term loan will be due until the maturity date.

Revolving Credit Facility

As of July 2, 2022, we had $3.5 million of outstanding standby letters of credit and $96.5 million of remaining borrowing capacity available under the revolving credit facility, which matures on October 23, 2023. No amounts were outstanding under the revolving credit facility as of July 2, 2022 and January 1, 2022.

We are required to pay a quarterly commitment fee ranging from 0.25% to 0.50% on the daily unused amount of the commitment under the revolving credit facility based upon the leverage ratio defined in the agreement and certain criteria specified in the agreement. We are also required to pay fronting fees and other customary fees for letters of credit issued under the revolving credit facility. The interest rate for the revolving credit facility is determined based on a formula using certain market rates.

Debt Covenants

The First Lien Credit Agreement contains certain customary representations and warranties, subject to limitations and exceptions, and affirmative and customary covenants. The First Lien Credit Agreement restricts us from entering into certain types of transactions and making certain types of payments including dividends and stock repurchase and other similar distributions, with certain exceptions. Additionally, borrowing availability under the revolving credit facility under our First Lien Credit Agreement is subject to a first lien secured leverage ratio (as defined in the First Lien Credit Agreement) of 7.00 to 1.00.

As of July 2, 2022, we were in compliance with all applicable financial covenant requirements for our First Lien Credit Agreement.

Schedule of Principal Maturities

Principal maturities of debt as of July 2, 2022 are as follows (amounts in thousands):


Remainder of fiscal 2022	$	—
Fiscal 2023	—
Fiscal 2024	—
Fiscal 2025	385,000
Fiscal 2026	—
Thereafter	—
Total	$	385,000

Interest Expense, Net

Interest expense, net, consisted of the following (amounts in thousands):


	13 Weeks Ended				26 Weeks Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Interest on loans	$	3,789	$	3,466	$	7,320	$	6,965
Amortization of debt issuance costs and debt discounts	562		627		1,190		1,255
Interest on finance leases	94		97		184		190
Other	—		3		—		6
Interest income	(570)		(271)		(1,137)		(588)
Interest expense, net	$	3,875	$	3,922	$	7,557	$	7,828

Loss on Debt Extinguishment

Loss on debt extinguishment consisted of the following (amounts in thousands):


	13 Weeks Ended				26 Weeks Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Write off of debt issuance costs	$	1,127	$	—	$	1,127	$	—

Write off of debt discounts	147		—		147		—
Loss on debt extinguishment	$	1,274	$	—	$	1,274	$	—

Stockholders' Equity	6 Months Ended
Stockholders' Equity	Jul. 02, 2022
Equity [Abstract]
Stockholders' Equity	Stockholders' Equity Share Repurchase Program In November 2021, our Board of Directors approved a share repurchase program. This program, effective November 5, 2021 and without an expiration date, authorized us to repurchase up to $100.0 million of our outstanding common stock utilizing a variety of methods including open-market purchases, accelerated share repurchase programs, privately negotiated transactions, structured repurchase transactions and under a Rule 10b5-1 plan (which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under securities laws). Any repurchased shares are constructively retired and returned to an unissued status. During the 13 weeks ended July 2, 2022, we did not repurchase any shares of common stock. During the 26 weeks ended July 2, 2022, we repurchased 139,718 shares of common stock totaling $3.5 million, including commissions, at an average price of $24.70 per share in open-market transactions pursuant to a Rule 10b5-1 plan. As of July 2, 2022, we had $96.5 million of repurchase authority remaining under the share repurchase program.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Share-based Awards

6 Months Ended

Jul. 02, 2022

Share-Based Payment Arrangement [Abstract]

Share-based Awards

For a discussion of our share-based incentive plans, refer to Note 8 of our 2021 Form 10-K.

Share-based Award Activity

The following table summarizes stock option activity under all equity incentive plans during the 26 weeks ended July 2, 2022:


	Time-Based Stock Options			Performance-Based Stock Options
	Number of Options	Weighted-Average Exercise Price		Number of Options	Weighted-Average Exercise Price
Options outstanding as of January 1, 2022	3,135,141	$	12.77	1,696,194	$	4.58

Exercised	(158,593)	10.18		(501,195)	4.40
Forfeitures	(27,672)	20.24		—	—
Options outstanding as of July 2, 2022	2,948,876	$	12.84	1,194,999	$	4.66
Options vested and exercisable as of July 2, 2022	1,782,983	$	7.46	1,194,999	$	4.66

The following table summarizes restricted stock unit ("RSU") activity under all equity incentive plans during the 26 weeks ended July 2, 2022:


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested balance as of January 1, 2022	836,496	$	30.14
Granted	432,578	29.22
Vested	(183,113)	35.98
Forfeitures	(47,854)	30.42
Unvested balance as of July 2, 2022	1,038,107	$	28.71

The following table summarizes performance-based restricted stock unit ("PSU") activity under the Grocery Outlet Holding Corp. 2019 Incentive Plan during the 26 weeks ended July 2, 2022:


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested balance as of January 1, 2022	576,725	$	36.36
Granted (1)	400,774	29.03
Adjustment for expected performance achievement (2)	205,829	31.61

Forfeitures	(45,169)	35.46
Unvested balance as of July 2, 2022 (3)	1,138,159	$	32.96

_______________________

(1)Represents initial grant of PSUs based on performance target level achievement of 100%.

(2)Represents the adjustment to previously granted PSUs based on performance expectations as of July 2, 2022.

(3)An additional 672,303 PSUs could potentially be included if the maximum performance level of 200% is reached for all PSUs outstanding as of July 2, 2022.

Share-based Compensation Expense

We recognize compensation expense for stock options, RSUs and PSUs by amortizing the grant date fair value on a straight-line basis over the expected vesting period to the extent we determine the vesting of the grant is probable. We recognize share-based award forfeitures in the period such forfeitures occur.

Share-based compensation expense consisted of the following (amounts in thousands):


	13 Weeks Ended				26 Weeks Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Time-based stock options	$	559	$	315	$	1,017	$	1,037

RSUs	4,197		1,917		7,522		3,413
PSUs	4,702		1,886		6,707		3,602
Dividends (1)	26		92		33		97
Share-based compensation expense	$	9,484	$	4,210	$	15,279	$	8,149

_______________________

(1)Represents cash dividends paid upon vesting of share-based awards as a result of dividends declared in connection with recapitalizations that occurred in fiscal 2018 and 2016.

Income Taxes

6 Months Ended

Jul. 02, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Our income tax expense and effective income tax rate were as follows (amounts in thousands, except percentages):


	13 Weeks Ended						26 Weeks Ended
	July 2, 2022			July 3, 2021			July 2, 2022			July 3, 2021
Income tax expense	$	1,668		$	4,082		$	5,840		$	5,131
Effective income tax rate	7.7		%	17.2		%	15.6		%	11.8		%

The Company's tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete events arising in each respective quarter. During each interim period, the Company updates the estimated annual effective tax rate. Our effective income tax rate for the 13 and 26 weeks ended July 2, 2022 was lower than the combined U.S. federal and state statutory income tax rate primarily due to excess tax benefits related to the exercise of stock options and vesting of RSUs. The decrease in our effective income tax rate for the 13 weeks ended July 2, 2022 compared to the 13 weeks ended July 3, 2021 was primarily due to an increase in discrete items related to the exercise of stock options and vesting of RSUs while the increase in our effective income tax rate for the 26 weeks ended July 2, 2022 compared to the 26 weeks ended July 3, 2021 was primarily due to a reduction in discrete items related to the exercise of stock options and vesting of RSUs.

Our policy is to recognize interest and penalties associated with uncertain tax positions as part of the income tax provision and include accrued interest and penalties with the related income tax liability on our condensed consolidated balance sheets. To date, we have not recognized any interest and penalties in our condensed consolidated statements of operations and comprehensive income, nor have we accrued for or made payments for interest and penalties. We had no

uncertain tax positions as of July 2, 2022 and January 1, 2022, respectively, and do not anticipate any changes to our uncertain tax positions within the next 12 months.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Related Party Transactions	6 Months Ended
Related Party Transactions	Jul. 02, 2022
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions Related Party Leases As of July 2, 2022 and July 3, 2021, we leased 15 store locations and one warehouse location from entities in which Eric Lindberg, Jr., Chief Executive Officer, and MacGregor Read, Jr., Vice Chairman of our Board of Directors, or their respective families, had a direct or indirect financial interest. As of July 2, 2022, the right-of-use assets and lease liabilities related to these properties was $42.1 million and $46.9 million, respectively. As of January 1, 2022, the right-of-use assets and lease liabilities related to these properties was $36.9 million and $41.6 million, respectively. These related parties received aggregate lease payments from us of $1.8 million and $1.5 million for the 13 weeks ended July 2, 2022 and July 3, 2021, respectively, and $3.4 million and $3.0 million for the 26 weeks ended July 2, 2022 and July 3, 2021, respectively. Independent Operator Notes and Independent Operator Receivables We offer interest-bearing notes to IOs and the gross amount of IO operating notes and IO receivables due was $43.0 million and $40.6 million as of July 2, 2022 and January 1, 2022, respectively. See Note 2 for additional information.

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jul. 02, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies We are involved from time to time in claims, proceedings and litigation arising in the normal course of business. We establish an accrual for legal proceedings if and when those matters reach a stage where they present loss contingencies that are both probable and reasonably estimable. In such cases, there may be a possible exposure to loss in excess of any amounts accrued. We monitor those matters for developments that would affect the likelihood of a loss and the accrued amount, if any, thereof, and adjust the amount as appropriate. If the loss contingency at issue is not both probable and reasonably estimable, we do not establish an accrual, but will continue to monitor the matter for developments that will make the loss contingency both probable and reasonably estimable. If it is at least a reasonable possibility that a material loss will occur, the Company will provide disclosure regarding the contingency. Management believes that we do not have any pending litigation that, separately or in the aggregate, would have a material adverse effect on our results of operations, financial condition or cash flows.

Earnings Per Share

6 Months Ended

Jul. 02, 2022

Earnings Per Share [Abstract]

Earnings Per Share

The following table sets forth the calculation of basic and diluted earnings per share (amounts in thousands, except per share data):


	13 Weeks Ended				26 Weeks Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Numerator
Net income and comprehensive income	$	20,094	$	19,640	$	31,668	$	38,532
Denominator
Weighted-average shares outstanding – basic	96,578		95,724		96,358		95,449
Effect of dilutive options	3,140		3,783		3,091		4,023
Effect of dilutive RSUs	422		97		339		115
Weighted-average shares outstanding – diluted (1)	100,140		99,604		99,788		99,587
Earnings per share:
Basic	$	0.21	$	0.21	$	0.33	$	0.40
Diluted	$	0.20	$	0.20	$	0.32	$	0.39

_______________________

(1)We are required to include in diluted weighted-average shares outstanding contingently issuable shares that would be issued assuming the end of our reporting period was the end of the relevant PSU award contingency period. No PSUs were included in diluted weighted-average shares outstanding for the 13 and 26 weeks ended July 2, 2022 and July 3, 2021.

The following weighted-average common share equivalents were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive (amounts in thousands):

13 Weeks Ended

26 Weeks Ended

July 2,
2022

July 3,
2021

July 2,
2022

July 3,
2021

RSUs

—

173

Organization and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jul. 02, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the applicable rules and regulations of the United States ("U.S.") Securities and Exchange Commission (the "SEC") for interim reporting. Certain information and note disclosures included in our annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (the "2021 Form 10-K"). The condensed consolidated balance sheet as of January 1, 2022 included herein has been derived from those audited consolidated financial statements.
Consolidation	Our unaudited condensed consolidated financial statements include the accounts of Grocery Outlet Holding Corp. and its wholly owned subsidiaries. All intercompany balances and transactions were eliminated. In the opinion of management, these condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the periods presented.
Reclassification	Certain prior period amounts in the notes to the condensed consolidated financial statements have been reclassified to conform to the current period presentation. The reclassification of these items had no impact on net income, earnings per share, or retained earnings in the current or prior period.
Use of Estimates	The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results can differ from these estimates depending upon certain risks and uncertainties. Changes in these estimates are recorded when known.
Segment Reporting	We manage our business as one operating segment. In addition, all of our sales were made to customers located in the U.S. and all property and equipment is located in the U.S.
Merchandise Inventories	Merchandise inventories are valued at the lower of cost or net realizable value. Cost is determined by the weighted-average cost method for warehouse inventories and the retail inventory method for store inventories. We provide for estimated inventory losses between physical inventory counts based on historical averages. This provision is adjusted periodically to reflect the actual shrink results of the physical inventory counts.
Leases	We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets, current lease liabilities, and long-term lease liabilities on our condensed consolidated balance sheets. Finance leases are included in other assets, current lease liabilities, and long-term lease liabilities on our condensed consolidated balance sheets. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease over the same term. Right-of-use assets and liabilities are recognized at commencement date based on the present value of the lease payments over the lease term, reduced by landlord incentives. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate, which is estimated to approximate the interest rate on a collateralized basis with similar terms and payments based on the information available at the commencement date, to determine the present value of our lease payments. Lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that we will exercise the option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term while finance lease payments are charged to interest expense and depreciation and amortization expense over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet; lease expense for these short-term leases is recognized on a straight-line basis over the lease term.We generally lease retail facilities for store locations, distribution centers, office space and equipment and account for these leases as operating leases. We account for one retail store lease and certain equipment leases as finance leases. Lease and non-lease components are accounted for separately. We sublease certain real estate to unrelated third parties under non-cancelable leases and the sublease portfolio consists of operating leases for retail stores.
Fair Value Measurements	Fair value is defined as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value of financial instruments is categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is measured using inputs from the three levels of the fair value hierarchy, which are described as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities Level 2 — Quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 — Unobservable inputs in which there is little or no market data, which requires us to develop our own assumptions when pricing the financial instruments, such as cash flow modeling assumptions The assets' or liabilities' fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The fair value framework requires that we maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There were no assets or liabilities measured at fair value on a recurring or non-recurring basis as of July 2, 2022 or January 1, 2022. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. There were no transfers of assets or liabilities between levels within the fair value hierarchy during the 26 weeks ended July 2, 2022. Our financial assets and liabilities are carried at cost, which generally approximates their fair value, as described below: Cash and cash equivalents, independent operator ("IO") receivables, other accounts receivable and accounts payable — The carrying value of such financial instruments approximates their fair value due to factors such as their short-term nature or their variable interest rates. IO notes receivable (net) — The carrying value of such financial instruments approximates their fair value due to the effect of the related allowance for expected credit losses.
Revenue Recognition	Net Sales — We recognize revenue from the sale of products at the point of sale, net of any taxes or deposits collected and remitted to governmental authorities. For e-commerce related sales in which a third-party provides home delivery service, revenue is recognized upon delivery to the customer. Our performance obligations are satisfied upon the transfer of goods to the customer, at the point of sale, and payment from customers is also due at the time of sale. Discounts provided to customers by us are recognized at the time of sale as a reduction in net sales as the products are sold. Discounts provided by IOs are not recognized as a reduction in net sales as these are provided solely by the IO who bears the incremental costs arising from the discount. We do not accept manufacturer coupons. We do not have any material contract assets or receivables from contracts with customers, any revenue recognized in the current year from performance obligations satisfied in previous periods, any performance obligations, or any material costs to obtain or fulfill a contract as of July 2, 2022 and January 1, 2022. Gift Cards — We record a deferred revenue liability when a Grocery Outlet gift card is sold. Revenue related to gift cards is recognized as the gift cards are redeemed, which is when we have satisfied our performance obligation. While gift cards are generally redeemed within 12 months, some are never fully redeemed. We reduce the liability and recognize revenue for the unused portion of the gift cards ("breakage") under the proportional method, where recognition of breakage income is based upon the historical run-off rate of unredeemed gift cards.
Variable interest Entities	In accordance with the variable interest entities sub-section of Accounting Standards Codification ("ASC") Topic 810, Consolidation, we assess at each reporting period whether we, or any consolidated entity, are considered the primary beneficiary of a variable interest entity ("VIE") and therefore required to consolidate the financial results of the VIE in our consolidated financial statements. Determining whether to consolidate a VIE may require judgment in assessing (i) whether an entity is a VIE, and (ii) if a reporting entity is a VIE's primary beneficiary. A reporting entity is determined to be a VIE's primary beneficiary if it has the power to direct the activities that most significantly impact a VIE's economic performance and the obligation to absorb losses or rights to receive benefits that could potentially be significant to a VIE. We had 421, 411 and 396 stores operated by IOs as of July 2, 2022, January 1, 2022 and July 3, 2021, respectively. We have agreements in place with each IO. The IO orders merchandise exclusively from us which is provided to the IO on consignment. Under the Independent Operator Agreement (the "Operator Agreement"), the IO selects a majority of merchandise that we consign to the IO, which the IO chooses from our merchandise order guide according to the IO's knowledge and experience with local customer purchasing trends, preferences, historical sales and similar factors. The Operator Agreement gives the IO discretion to adjust our initial prices if the overall effect of all price changes at any time comports with the reputation of our Grocery Outlet retail stores for selling quality, name-brand consumables and fresh products and other merchandise at extreme discounts. IOs are required to furnish initial working capital and to acquire certain store and safety assets. The IO is also required to hire, train and employ a properly trained workforce sufficient in number to enable the IO to fulfill its obligations under the Operator Agreement. Additionally, the IO is responsible for expenses required for business operations, including all labor costs, utilities, credit card processing fees, supplies, taxes, fines, levies and other expenses. Either party may terminate the Operator Agreement without cause upon 75 days' notice. As consignor of all merchandise to each IO, the aggregate net sales proceeds from merchandise sales belongs to us. Net sales related to IO stores were $883.0 million and $762.1 million for the 13 weeks ended July 2, 2022 and July 3, 2021, respectively, and $1.70 billion and $1.50 billion for the 26 weeks ended July 2, 2022 and July 3, 2021, respectively. We, in turn, pay IOs a commission based on a share of the gross profit of the store. Inventories and related net sales proceeds are our property, and we are responsible for store rent and related occupancy costs. IO commissions were expensed and included in SG&A. IO commissions were $136.5 million and $115.4 million for the 13 weeks ended July 2, 2022 and July 3, 2021, respectively, and $259.2 million and $228.1 million for the 26 weeks ended July 2, 2022 and July 3, 2021, respectively. IO commissions of $9.9 million and $9.1 million were included in accrued expenses as of July 2, 2022 and January 1, 2022, respectively. IOs may fund their initial store investment from existing capital, a third-party loan or most commonly through a loan from us, as further discussed in Note 2. As collateral for IO obligations and performance, the Operator Agreements grant us the security interests in the assets owned by the IOs related to the respective store. Since the total investment at risk associated with each IO is not sufficient to permit each IO to finance its activities without additional subordinated financial support, the IOs are VIEs which we have variable interests in. To determine if we are the primary beneficiary of these VIEs, we evaluate whether we have (i) the power to direct the activities that most significantly impact the IO's economic performance and (ii) the obligation to absorb losses or the right to receive benefits of the IO that could potentially be significant to the IO. Our evaluation includes identification of significant activities and an assessment of the IO's ability to direct those activities. Activities that most significantly impact the IO's economic performance relate to sales and labor. Sales activities that significantly impact the IO's economic performance include determining what merchandise the IO will order and sell and the price of such merchandise, both of which the IO controls. The IO is also responsible for all of their own labor. Labor activities that significantly impact the IO's economic performance include hiring, training, supervising, directing, compensating (including wages, salaries and employee benefits) and terminating all of the employees of the IO, activities which the IO controls. Accordingly, the IO has the power to direct the activities that most significantly impact the IO's economic performance. Furthermore, the mutual termination rights associated with the Operator Agreements illustrate the lack of ultimate control over the IO. Therefore, the Company is not the primary beneficiary of these VIEs.
Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements	Recently Adopted Accounting Standards No recently adopted accounting pronouncements had a material effect on our condensed consolidated financial statements. Recently Issued Accounting Pronouncements Accounting Standards Update ("ASU") No. 2022-02 — In March 2022, the Financial Accounting Standards Board issued ASU No. 2022-02, Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"). ASU 2022-02 eliminates the accounting guidance on troubled debt restructurings for creditors in ASC Topic 310 and amends the guidance on "vintage disclosures" to require disclosure of current-period gross write-offs by year of origination. ASU 2022-02 also updates the requirements related to accounting for credit losses under ASC Topic 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We will adopt ASU 2022-02 beginning in the first quarter of fiscal 2023. We do not expect the adoption of ASU 2022-02 to have a material impact on our consolidated financial statements.
Income Tax	Our policy is to recognize interest and penalties associated with uncertain tax positions as part of the income tax provision and include accrued interest and penalties with the related income tax liability on our condensed consolidated balance sheets. To date, we have not recognized any interest and penalties in our condensed consolidated statements of operations and comprehensive income, nor have we accrued for or made payments for interest and penalties.

Organization and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jul. 02, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Carrying Amount and Estimated Fair Values of Financial Liabilities


	July 2, 2022				January 1, 2022
	Carrying Amount (1)		Estimated Fair Value (2)		Carrying Amount (1)		Estimated Fair Value (2)
Financial Liabilities:
Senior term loan (Level 2)	$	378,794	$	366,713	$	451,468	$	457,700

_______________________

Schedule of Sales Revenue by Product

The following table presents net sales revenue by type of product for the periods indicated (amounts in thousands):


	13 Weeks Ended				26 Weeks Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Perishable (1)	$	325,540	$	270,856	$	626,382	$	532,274
Non-perishable (2)	572,119		504,679		1,102,704		995,727
Total net sales	$	897,659	$	775,535	$	1,729,086	$	1,528,001

_______________________

(1) Perishable departments include dairy and deli; produce and floral; and fresh meat and seafood.

(2) Non-perishable departments include non-perishable grocery; general merchandise; health and beauty care; frozen foods; and beer and wine.

Independent Operator Notes and Independent Operator Receivables (Tables)

6 Months Ended

Jul. 02, 2022

Receivables [Abstract]

Schedule of Amounts Due from Independent Operators

Amounts due from IOs and the related allowances as of July 2, 2022 and January 1, 2022 consisted of the following (amounts in thousands):


			Allowance						Current Portion		Long-term Portion
	Gross		Current Portion		Long-term Portion		Net
July 2, 2022
Independent operator notes	$	35,331	$	(682)	$	(11,212)	$	23,437	$	1,701	$	21,736
Independent operator receivables	7,637		(1,203)		—		6,434		6,434		—
Total	$	42,968	$	(1,885)	$	(11,212)	$	29,871	$	8,135	$	21,736


			Allowance						Current Portion		Long-term Portion
	Gross		Current Portion		Long-term Portion		Net
January 1, 2022
Independent operator notes	$	34,221	$	(811)	$	(10,506)	$	22,904	$	1,388	$	21,516
Independent operator receivables	6,426		(595)		—		5,831		5,831		—
Total	$	40,647	$	(1,406)	$	(10,506)	$	28,735	$	7,219	$	21,516

Schedule of Allowance for Credit Loss Activity

A summary of activity in the IO notes and IO receivables allowance was as follows (amounts in thousands):


	13 Weeks Ended				26 Weeks Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Beginning balance	$	12,547	$	9,003	$	11,912	$	8,109
Provision for IO notes and IO receivables	808		1,400		2,015		2,300

Write-off of provision for IO notes and IO receivables	(258)		(226)		(830)		(232)
Ending Balance	$	13,097	$	10,177	$	13,097	$	10,177

Schedule of Independent Operator Notes by Credit Quality Indicators and Year of Origination

The following table presents the amortized cost basis of IO notes by year of origination and credit quality indicator as of July 2, 2022 (amounts in thousands):


Credit Quality Indicator	2022 (YTD)		2021		2020		2019		2018		Prior		Total
TCAP	$	1,996	$	2,818	$	3,579	$	1,341	$	773	$	566	$	11,073
Non-TCAP	2,831		3,386		3,864		2,840		1,668		1,073		15,662
New store	2,970		5,481		145		—		—		—		8,596
Total	$	7,797	$	11,685	$	7,588	$	4,181	$	2,441	$	1,639	$	35,331

Long-term Debt (Tables)

6 Months Ended

Jul. 02, 2022

Debt Disclosure [Abstract]

Schedule of Long-term Debt

Long-term debt consisted of the following (amounts in thousands):


	July 2, 2022		January 1, 2022
First Lien Credit Agreement:
Senior term loan	$	385,000	$	460,000


Long-term debt, gross	385,000		460,000
Less: Unamortized debt issuance costs and debt discounts	(6,206)		(8,532)


Long-term debt, net	$	378,794	$	451,468

Principal Maturities of Debt

Principal maturities of debt as of July 2, 2022 are as follows (amounts in thousands):


Remainder of fiscal 2022	$	—
Fiscal 2023	—
Fiscal 2024	—
Fiscal 2025	385,000
Fiscal 2026	—
Thereafter	—
Total	$	385,000

Schedule of Interest Expense, Net

Interest expense, net, consisted of the following (amounts in thousands):


	13 Weeks Ended				26 Weeks Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Interest on loans	$	3,789	$	3,466	$	7,320	$	6,965
Amortization of debt issuance costs and debt discounts	562		627		1,190		1,255
Interest on finance leases	94		97		184		190
Other	—		3		—		6
Interest income	(570)		(271)		(1,137)		(588)
Interest expense, net	$	3,875	$	3,922	$	7,557	$	7,828

Debt extinguishment and modification cost

Loss on debt extinguishment consisted of the following (amounts in thousands):


	13 Weeks Ended				26 Weeks Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Write off of debt issuance costs	$	1,127	$	—	$	1,127	$	—

Write off of debt discounts	147		—		147		—
Loss on debt extinguishment	$	1,274	$	—	$	1,274	$	—

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e24072-122690

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI https://asc.fasb.org/extlink&oid=124435984&loc=d3e28541-108399

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21506-112644

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 55
-Paragraph 69B
-URI https://asc.fasb.org/extlink&oid=123466577&loc=SL123495735-112612

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI https://asc.fasb.org/extlink&oid=124435984&loc=d3e28551-108399

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 55
-Paragraph 69E
-URI https://asc.fasb.org/extlink&oid=123466577&loc=SL123495743-112612

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21521-112644

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21538-112644

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=123599511&loc=d3e64711-112823

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21475-112644

+ Details

Share-based Awards (Tables)

6 Months Ended

Jul. 02, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Option Activity

The following table summarizes stock option activity under all equity incentive plans during the 26 weeks ended July 2, 2022:


	Time-Based Stock Options			Performance-Based Stock Options
	Number of Options	Weighted-Average Exercise Price		Number of Options	Weighted-Average Exercise Price
Options outstanding as of January 1, 2022	3,135,141	$	12.77	1,696,194	$	4.58

Exercised	(158,593)	10.18		(501,195)	4.40
Forfeitures	(27,672)	20.24		—	—
Options outstanding as of July 2, 2022	2,948,876	$	12.84	1,194,999	$	4.66
Options vested and exercisable as of July 2, 2022	1,782,983	$	7.46	1,194,999	$	4.66

Schedule of RSU Activity

The following table summarizes restricted stock unit ("RSU") activity under all equity incentive plans during the 26 weeks ended July 2, 2022:


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested balance as of January 1, 2022	836,496	$	30.14
Granted	432,578	29.22
Vested	(183,113)	35.98
Forfeitures	(47,854)	30.42
Unvested balance as of July 2, 2022	1,038,107	$	28.71

Schedule of PSU Activity

The following table summarizes performance-based restricted stock unit ("PSU") activity under the Grocery Outlet Holding Corp. 2019 Incentive Plan during the 26 weeks ended July 2, 2022:


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested balance as of January 1, 2022	576,725	$	36.36
Granted (1)	400,774	29.03
Adjustment for expected performance achievement (2)	205,829	31.61

Forfeitures	(45,169)	35.46
Unvested balance as of July 2, 2022 (3)	1,138,159	$	32.96

_______________________

(1)Represents initial grant of PSUs based on performance target level achievement of 100%.

(2)Represents the adjustment to previously granted PSUs based on performance expectations as of July 2, 2022.

(3)An additional 672,303 PSUs could potentially be included if the maximum performance level of 200% is reached for all PSUs outstanding as of July 2, 2022.

Summary of Share-Based Compensation Expense

Share-based compensation expense consisted of the following (amounts in thousands):


	13 Weeks Ended				26 Weeks Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Time-based stock options	$	559	$	315	$	1,017	$	1,037

RSUs	4,197		1,917		7,522		3,413
PSUs	4,702		1,886		6,707		3,602
Dividends (1)	26		92		33		97
Share-based compensation expense	$	9,484	$	4,210	$	15,279	$	8,149

_______________________

(1)Represents cash dividends paid upon vesting of share-based awards as a result of dividends declared in connection with recapitalizations that occurred in fiscal 2018 and 2016.

Income Taxes (Tables)

6 Months Ended

Jul. 02, 2022

Income Tax Disclosure [Abstract]

Schedule of Income Tax Expense (Benefit) and Effective Tax Rate

Our income tax expense and effective income tax rate were as follows (amounts in thousands, except percentages):


	13 Weeks Ended						26 Weeks Ended
	July 2, 2022			July 3, 2021			July 2, 2022			July 3, 2021
Income tax expense	$	1,668		$	4,082		$	5,840		$	5,131
Effective income tax rate	7.7		%	17.2		%	15.6		%	11.8		%

Earnings Per Share (Tables)

6 Months Ended

Jul. 02, 2022

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the calculation of basic and diluted earnings per share (amounts in thousands, except per share data):


	13 Weeks Ended				26 Weeks Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Numerator
Net income and comprehensive income	$	20,094	$	19,640	$	31,668	$	38,532
Denominator
Weighted-average shares outstanding – basic	96,578		95,724		96,358		95,449
Effect of dilutive options	3,140		3,783		3,091		4,023
Effect of dilutive RSUs	422		97		339		115
Weighted-average shares outstanding – diluted (1)	100,140		99,604		99,788		99,587
Earnings per share:
Basic	$	0.21	$	0.21	$	0.33	$	0.40
Diluted	$	0.20	$	0.20	$	0.32	$	0.39

_______________________

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following weighted-average common share equivalents were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive (amounts in thousands):

13 Weeks Ended

26 Weeks Ended

July 2,
2022

July 3,
2021

July 2,
2022

July 3,
2021

RSUs

—

173

Organization and Summary of Significant Accounting Policies - Narrative (Details)	3 Months Ended		6 Months Ended
	Jul. 02, 2022 USD ($) store retailStoreLease	Jul. 03, 2021 USD ($) store	Jul. 02, 2022 USD ($) store segment retailStoreLease	Jul. 03, 2021 USD ($) store	Jan. 01, 2022 USD ($) store
Subsidiary, Sale of Stock [Line Items]
Number of stores \| store	425		425
Number of reportable segments (in segments) \| segment			1
Number of operating segments (in segments) \| segment			1
Number of leases \| retailStoreLease	1		1
Gift card, redemption period			12 months
Contract with customer, liability	$ 2,800,000		$ 2,800,000		$ 3,600,000
Variable interest entity, number of stores \| store	421	396	421	396	411
Net sales	$ 897,659,000	$ 775,535,000	$ 1,729,086,000	$ 1,528,001,000
Variable Interest Entity, Not Primary Beneficiary
Subsidiary, Sale of Stock [Line Items]
Net sales	883,000,000	762,100,000	1,700,000,000	1,500,000,000
Sales commissions and fees	136,500,000	$ 115,400,000	259,200,000	$ 228,100,000
Accrued expenses	9,900,000		9,900,000		$ 9,100,000
Maximum loss exposure	$ 43,000,000		$ 43,000,000		$ 40,600,000

Organization and Summary of Significant Accounting Policies - Fair Value of Financial Liabilities (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Jan. 01, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Unamortized debt discount	$ 700	$ 1,000
Debt issuance costs	5,500	7,500
Fair Value, Inputs, Level 2 \| Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior term loan (Level 2)	378,794	451,468
Fair Value, Inputs, Level 2 \| Estimated Fair Values
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior term loan (Level 2)	$ 366,713	$ 457,700

Organization and Summary of Significant Accounting Policies - Disaggregated Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Disaggregation of Revenue [Line Items]
Sales	$ 897,659	$ 775,535	$ 1,729,086	$ 1,528,001
Perishable
Disaggregation of Revenue [Line Items]
Sales	325,540	270,856	626,382	532,274
Non-Perishable
Disaggregation of Revenue [Line Items]
Sales	$ 572,119	$ 504,679	$ 1,102,704	$ 995,727

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Independent Operator Notes and Independent Operator Receivables - Narrative (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jan. 01, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Accrued interest receivable	$ 0.7	$ 0.5
Minimum
Financing Receivable, Allowance for Credit Loss [Line Items]
Independent operator notes, stated interest rate	3.00%
Maximum
Financing Receivable, Allowance for Credit Loss [Line Items]
Independent operator notes, stated interest rate	9.95%

Independent Operator Notes and Independent Operator Receivables - Amounts Due From Independent Operators and the Related Allowances and Accruals for Estimated Losses (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Jan. 01, 2022
Independent operator notes
Gross	$ 35,331	$ 34,221
Allowance, Current Portion	(682)	(811)
Allowance, Long-term Portion	(11,212)	(10,506)
Net	23,437	22,904
Current Portion	1,701	1,388
Long-term Portion	21,736	21,516
Independent operator receivables
Gross	7,637	6,426
Allowance, Current Portion	(1,203)	(595)
Allowance, Long-Term Portion	0	0
Net	6,434	5,831
Current Portion	6,434	5,831
Long-term Portion	0	0
Total
Gross	42,968	40,647
Allowance, Current Portion	(1,885)	(1,406)
Allowance, Long-Term Portion	(11,212)	(10,506)
Net	29,871	28,735
Current Portion	8,135	7,219
Long-term Portion	$ 21,736	$ 21,516

Independent Operator Notes and Independent Operator Receivables - Allowance for Credit Loss (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Accounts And Financing Receivable, Allowance For Credit Loss [Roll Forward]
Beginning balance	$ 12,547	$ 9,003	$ 11,912	$ 8,109
Provision for IO notes and IO receivables	808	1,400	2,015	2,300
Write-off of provision for IO notes and IO receivables	(258)	(226)	(830)	(232)
Ending Balance	$ 13,097	$ 10,177	$ 13,097	$ 10,177

Independent Operator Notes and Independent Operator Receivables - Credit Quality Indicators (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Jan. 01, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
2022 (YTD)	$ 7,797
2021	11,685
2020	7,588
2019	4,181
2018	2,441
Prior	1,639
Total	35,331	$ 34,221
TCAP
Financing Receivable, Credit Quality Indicator [Line Items]
2022 (YTD)	1,996
2021	2,818
2020	3,579
2019	1,341
2018	773
Prior	566
Total	11,073
Non-TCAP
Financing Receivable, Credit Quality Indicator [Line Items]
2022 (YTD)	2,831
2021	3,386
2020	3,864
2019	2,840
2018	1,668
Prior	1,073
Total	15,662
New store
Financing Receivable, Credit Quality Indicator [Line Items]
2022 (YTD)	2,970
2021	5,481
2020	145
2019	0
2018	0
Prior	0
Total	$ 8,596

Long-term Debt - Schedule of Long-term Debt (Details) - USD ($)	Jul. 02, 2022	Jan. 01, 2022
Debt Instrument [Line Items]
Long-term debt, gross	$ 385,000,000	$ 460,000,000
Less: Unamortized debt issuance costs and debt discounts	(6,206,000)	(8,532,000)
Long-term debt, net	378,794,000	451,468,000
Senior Notes \| First Lien Credit Agreement
Debt Instrument [Line Items]
Long-term debt, gross	$ 385,000,000	$ 460,000,000

Long-term Debt - Narrative (Details) - USD ($)		3 Months Ended		6 Months Ended
Long-term Debt - Narrative (Details) - USD ($)	Apr. 29, 2022	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021	Jan. 01, 2022
Debt Instrument [Line Items]
Long-term debt, gross		$ 385,000,000		$ 385,000,000		$ 460,000,000
Repayments of senior debt				75,000,000	$ 0
Write off of debt issuance costs		1,127,000	$ 0	1,127,000	$ 0
First Lien Credit Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity		100,000,000		100,000,000
Remaining borrowing capacity		96,500,000		96,500,000
Outstanding debt		$ 0		$ 0		0
Secured leverage ratio		7.00		7.00
First Lien Credit Agreement \| Revolving Credit Facility \| Minimum
Debt Instrument [Line Items]
Commitment fee percentage				0.25%
First Lien Credit Agreement \| Revolving Credit Facility \| Maximum
Debt Instrument [Line Items]
Commitment fee percentage				0.50%
First Lien Credit Agreement \| Letter of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 35,000,000		$ 35,000,000
First Lien Credit Agreement \| Bridge Loan
Debt Instrument [Line Items]
Maximum borrowing capacity		20,000,000		20,000,000
First Lien Credit Agreement \| Standby Letters of Credit
Debt Instrument [Line Items]
Letters of credit outstanding		3,500,000		3,500,000
First Lien Credit Agreement \| Senior Notes
Debt Instrument [Line Items]
Long-term debt, gross		$ 385,000,000		$ 385,000,000		$ 460,000,000
Repayments of senior debt	$ 75,000,000
Write off of debt issuance costs	$ 1,300,000
Effective interest rate		4.42%		4.42%
First Lien Credit Agreement \| Senior Notes \| Eurodollar
Debt Instrument [Line Items]
Basis spread on variable rate				2.75%
First Lien Credit Agreement \| Senior Notes \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate				1.75%

Long-term Debt - Schedule of Principal Maturities (Details) $ in Thousands	Jul. 02, 2022 USD ($)
Debt Disclosure [Abstract]
Remainder of fiscal 2022	$ 0
Fiscal 2023	0
Fiscal 2024	0
Fiscal 2025	385,000
Fiscal 2026	0
Thereafter	0
Total	$ 385,000

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Long-term Debt - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Debt Disclosure [Abstract]
Interest on loans	$ 3,789	$ 3,466	$ 7,320	$ 6,965
Amortization of debt issuance costs and debt discounts	562	627	1,190	1,255
Interest on finance leases	94	97	184	190
Other	0	3	0	6
Interest income	(570)	(271)	(1,137)	(588)
Interest expense, net	$ 3,875	$ 3,922	$ 7,557	$ 7,828

Long-term Debt - Loss on Debt Extinguishment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Debt Disclosure [Abstract]
Write off of debt issuance costs	$ 1,127	$ 0	$ 1,127	$ 0
Write off of debt discounts	147	0	147	0
Loss on debt extinguishment	$ 1,274	$ 0	$ 1,274	$ 0

Stockholders' Equity (Details) - USD ($)	6 Months Ended
Stockholders' Equity (Details) - USD ($)	Jul. 02, 2022	Nov. 05, 2021
Subsidiary, Sale of Stock [Line Items]
Repurchase of common stock (in shares)	139,718
Repurchase of common stock	$ 3,500,000
Average price of shares repurchased (in usd per share)	$ 24.70
Stock repurchase program, remaining authorized amount	$ 96,500,000
Maximum
Subsidiary, Sale of Stock [Line Items]
Share repurchase authorized amount		$ 100,000,000

Share-based Awards - Summary of Stock Option Activity (Details)	6 Months Ended
	Jul. 02, 2022 $ / shares shares
Time-Based Stock Options
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward]
Options outstanding, beginning balance (in shares) \| shares	3,135,141
Exercised (in shares) \| shares	(158,593)
Forfeitures (in shares) \| shares	(27,672)
Options outstanding, ending balance (in shares) \| shares	2,948,876
Options vested and exercisable (in shares) \| shares	1,782,983
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted-average exercise price, beginning balance (in usd per share) \| $ / shares	$ 12.77
Exercised (in usd per share) \| $ / shares	10.18
Forfeitures (in usd per share) \| $ / shares	20.24
Weighted-average exercise price, ending balance (in usd per share) \| $ / shares	12.84
Options vested and exercisable (in dollars per share) \| $ / shares	$ 7.46
Performance-Based Stock Options
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward]
Options outstanding, beginning balance (in shares) \| shares	1,696,194
Exercised (in shares) \| shares	(501,195)
Forfeitures (in shares) \| shares	0
Options outstanding, ending balance (in shares) \| shares	1,194,999
Options vested and exercisable (in shares) \| shares	1,194,999
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted-average exercise price, beginning balance (in usd per share) \| $ / shares	$ 4.58
Exercised (in usd per share) \| $ / shares	4.40
Forfeitures (in usd per share) \| $ / shares	0
Weighted-average exercise price, ending balance (in usd per share) \| $ / shares	4.66
Options vested and exercisable (in dollars per share) \| $ / shares	$ 4.66

Share-based Awards - Summary of RSU and PSU Activity (Details)	6 Months Ended
	Jul. 02, 2022 $ / shares Rate shares
RSUs
Number of Shares
Unvested, beginning balance (in shares)	836,496
Granted (in shares)	432,578
Vested (in shares)	(183,113)
Forfeitures (in shares)	(47,854)
Unvested, ending balance (in shares)	1,038,107
Weighted-Average Grant Date Fair Value
Unvested, beginning balance (in usd per share) \| $ / shares	$ 30.14
Granted (in usd per share) \| $ / shares	29.22
Vested (in usd per share) \| $ / shares	35.98
Forfeitures (in usd per share) \| $ / shares	30.42
Unvested, ending balance (in usd per share) \| $ / shares	$ 28.71
PSUs
Number of Shares
Unvested, beginning balance (in shares)	576,725
Granted (in shares)	400,774
Adjustment for expected performance achievement (in shares)	205,829
Forfeitures (in shares)	(45,169)
Unvested, ending balance (in shares)	1,138,159
Weighted-Average Grant Date Fair Value
Unvested, beginning balance (in usd per share) \| $ / shares	$ 36.36
Granted (in usd per share) \| $ / shares	29.03
Adjustment for expected performance achievement (in usd per share) \| $ / shares	31.61
Forfeitures (in usd per share) \| $ / shares	35.46
Unvested, ending balance (in usd per share) \| $ / shares	$ 32.96
Performance target level, percentage	1
PSUs \| Pro Forma
Number of Shares
Adjustment for expected performance achievement (in shares)	672,303
PSUs \| Maximum
Weighted-Average Grant Date Fair Value
Performance target level, percentage \| Rate	200.00%

Share-based Awards - Summary of Share-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	$ 9,484	$ 4,210	$ 15,279	$ 8,149
Dividends	26	92	33	97
Time-based stock options
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	559	315	1,017	1,037
RSUs
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	4,197	1,917	7,522	3,413
PSUs
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense	$ 4,702	$ 1,886	$ 6,707	$ 3,602

Income Taxes - Income Tax Expense (Benefit) and Effective Tax Rate (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Income Tax Disclosure [Abstract]
Income tax expense	$ 1,668	$ 4,082	$ 5,840	$ 5,131
Effective income tax rate	7.70%	17.20%	15.60%	11.80%

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes - Narrative (Details) - USD ($)	Jul. 02, 2022	Jan. 01, 2022
Income Tax Disclosure [Abstract]
Unrecognized tax benefits	$ 0	$ 0

Related Party Transactions (Details) $ in Thousands	3 Months Ended		6 Months Ended
Related Party Transactions (Details) $ in Thousands	Jul. 02, 2022 USD ($)	Jul. 03, 2021 USD ($) store	Jul. 02, 2022 USD ($)	Jul. 03, 2021 USD ($) store	Jul. 02, 2022 store	Jul. 02, 2022 warehouse	Jan. 01, 2022 USD ($)	Jul. 03, 2021 warehouse
Related Party Transaction [Line Items]
Number of stores \| store					425
Operating lease right-of-use assets	$ 908,054		$ 908,054				$ 898,152
Accounts and financing receivable, before allowance for credit loss	42,968		42,968				40,647
Affiliated Entity
Related Party Transaction [Line Items]
Number of stores		15		15	15	1		1
Independent operator commissions	1,800	$ 1,500	3,400	$ 3,000
Affiliated Entity \| Related Parties
Related Party Transaction [Line Items]
Operating lease right-of-use assets	42,100		42,100				36,900
Operating lease liability	$ 46,900		$ 46,900				$ 41,600

Earnings Per Share - Earnings Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 02, 2022	Apr. 02, 2022	Jul. 03, 2021	Apr. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Numerator
Net income	$ 20,094	$ 11,574	$ 19,640	$ 18,892	$ 31,668	$ 38,532
Comprehensive income	$ 20,094	$ 11,574	$ 19,640	$ 18,892	$ 31,668	$ 38,532
Denominator
Weighted-average shares of common stock - basic (in shares)	96,578,000		95,724,000		96,358,000	95,449,000
Weighted average shares of common stock - diluted (in shares)	100,140,000		99,604,000		99,788,000	99,587,000
Earnings per share:
Basic (in usd per share)	$ 0.21		$ 0.21		$ 0.33	$ 0.40
Diluted (in usd per share)	$ 0.20		$ 0.20		$ 0.32	$ 0.39
Time-based stock options
Denominator
Effect of dilutive awards (in shares)	3,140,000		3,783,000		3,091,000	4,023,000
RSUs
Denominator
Effect of dilutive awards (in shares)	422,000		97,000		339,000	115,000
PSUs
Denominator
Effect of dilutive awards (in shares)					0	0

Earnings Per Share - Anti-dilutive Weighted-Average Common Stock Equivalents Excluded from Calculation of Diluted Earnings (Net Loss) Per Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	2	173	2