Discount grocery store chain Grocery Outlet (NASDAQ:GO) will be reporting results tomorrow afternoon. Here's what to look for.

Grocery Outlet met analysts' revenue expectations last quarter, reporting revenues of $989.8 million, up 6.3% year on year. It was a strong quarter for the company, with optimistic earnings guidance for the full year and a decent beat of analysts' earnings estimates.

Is Grocery Outlet a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting Grocery Outlet's revenue to grow 5.9% year on year to $1.02 billion, slowing from the 16.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.18 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Grocery Outlet has only missed Wall Street's revenue estimates once over the last two years, exceeding top-line expectations by 2.4% on average.

Looking at Grocery Outlet's peers in the non-discretionary retail segment, only Sprouts has reported results so far. It beat analysts' revenue estimates by 1.9%, delivering year-on-year sales growth of 8.7%. The stock traded up 12% on the results.

Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts thanks to mixed inflation data, and while some of the non-discretionary retail stocks have fared somewhat better, they have not been spared, with share prices down 2.8% on average over the last month. Grocery Outlet is down 2.4% during the same time and is heading into earnings with an average analyst price target of $31.3 (compared to the current share price of $26.36).

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