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United States securities and exchange commission logo
August 16, 2022
Charles Bracher
Chief Financial Officer
Grocery Outlet Holding Corp.
5650 Hollis Street
Emeryville, California 94608
Re: Grocery Outlet
Holding Corp.
Form 10-K for the
Fiscal Year Ended January 1, 2022
Filed March 2, 2022
Form 10-K for the
Interim Period Ended July 2, 2022
Filed August 10,
2022
File No. 001-38950
Dear Mr. Bracher:
We have limited our review of your filings to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended January 1, 2022
Operating Metrics and Non-GAAP Financial Measures
GAAP to Non-GAAP Reconciliations, page 49
1. Please explain to us
why you continue to make adjustments for "non-cash rent" and
"provision for accounts
receivable reserves" in calculating your non-GAAP financial
measures "Adjusted Net
Income" and "Adjusted EBITDA." Our understanding from our
review of your fiscal
2019 Form 10-K is that you would consider removing them effective
with the Form 10-K for
fiscal 2020.
Charles Bracher
FirstName LastNameCharles
Grocery Outlet Holding Corp.Bracher
Comapany
August 16, NameGrocery
2022 Outlet Holding Corp.
August
Page 2 16, 2022 Page 2
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Comparison of fiscal 2021 (52 weeks) to fiscal 2020 (53 weeks) , page 52
2. When two or more factors are cited as variance factors in your annual
and interim
period filings, please quantify each so investors may understand the
magnitude and
relative impact of each. In particular, you cite inflationary cost
increases and supply chain
constraints as factors affecting cost of sales as a percentage of net
sales without
quantifying either in your annual period and second quarter fiscal
2022 analyses. Refer to
section 501.04 of the staff s Codification of Financial Reporting
Policies. Also, refer
to Item 303(b)(2)(iii) of Regulation S-K in quantifying the impact of
the factors cited for
changes in comparable store sales due to each of the average
transaction size, number of
transactions and customer traffic.
Form 10-Q for the Interim Period Ended July 2, 2022
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Comparison of the 13 and 26 weeks ended July 2, 2022 and July 3, 2021
Cost of Sales, page 26
3. Please explain to us and expand your disclosure to discuss what the
cited factors of
"favorable purchasing environment" and "strong inventory management"
represent, and
how they more than offset ongoing inflationary pressures. In
connection with this, tell us
and disclose as appropriate what is meant by your disclosure in
"Impact of Inflation" on
page 32 of "flexibility of our unique buying model," "ability to price
our products
frequently" and "selective price increases" to partially offset the
impact of inflation on
your business and reconcile this partial impact with the fulsome
inflationary offset
disclosure noted in the first sentence of the comment.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Robert Shapiro at 202-551-3273 or Doug Jones at
202-551-3309 with
any questions.
Sincerely,
Division of
Corporation Finance
Office of Trade
& Services