Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 02, 2021 | Feb. 25, 2021 | Jun. 27, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jan. 2, 2021 | ||
Current Fiscal Year End Date | --01-02 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 3,300 | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Common Stock, Shares Outstanding | 95,249,689 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Information required in response to Part III of Form 10-K (Items 10, 11, 12, 13, and 14) is hereby incorporated by reference to portions of the registrant's Proxy Statement for the Annual Meeting of Stockholders to be held in 2021. The Proxy Statement will be filed by the registrant with the Securities and Exchange Commission no later than 120 days after the end of the registrant's fiscal year ended January 2, 2021. | ||
Entity Central Index Key | 0001771515 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Assets, Current [Abstract] | ||
Cash and cash equivalents | $ 105,326 | $ 28,101 |
Independent operator receivables and current portion of independent operator notes, net of allowance $985 and $1,283 | 5,443 | 7,003 |
Other accounts receivable, net of allowance $39 and $19 | 5,950 | 2,849 |
Merchandise inventories | 245,157 | 219,420 |
Prepaid expenses and other current assets | 20,081 | 13,453 |
Total current assets | 381,957 | 270,826 |
Independent operator notes, net of allowance $7,124 and $9,088 | 27,440 | 20,331 |
Property and equipment, net | 433,652 | 356,614 |
Operating lease right-of-use assets | 835,397 | 734,327 |
Intangible assets, net | 48,226 | 47,792 |
Goodwill | 747,943 | 747,943 |
Deferred income tax assets, net | 3,529 | 0 |
Other assets | 7,480 | 7,696 |
Total assets | 2,485,624 | 2,185,529 |
Current liabilities: | ||
Trade accounts payable | 114,278 | 119,217 |
Accrued expenses | 35,699 | 31,363 |
Accrued compensation | 26,447 | 14,915 |
Current portion of long-term debt | 0 | 246 |
Current lease liabilities | 48,675 | 38,245 |
Income and other taxes payable | 7,547 | 4,641 |
Total current liabilities | 232,646 | 208,627 |
Liabilities, Noncurrent [Abstract] | ||
Long-term debt, net | 449,233 | 447,743 |
Deferred income tax liabilities, net | 0 | 16,020 |
Long-term lease liabilities | 881,438 | 767,755 |
Total liabilities | 1,563,317 | 1,440,145 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock - par value $0.001, voting and nonvoting common stock | 95 | 89 |
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 | 787,047 | 717,282 |
Retained earnings | 135,165 | 28,013 |
Total stockholders’ equity | 922,307 | 745,384 |
Total liabilities and stockholders’ equity | $ 2,485,624 | $ 2,185,529 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts and financing receivable, allowance for credit loss, current | $ 985 | $ 1,283 |
Allowance for doubtful other receivables, current | 39 | 19 |
Financing receivable, allowance for credit loss, noncurrent | $ 7,124 | $ 9,088 |
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) | 94,854,336 | 89,005,062 |
Common stock, outstanding (in shares) | 94,854,336 | 89,005,062 |
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 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net sales | $ 3,134,640 | $ 2,559,617 | $ 2,287,660 |
Cost of sales | 2,161,293 | 1,772,515 | 1,592,263 |
Gross profit | 973,347 | 787,102 | 695,397 |
Operating expenses: | |||
Selling, general and administrative | 772,409 | 639,437 | 557,100 |
Depreciation and amortization | 55,479 | 47,883 | 45,421 |
Share-based compensation | 38,084 | 31,439 | 10,409 |
Total operating expenses | 865,972 | 718,759 | 612,930 |
Income from operations | 107,375 | 68,343 | 82,467 |
Other expenses: | |||
Interest expense, net | 20,043 | 45,927 | 55,362 |
Debt extinguishment and modification costs | 198 | 5,634 | 5,253 |
Total other expenses | 20,241 | 51,561 | 60,615 |
Income before income taxes | 87,134 | 16,782 | 21,852 |
Income tax expense (benefit) | (19,579) | 1,363 | 5,984 |
Net income and comprehensive income | 106,713 | 15,419 | 15,868 |
Comprehensive income (loss) | $ 106,713 | $ 15,419 | $ 15,868 |
Basic earnings per share (in usd per share) | $ 1.16 | $ 0.20 | $ 0.24 |
Diluted earnings per share (in usd per share) | $ 1.08 | $ 0.19 | $ 0.23 |
Weighted average shares outstanding: | |||
Basic (in shares) | 91,818 | 79,044 | 68,473 |
Diluted (in shares) | 98,452 | 81,863 | 68,546 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common StockVoting Common | Common StockNonvoting Common | Preferred Stock | Additional Paid-In Capital | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Dec. 30, 2017 | 67,381,104 | 1,038,413 | 1 | |||||
Beginning balance at Dec. 30, 2017 | $ 427,133 | $ 67 | $ 1 | $ 0 | $ 403,289 | $ 23,776 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of shares (in shares) | 54,184 | 2,946 | ||||||
Issuance of shares | 29 | $ 0 | $ 0 | 29 | ||||
Repurchase of shares (in shares) | (2,946) | |||||||
Repurchase of shares | (34) | $ 0 | (34) | |||||
Share-based compensation expense | 10,409 | 10,409 | ||||||
Dividends paid | (153,587) | (126,236) | (27,351) | |||||
Net income (loss) | 15,868 | 15,868 | ||||||
Comprehensive income (loss) | 15,868 | 15,868 | ||||||
Ending balance (in shares) at Dec. 29, 2018 | 67,435,288 | 1,038,413 | 1 | |||||
Ending balance at Dec. 29, 2018 | 299,951 | $ 168 | $ 67 | $ 1 | $ 0 | 287,457 | 12,426 | $ 168 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of shares (in shares) | 19,765,625 | |||||||
Issuance of shares | 407,666 | $ 20 | 407,646 | |||||
Other direct initial public offering costs | (7,245) | (7,245) | ||||||
Conversion of non-voting to voting common stock (in shares) | 1,068,413 | (1,068,413) | ||||||
Conversion of nonvoting to voting common shares | $ 1 | $ (1) | ||||||
Redemption of preferred stock (in shares) | (1) | |||||||
Redemption of preferred shares | $ 0 | |||||||
Exercise and vest of share-based awards (in shares) | 735,736 | 30,000 | ||||||
Exercise and vest of share-based awards | 4,444 | $ 1 | 4,443 | |||||
Tax paid on behalf of employees related to net settlement of share-based awards | (2,813) | (2,813) | ||||||
Share-based compensation expense | 31,439 | 31,439 | ||||||
Dividends paid | (3,645) | (3,645) | ||||||
Net income (loss) | 15,419 | 15,419 | ||||||
Comprehensive income (loss) | 15,419 | 15,419 | ||||||
Ending balance (in shares) at Dec. 28, 2019 | 89,005,062 | 0 | 0 | |||||
Ending balance at Dec. 28, 2019 | 745,384 | $ 439 | $ 89 | $ 0 | $ 0 | 717,282 | 28,013 | $ 439 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Exercise and vest of share-based awards (in shares) | 5,849,274 | |||||||
Exercise and vest of share-based awards | 32,604 | $ 6 | 32,598 | |||||
Tax paid on behalf of employees related to net settlement of share-based awards | (483) | (483) | ||||||
Share-based compensation expense | 38,084 | 38,084 | ||||||
Dividends paid | (434) | (434) | ||||||
Net income (loss) | 106,713 | 106,713 | ||||||
Comprehensive income (loss) | 106,713 | 106,713 | ||||||
Ending balance (in shares) at Jan. 02, 2021 | 94,854,336 | 0 | 0 | |||||
Ending balance at Jan. 02, 2021 | $ 922,307 | $ 95 | $ 0 | $ 0 | $ 787,047 | $ 135,165 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 106,713 | $ 15,419 | $ 15,868 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation of property and equipment | 50,749 | 42,906 | 37,052 |
Amortization of intangible and other assets | 7,302 | 7,237 | 10,005 |
Amortization of debt issuance costs and bond discounts | 2,452 | 2,542 | 4,108 |
Debt extinguishment and modification costs | 198 | 5,634 | 5,253 |
Share-based compensation | 38,084 | 31,439 | 10,409 |
Provision for accounts receivable | (456) | 2,575 | 749 |
Deferred income taxes | (19,578) | 872 | 5,831 |
Other | 1,954 | 1,955 | 1,306 |
Changes in operating assets and liabilities: | |||
Independent operator and other accounts receivable | (4,943) | (3,649) | (642) |
Merchandise inventories | (25,737) | (21,115) | (15,292) |
Prepaid expenses and other current assets | (6,628) | 498 | (1,543) |
Income and other taxes payable | 2,906 | 1,191 | 159 |
Trade accounts payable, accrued compensation and other accrued expenses | 4,778 | 22,599 | 16,315 |
Deferred rent | 0 | 0 | 16,233 |
Proceeds from insurance recoveries | 479 | 0 | 0 |
Changes in operating lease assets and liabilities, net | 22,964 | 22,732 | 0 |
Net cash provided by operating activities | 181,237 | 132,835 | 105,811 |
Cash flows from investing activities: | |||
Advances to independent operators | (10,372) | (12,811) | (10,456) |
Repayments of advances from independent operators | 6,793 | 4,473 | 3,749 |
Purchases of property and equipment | (124,920) | (97,194) | (64,762) |
Proceeds from sales of assets | 269 | 586 | 1,092 |
Intangible assets and licenses | (5,861) | (3,073) | (3,173) |
Proceeds from insurance recoveries | 305 | 0 | 0 |
Net cash provided by (used in) investing activities | (133,786) | (108,019) | (73,550) |
Cash flows from financing activities: | |||
Proceeds from initial public offering, net of underwriting discounts paid | 0 | 407,666 | 0 |
Proceeds from exercise of share-based compensation awards | 32,604 | 4,444 | 29 |
Proceeds from term loans | 0 | 0 | 871,688 |
Proceeds from revolving credit facility loan | 90,000 | 0 | 0 |
Principal payments on revolving credit facility loan | (90,000) | 0 | 0 |
Payments made for net settlement of employee share-based awards | (483) | (2,813) | (34) |
Other direct costs paid related to the initial public offering | 0 | (7,062) | 0 |
Principal payments on term loans | (188) | (414,813) | (725,010) |
Principal payments on other borrowings | (1,024) | (865) | (94) |
Dividends paid | (434) | (3,645) | (153,587) |
Debt issuance costs paid | (701) | (690) | (9,991) |
Net cash provided by (used in) financing activities | 29,774 | (17,778) | (16,999) |
Net increase in cash and cash equivalents | 77,225 | 7,038 | 15,262 |
Cash and cash equivalents - Beginning of the period | 28,101 | 21,063 | 5,801 |
Cash and cash equivalents at end of period | 105,326 | 28,101 | 21,063 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 20,311 | 49,372 | 47,305 |
Income taxes paid (refunded) in cash | 5,186 | (65) | 289 |
Property and equipment accrued at end of period | $ 15,604 | $ 10,498 | $ 7,851 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 02, 2021 | |
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 January 2, 2021, we had 380 stores throughout California, Washington, Oregon, Pennsylvania, Idaho and Nevada. Grocery Outlet Holding Corp. (the “Parent Company”) owns 100% of Globe Intermediate Corp. (“Intermediate”), which owns 100% of GOBP Holdings, Inc. (“GOBP Holdings”), which owns 100% of GOBP Midco, Inc. (“Midco”), which owns 100% of Grocery Outlet Inc. (“GOI”). Initial Public Offering — In June 2019, we completed an initial public offering (“IPO”) of 19,765,625 shares of our common stock at a public offering price of $22.00 per share for net proceeds of $407.7 million, after deducting underwriting discounts and commissions of $27.1 million. We also incurred offering costs payable by us of $7.2 million. The shares of common stock sold in the IPO and the net proceeds from the IPO included the full exercise of the underwriters’ option to purchase additional shares. Our Amended and Restated Certificate of Incorporation (the “Charter”) became effective in connection with the completion of the IPO on June 24, 2019. The Charter, among other things, provided that all of our outstanding shares of nonvoting common stock were automatically converted into shares of voting common stock on a one-for-one basis and that our authorized capital stock consisted of 500,000,000 shares of common stock, and 50,000,000 shares of preferred stock, par value $0.001 per share. Our bylaws were also amended and restated as of June 24, 2019. Additionally, upon the closing of the IPO, we redeemed all of our outstanding preferred stock for an aggregate of $1.00. On June 24, 2019, we used the net proceeds from the IPO to repay $150.0 million in principal on the outstanding term loan under our second lien credit agreement, dated as of October 22, 2018 (as amended, the “Second Lien Credit Agreement”), as well as accrued and unpaid interest as of that date of $3.6 million, and terminated the Second Lien Credit Agreement. In addition, using the remainder of net proceeds, together with excess cash on hand, we prepaid a portion of our outstanding senior secured term loan under our First Lien Credit Agreement (as defined below) totaling $248.0 million plus accrued interest of $3.8 million. On October 23, 2019, we prepaid an additional $15.0 million of principal on the senior secured term loan under the First Lien Credit Agreement. Secondary Public Offerings — On October 8, 2019, certain of our selling stockholders completed a secondary public offering of shares of our common stock. We did not receive any of the proceeds from the sale of these shares by the selling stockholders. We incurred offering costs of $1.1 million, which are included in selling, general and administrative expenses (“SG&A“) for fiscal 2019, and received $3.2 million in cash (excluding withholding taxes) in connection with the exercise of 451,470 options by certain stockholders participating in this secondary public offering. On February 3, 2020, certain selling stockholders completed an additional secondary public offering of shares of our common stock. We did not receive any of the proceeds from the sale of these shares by the selling stockholders. We incurred offering costs of $1.1 million, which were recognized in SG&A expenses during fiscal 2020. We received $1.4 million in cash (excluding withholding taxes) in connection with the exercis e of 191,470 opti ons by certain stockholders participating in this secondary public offering. On April 27, 2020, certain of our selling stockholders completed another secondary public offering of shares of our common stock. We did not receive any of the proceeds from the sale of these shares by the selling stockholders. We incurred related offering costs of $1.0 million which we recognized in SG&A expenses during fiscal 2020. We received $1.6 million in cash (excluding withholding taxes) in connection with the exercise of 269,000 options by certain stockholders participating in this secondary public offering. On May 28, 2020, the stockholder affiliated with our former private equity sponsor, Hellman and Friedman LLC (the "H&F Investor"), distributed the remainder of its holdings representing 9.6 million shares of our common stock to its equity holders. We did not receive any proceeds or incur any material costs related to this distribution. Forward Stock Split — All share amounts and per share disclosures for all periods presented reflect a 1.403 for 1 forward stock split effected on June 6, 2019. Fiscal Year — We operate on a fiscal year that ends on the Saturday closest to December 31st each year. The fiscal year ended January 2, 2021 contained 53 weeks while each of the fiscal years ended December 28, 2019 and December 29, 2018 contained 52 weeks. Basis of Presentation — The accompanying 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 U.S. Securities and Exchange Commission (the "SEC"). Our 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 consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the periods presented. Use of Estimates — The preparation of 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. All of our sales were made to customers located in the United States and all property and equipment is located in the United States. Cash and Cash Equivalents — We consider all highly liquid investments, purchased with original maturities of three months or less, to be cash equivalents. All cash equivalents are unrestricted and available for immediate use. Allowance for Independent Operator ( “ IO ” ) Receivables and Notes and Other Accounts Receivable — We maintain allowances and accruals for estimated losses of amounts advanced to IOs and other third parties determined to be uncollectible. See NOTE 2 — Independent Operator Notes and Receivables, for additional information. Concentrations of Credit Risk — Financial instruments which potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts and notes receivable. Although we deposit our cash with creditworthy financial institutions, our deposits typically exceed federally insured limits. To date, we have not experienced any losses on our cash deposits. No single customer or store represented more than 10% of net sales for the years ended January 2, 2021, December 28, 2019 and December 29, 2018. No single customer or IO represented more than 10% of accounts receivable or notes receivable as of January 2, 2021 and December 28, 2019. 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. Property and Equipment — Property and equipment is stated at cost less accumulated depreciation and includes expenditures for significant improvements to leased premises. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, generally ranging from three one We evaluate events and changes in circumstances that could indicate carrying amounts of long-lived assets, including property and equipment, may not be recoverable. When such events or changes in circumstances occur, we assess the recoverability of long-lived assets by determining whether or not the carrying value of such assets will be recovered through undiscounted future cash flows derived from their use and eventual disposition. For purposes of this assessment, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, primarily at an individual store level. If the sum of the undiscounted future cash flows is less than the carrying amount of an asset, we record an impairment loss for the amount by which the carrying amount of the asset exceeds its fair value. The estimated fair value of the asset or asset group is based on the estimated discounted future cash flows of the asset or asset group using a discount rate commensurate with the related risk. There were no adjustments to the carrying value of long-lived assets due to impairment charges during fiscal 2020. We recorded impairment charges of $0.5 million and $0.6 million during fiscal 2019 and 2018, respectively. See NOTE 3—Property and Equipment, for additional information. 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 consolidated balance sheets. Finance leases are included in other assets, current lease liabilities, and long-term lease liabilities on our 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. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Amortization of finance lease right-of-use assets, interest expense on finance lease liabilities and operating and financing cash flows for finance leases are immaterial. We have lease agreements with retail facilities for store locations, distribution centers, office space and equipment with lease and non-lease components, which are accounted for separately. Leases with an initial term of 12 months or less are not recorded on the balance sheet; lease expense for these leases is recognized on a straight-line basis over the lease term. The short-term lease expense is reflective of the short-term lease commitments on a go-forward basis. We sublease certain real estate to unrelated third parties under non-cancelable leases and the sublease portfolio consists of operating leases for retail stores. Goodwill and Other Intangible Assets — We have both goodwill and intangible assets recorded on our consolidated balance sheets. Goodwill represents the difference between the purchase price and the fair value of assets and liabilities acquired in a business combination. Goodwill is not amortized, but rather is subject to an annual impairment evaluation which is performed during our fourth quarter or when events or changes in circumstances indicate that the value of goodwill may be impaired. Our impairment evaluation of goodwill consists of an initial qualitative assessment of our reporting unit to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than its carrying value. If it is concluded that this is the case, a quantitative evaluation, based on discounted cash flows, is performed which requires us to estimate future cash flows, growth rates and economic and market conditions. If the quantitative evaluation indicates that goodwill is not recoverable, an impairment loss is calculated and recognized during that period. Measurement of such an impairment loss would be based on the excess of the carrying amount over fair value. There were no goodwill impairment charges recorded during the fiscal years ended January 2, 2021, December 28, 2019 and December 29, 2018. There were no changes in the carrying amount of goodwill for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018. Intangible assets include trademarks, computer software, and liquor licenses. Trademarks represent the value of all our trademarks and trade names in the marketplace. We are amortizing the value assigned to the trade names on a straight-line basis over 15 years. Computer software includes both acquired software and eligible costs to develop internal-use software that are incurred during the application development stage. These assets are amortized over their estimated useful lives of 3 years. Liquor license assets have been classified as indefinite-lived intangible assets and accordingly, are not subject to amortization. We review our intangible assets for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of the intangible assets are not recoverable, the impairment is measured as the amount by which the carrying value of the intangible asset exceeds its fair value. There were no impairments of intangible assets recognized during the fiscal years ended January 2, 2021, December 28, 2019 and December 29, 2018. 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 basis as of January 2, 2021 or December 28, 2019. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. See NOTE 3—Property and Equipment and NOTE 5—Goodwill and Intangible Assets, for additional information. There were no transfers of assets or liabilities between levels within the fair value hierarchy as of January 2, 2021 or December 28, 2019. Our financial assets and liabilities are carried at cost, which generally approximates their fair value, as described below: Cash and cash equivalents, 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. Notes payable and term loans — The carrying value of such financial instruments approximates their fair value since the stated interest rates approximates market rates for loans with similar terms for borrowers with similar credit profiles. However, in accordance with Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments, the fair values of our term loans as of January 2, 2021 and December 28, 2019 are set forth below. 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 consolidated balance sheets (amounts in thousands): January 2, December 28, Carrying Amount (1) Estimated Fair Value (2) Carrying Amount (1) Estimated Fair Value (2) Financial Liabilities: Term loans (Level 2) $ 458,757 $ 460,000 $ 458,682 $ 466,515 _______________________ (1) The carrying amounts as of January 2, 2021 and December 28, 2019 are net of unamortized debt discounts of $1.2 million and $1.5 million, respectively. (2) The estimated fair value of our term loans was determined based on the average quoted bid-ask prices for the term loans in an over-the-counter market on the last trading day of fiscal 2020 and 2019. 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. 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 sales as the products are sold. Discounts provided by IOs are not recognized as a reduction in 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 January 2, 2021 and December 28, 2019. 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 $3.2 million as of January 2, 2021 and $2.0 million as of December 28, 2019. Breakage amounts were $0.2 million for the fiscal year ended January 2, 2021, and less than $0.1 million for each of the fiscal years ended December 28, 2019 and December 29, 2018. Disaggregated Revenues — The following table presents sales revenue by type of product for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018 (amounts in thousands): January 2, December 28, December 29, Perishable (1) $ 1,054,506 $ 868,109 $ 768,373 Non-perishable (2) 2,080,134 1,691,508 1,519,287 Total sales (3) $ 3,134,640 $ 2,559,617 $ 2,287,660 _______________________ (1) Perishable departments include dairy and deli; produce and floral; and fresh meat and seafood. (2) Non-perishable departments include grocery; general merchandise; health and beauty care; frozen foods; and beer and wine. (3) The fiscal year ended January 2, 2021 contained 53 weeks while each of the fiscal years ended December 28, 2019 and December 29, 2018 contained 52 weeks. Cost of Sales — Cost of sales includes, among other things, merchandise costs, inventory markdowns, shrink and transportation, distribution and warehousing costs, including depreciation. Marketing and Advertising Expenses — Costs for store promotions, newspaper, television, radio and other media advertising are expensed at the time the promotion or advertising takes place. Advertising costs are included in SG&A in the accompanying consolidated statements of operations and comprehensive income and amounted to approximately $25.9 million, $26.2 million and $21.2 million, respectively, in the fiscal years ended January 2, 2021, December 28, 2019 and December 29, 2018. Share-based Awards — We estimate the fair value of time-based stock option awards subject to only a service condition on the date of grant using the Black-Scholes valuation model. The Black-Scholes model requires the use of certain input assumptions. Because we completed our IPO during fiscal 2019, we have limited historical exercise data from which to derive such input assumptions, including an option's expected term and the price volatility of the underlying stock. Consequently, we determine the expected term using an accepted, simplified formula which derives an expected term by taking the sum of the contractual term and adding the length of the vesting period and dividing by two. We estimate stock price volatility for our common stock by taking the average historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option grants. Industry peers consist of several public companies in our industry which are of similar size, complexity and stage of development. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury implied yield at the date of grant. We estimate the fair value of performance-based stock option awards subject to both a market condition and a performance condition on the date of grant using a Monte Carlo simulation approach implemented in a risk-neutral framework. We estimate the fair value of restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs") based upon the closing price of our common stock as reported on the Nasdaq Global Select Market on the date of grant. We recognize compensation expense for share-based payment awards with only a service condition on a straight-line basis over the requisite service period, which is generally the award’s vesting period. Vesting of these awards would be accelerated for certain employees in the event of a change in control. Compensation expense for share-based payment awards subject to vesting based upon the achievement of a performance condition is recognized on a graded-vesting basis at the time the achievement of the performance condition becomes probable. We recognize share-based award forfeitures as they occur rather than estimating by applying a forfeiture rate. While we recognize share-based compensation expense over the performance period and/or requisite service period based on the fair market value of the award as of the grant date, we will not know the actual amount of tax benefit an award will generate until such award is exercised (or vested for RSUs or PSUs)). Until such award is exercised (or vested for RSUs or PSUs) we assume that the amount ultimately recognized for tax purposes is the same amount we are currently recognizing in our operating results, that is for “book” purposes. Consequently, our deferred tax asset related to share-based compensation expense, which totaled $8.9 million as of January 2, 2021, is based on each qualifying award’s grant date fair value rather than the award’s to-be-determined exercise date intrinsic value (or vesting date fair value). For awards exercised (or vested for RSUs) during our fiscal year ended January 2, 2021, the difference between the grant date fair value and the exercise or vest date intrinsic value totaled $165.8 million. If the share price for our common stock were to depreciate for a sustained period of time, we could be required to recognize a tax benefit shortfall. Such shortfalls could have a material effect on our cash flows and financial results. See NOTE 7—Share-based Awards and NOTE 9—Income Taxes, for additional information. Income Taxes — Income taxes are accounted for using an asset and liability approach that requires recognition of deferred tax assets and liabilities for expected future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. In estimating future tax consequences, all expected future events are considered, other than changes in the tax law. A valuation allowance is established, when necessary, to reduce net deferred income tax assets to the amount expected to be realized. We have not recorded any valuation allowances against our deferred income tax balances for the fiscal years ended January 2, 2021 and December 28, 2019. Significant items comprising our future tax benefits and liabilities (deferred tax assets and liabilities) include net operating losses, depreciation and amortization, goodwill, intangible assets, lease liability obligations and right-of-use assets. We recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We record uncertain tax positions in accordance with ASC Topic 740, Income Taxes, on the basis of a two-step process in which (i) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Variable Interest Entities — In accordance with the variable interest entities sub-section of 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 375, 342 and 308 stores operated by IOs as of January 2, 2021, December 28, 2019 and December 29, 2018, respectively. We have agreements in place with each IO. The IO orders its merchandise exclusively from us, which is provided to the IO on consignment. Under the Independent Operator Agreement (the "Operator Agreement"), the IO may select 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 ass ets. 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. Sales related to IO stores were $3.1 billion, $2.5 billion , and $2.2 billion for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018, respectively. We, in turn, pay IOs a commission based on a share of the gross profit of the store. Inventories and related 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 $469.3 million, $382.8 million, and $340.0 million for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018, respectively. IO commissions of $6.0 million and $6.1 million were included in accrued expenses as of both January 2, 2021 and December 28, 2019, 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—Independent Operator Notes and Receivables. 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 its 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 vitiate our control over the IO. Our maximum exposure to the IOs is generally limited to the gross operator notes and receivables due from these entities, which was $41.0 million and $37.7 million as of January 2, 2021 and December 28, 2019, respectively. See NOTE 2—Independent Notes and Operator Receivables, for additional information. Net Income Per Share — Basic net income per share is calculated using net income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted net income per share reflects the dilutive effects of stock options and RSUs outstanding during the period, to the extent such securities would not be anti-dilutive, and is determined using the treasury stock method. Recently Adopted Accounting Standards ASU No. 2016-13 — In June 2016, Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13, which was further updated and clarified by the |
Independent Operator Notes and
Independent Operator Notes and Receivables | 12 Months Ended |
Jan. 02, 2021 | |
Receivables [Abstract] | |
Independent Operator Notes and Receivables | Independent Operator Notes and Receivables The amounts included in independent operator notes and accounts receivable consist primarily of funds we loaned to IOs, net of estimated uncollectible amounts. Independent operator notes are payable on demand and typically bear interest at rates between 3.00% and 9.95%. Accrued interest receivable on independent operator 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 $0.4 million and $0.5 million as of January 2, 2021 and December 28, 2019, respectively. There were no independent operator notes that were past due or on a non-accrual status due to delinquency as of January 2, 2021 or December 28, 2019. Notes and receivables of 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 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 of 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 of 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 of 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 January 2, 2021 and December 28, 2019 consisted of the following (amounts in thousands) : Allowance Current Portion Long-term Portion Gross Current Portion Long-term Portion Net January 2, 2021 Independent operator notes $ 37,238 $ (514) $ (7,124) $ 29,600 $ 2,160 $ 27,440 Independent operator receivables 3,754 (471) — 3,283 3,283 — Total $ 40,992 $ (985) $ (7,124) $ 32,883 $ 5,443 $ 27,440 Allowance Current Portion Long-term Portion Gross Current Portion Long-term Portion Net December 28, 2019 Independent operator notes $ 31,952 $ (678) $ (9,088) $ 22,186 $ 1,855 $ 20,331 Independent operator receivables 5,753 (605) — 5,148 5,148 — Total $ 37,705 $ (1,283) $ (9,088) $ 27,334 $ 7,003 $ 20,331 A summary of IO notes and receivables allowance activity is as follows (amounts in thousands): Fiscal Year Ended January 2, December 28, December 29, Balance at beginning of year $ 10,371 $ 9,067 $ 9,031 Provision for independent operator notes and receivables (473) 2,741 1,029 Cumulative effect of accounting change (439) — — Write-off of provision for independent operator notes and receivables (1,350) (1,437) (993) Balance at end of year $ 8,109 $ 10,371 $ 9,067 The following table presents the amortized cost basis of IO notes by year of origination and credit quality indicator as of January 2, 2021 (amounts in thousands): Credit Quality Indicator 2020 2019 2018 2017 2016 Prior Total TCAP $ 1,375 $ 2,321 $ 1,333 $ 186 $ 194 $ — $ 5,409 Non-TCAP 3,856 5,693 5,603 2,382 961 270 18,765 New store 8,628 4,436 — — — — 13,064 Total $ 13,859 $ 12,450 $ 6,936 $ 2,568 $ 1,155 $ 270 $ 37,238 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jan. 02, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment as of January 2, 2021 and December 28, 2019 consisted of the following (amounts in thousands): Property and Equipment, At Cost Accumulated Depreciation Property and Equipment, Net January 2, 2021 Leasehold improvements $ 275,586 $ (70,999) $ 204,587 Fixtures and equipment 330,338 (134,820) 195,518 Other 376 (282) 94 Construction in progress 33,453 — 33,453 Totals $ 639,753 $ (206,101) $ 433,652 December 28, 2019 Leasehold improvements $ 225,496 $ (53,733) $ 171,763 Fixtures and equipment 274,523 (105,886) 168,637 Other 383 (269) 114 Construction in progress 16,100 — 16,100 Totals $ 516,502 $ (159,888) $ 356,614 Construction in progress is primarily composed of leasehold improvements and fixtures and equipment related to new or remodeled stores where construction had not been completed at year-end. Long-lived assets were evaluated for potential impairment by measuring their fair value on a nonrecurring basis. Fair value of long-lived assets is determined by estimating the amount and timing of net future cash flows (including rental expense for leased properties, sublease rental income, common area maintenance costs, and real estate taxes) and discounting them using a risk-adjusted rate. We estimate future cash flows based on our experience and knowledge of the market in which each store is located. There were no adjustments to the carrying value of long-lived assets due to impairment charges during fiscal 2020. We recorded impairment charges of $0.5 million and $0.6 million during fiscal 2019 and 2018, respectively. Depreciation expense on property and equipment for fiscal 2020, 2019 and 2018 was as follows (amounts in thousands): Fiscal Year Ended Consolidated Statements of Operations and Comprehensive Income Location January 2, December 28, December 29, Cost of sales $ 1,299 $ 1,210 $ 1,265 Operating expenses 49,450 41,696 35,787 Total depreciation expense on property and equipment $ 50,749 $ 42,906 $ 37,052 |
Leases
Leases | 12 Months Ended |
Jan. 02, 2021 | |
Leases [Abstract] | |
Leases | Leases 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 right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at the lease commencement date to determine the present value of lease payments. 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. Leases for 15 of our store locations and one warehouse location are controlled by related parties as of both January 2, 2021 and December 28, 2019. See NOTE 10—Related Party Transactions, for additional information. As of January 2, 2021, the right-of-use assets and lease liabilities related to these properties was $39.8 million and $44.3 million, respectively. As of December 28, 2019, the right-of-use assets and lease liabilities related to these properties was $42.5 million and $46.7 million, respectively. As of January 2, 2021, we had executed leases for 37 store locations that we had not yet taken possession of with total undiscounted future lease payments of $200.4 million with lease terms through 2039. Based upon our initial investment in store leasehold improvements, we utilize an initial, reasonably-certain lease life of 15 years. Most leases include one or more options to renew, with renewal terms that can extend the lease term from five The balance sheet classification of our right-of-use lease assets and lease liabilities was as follows (amounts in thousands): Leases Classification January 2, December 28, Assets: Operating lease assets Operating right-of-use assets $ 835,397 $ 734,327 Finance lease assets Other assets 5,973 5,904 Total lease assets $ 841,370 $ 740,231 Liabilities: Current Operating Current lease liabilities $ 47,730 $ 37,923 Finance Current lease liabilities 945 322 Noncurrent Operating Long-term lease liabilities 876,329 762,105 Finance Long-term lease liabilities 5,109 5,651 Total lease liabilities $ 930,113 $ 806,001 The components of lease expense were as follows (amounts in thousands): Fiscal Year Ended Lease Cost Classification (1) January 2, December 28, Operating lease cost Selling, general and administrative expenses $ 112,096 $ 99,237 Finance lease cost: Amortization of right-of-use assets Depreciation and amortization 964 817 Interest on leased liabilities Interest expense, net 376 263 Variable lease cost Selling, general and administrative expenses 700 668 Sublease income Selling, general and administrative expenses (972) (1,248) Net lease cost $ 113,164 $ 99,737 _______________________ (1) Certain supply chain related lease costs herein are included in cost of sales. Short-term lease expense payments recorded in operating expenses were immaterial for the fiscal years ended January 2, 2021 and December 28, 2019. Maturities of lease liabilities as of January 2, 2021 were as follows (amounts in thousands): Operating Leases Finance Leases Total Fiscal 2021 $ 112,249 $ 1,279 $ 113,528 Fiscal 2022 113,556 1,226 114,782 Fiscal 2023 113,351 1,124 114,475 Fiscal 2024 112,763 1,058 113,821 Fiscal 2025 111,191 827 112,018 Thereafter 818,237 1,862 820,099 Total lease payments 1,381,347 7,376 $ 1,388,723 Less: Imputed interest (457,288) (1,322) Present value of lease liabilities $ 924,059 $ 6,054 The weighted-average lease terms and discount rates of operating and finance leases were as follows: January 2, December 28, Weighted-average remaining lease term: Operating leases 12.0 years 12.3 years Finance leases 6.7 years 7.6 years Weighted-average discount rate: Operating leases 6.91 % 7.41 % Finance leases 6.08 % 6.35 % Supplemental cash flow information related to leases was as follows (amounts in thousands): Fiscal Year Ended January 2, December 28, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 101,245 $ 88,362 Leased assets obtained in exchange for new lease liabilities — adoption $ — $ 664,882 Leased assets obtained in exchange for new operating lease liabilities $ 166,018 $ 155,986 ASC 840 Disclosure Rental expense for all operating leases for the fiscal year ended December 29, 2018 totaled $86.0 million. |
Leases | Leases 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 right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at the lease commencement date to determine the present value of lease payments. 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. Leases for 15 of our store locations and one warehouse location are controlled by related parties as of both January 2, 2021 and December 28, 2019. See NOTE 10—Related Party Transactions, for additional information. As of January 2, 2021, the right-of-use assets and lease liabilities related to these properties was $39.8 million and $44.3 million, respectively. As of December 28, 2019, the right-of-use assets and lease liabilities related to these properties was $42.5 million and $46.7 million, respectively. As of January 2, 2021, we had executed leases for 37 store locations that we had not yet taken possession of with total undiscounted future lease payments of $200.4 million with lease terms through 2039. Based upon our initial investment in store leasehold improvements, we utilize an initial, reasonably-certain lease life of 15 years. Most leases include one or more options to renew, with renewal terms that can extend the lease term from five The balance sheet classification of our right-of-use lease assets and lease liabilities was as follows (amounts in thousands): Leases Classification January 2, December 28, Assets: Operating lease assets Operating right-of-use assets $ 835,397 $ 734,327 Finance lease assets Other assets 5,973 5,904 Total lease assets $ 841,370 $ 740,231 Liabilities: Current Operating Current lease liabilities $ 47,730 $ 37,923 Finance Current lease liabilities 945 322 Noncurrent Operating Long-term lease liabilities 876,329 762,105 Finance Long-term lease liabilities 5,109 5,651 Total lease liabilities $ 930,113 $ 806,001 The components of lease expense were as follows (amounts in thousands): Fiscal Year Ended Lease Cost Classification (1) January 2, December 28, Operating lease cost Selling, general and administrative expenses $ 112,096 $ 99,237 Finance lease cost: Amortization of right-of-use assets Depreciation and amortization 964 817 Interest on leased liabilities Interest expense, net 376 263 Variable lease cost Selling, general and administrative expenses 700 668 Sublease income Selling, general and administrative expenses (972) (1,248) Net lease cost $ 113,164 $ 99,737 _______________________ (1) Certain supply chain related lease costs herein are included in cost of sales. Short-term lease expense payments recorded in operating expenses were immaterial for the fiscal years ended January 2, 2021 and December 28, 2019. Maturities of lease liabilities as of January 2, 2021 were as follows (amounts in thousands): Operating Leases Finance Leases Total Fiscal 2021 $ 112,249 $ 1,279 $ 113,528 Fiscal 2022 113,556 1,226 114,782 Fiscal 2023 113,351 1,124 114,475 Fiscal 2024 112,763 1,058 113,821 Fiscal 2025 111,191 827 112,018 Thereafter 818,237 1,862 820,099 Total lease payments 1,381,347 7,376 $ 1,388,723 Less: Imputed interest (457,288) (1,322) Present value of lease liabilities $ 924,059 $ 6,054 The weighted-average lease terms and discount rates of operating and finance leases were as follows: January 2, December 28, Weighted-average remaining lease term: Operating leases 12.0 years 12.3 years Finance leases 6.7 years 7.6 years Weighted-average discount rate: Operating leases 6.91 % 7.41 % Finance leases 6.08 % 6.35 % Supplemental cash flow information related to leases was as follows (amounts in thousands): Fiscal Year Ended January 2, December 28, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 101,245 $ 88,362 Leased assets obtained in exchange for new lease liabilities — adoption $ — $ 664,882 Leased assets obtained in exchange for new operating lease liabilities $ 166,018 $ 155,986 ASC 840 Disclosure Rental expense for all operating leases for the fiscal year ended December 29, 2018 totaled $86.0 million. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Jan. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Information regarding our goodwill and intangible assets as of January 2, 2021 was as follows (amounts in thousands): Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks $ 58,400 $ (24,218) $ 34,182 Computer software 24,868 (18,368) 6,500 Total finite-lived intangible assets 83,268 (42,586) 40,682 Liquor licenses 7,544 — 7,544 Total intangible assets 90,812 (42,586) 48,226 Goodwill 747,943 — 747,943 Total goodwill and intangible assets $ 838,755 $ (42,586) $ 796,169 Information regarding our goodwill and intangible assets as of December 28, 2019 was as follows (amounts in thousands): Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks $ 58,400 $ (20,324) $ 38,076 Customer lists 160 (160) — Computer software 20,418 (17,062) 3,356 Total finite-lived intangible assets 78,978 (37,546) 41,432 Liquor licenses 6,360 — 6,360 Total intangible assets 85,338 (37,546) 47,792 Goodwill 747,943 — 747,943 Total goodwill and intangible assets $ 833,281 $ (37,546) $ 795,735 Amortization expense for finite-lived intangible assets was $6.5 million, $6.7 million, and $10.0 million for t he fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018, respectively. Liquor license assets have been classified as indefinite-lived intangible assets and accordingly, are not subject to amortization. There were no impairments of goodwill or intangible assets during the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018, respectively. The estimated future amortization expense related to finite-lived intangible assets as of January 2, 2021 is as follows (amounts in thousands): Fiscal 2021 $ 6,976 Fiscal 2022 5,517 Fiscal 2023 4,735 Fiscal 2024 4,003 Fiscal 2025 4,002 Thereafter 15,449 Total $ 40,682 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Jan. 02, 2021 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-Term Debt Long-term debt consisted of the following (amounts in thousands): January 2, December 28, First Lien Credit Agreement: Term loan $ 460,000 $ 460,188 Notes payable — 246 Long-term debt, gross 460,000 460,434 Less: Unamortized debt discounts and debt issuance costs (10,767) (12,445) Long-term debt, less unamortized debt discounts and debt issuance costs 449,233 447,989 Less: Current portion — (246) Long-term debt, net $ 449,233 $ 447,743 First Lien Credit Agreement On October 22, 2018, GOBP Holdings, our wholly owned subsidiary, together with another of our wholly owned subsidiaries, entered into a first lien credit agreement (the “First Lien Credit Agreement”) with a syndicate of lenders for a $725.0 million senior term loan and a revolving credit facility for an amount up to $100.0 million, with a sub-commitment for a $35.0 million letter of credit and a sub-commitment for $20.0 million of swingline loans. Borrowings under the First Lien Credit Agreement are secured by substantially all the assets of the borrower subsidiary and its guarantors. The term loan proceeds were primarily used for retiring our prior first lien credit agreement and paying cash dividends related to our 2018 recapitalization. As of January 2, 2021, we had standby letters of credit outstanding totali ng $3.5 million u nder the First Lien Credit Agreement. Term Loans The First Lien Credit Agreement permits voluntary prepayment on borrowings without premium or penalty. In connection with the closing of our IPO, we prepaid $248.0 million of principal and $3.8 million of interest on the outstanding term loan under the First Lien Credit Agreement on June 24, 2019 and elected to apply the prepayment against the remaining principal installments in the direct order of maturity. No further principal payment on the term loan will be due until the maturity date of this term loan. The terms of the First Lien Credit Agreement include mandatory prepayment requirements on the term loan if certain conditions are met (as described in the First Lien Credit Agreement). First Incremental Agreement — On July 23, 2019, GOBP Holdings together with another of our wholly owned subsidiaries entered into an incremental agreement (the “First Incremental Agreement”) to amend the First Lien Credit Agreement. The First Incremental Agreement refinanced the term loan outstanding under the First Lien Credit Agreement with a replacement $475.2 million senior secured term loan (the “First Replacement Term Loan”) with an applicable margin of 3.50% or 3.25% for Eurodollar loans and 2.50% or 2.25% for base rate loans, in each case depending on the public corporate family rating of GOBP Holdings. The First Replacement Term Loan was to mature on October 22, 2025, which was the same maturity date as the prior term loan under the First Lien Credit Agreement. We wrote off debt issuance costs of $0.3 million and incurred debt modification costs of $0.2 million during the third quarter of fiscal 2019 in connection with this refinance. On October 23, 2019 , we prepaid $15.0 million of principal on the First Replacement Term Loan. Second Incremental Agreement — On January 24, 2020, GO BP Holdings together with another of our wholly owned subsidiaries entered into a second incremental agreement (the “Second Incremental Agreement”) which amended the First Incremental Agreement. The Second Incremental Agreement refinanced the First Replacement Term loan under the First Incremental Agreement with a replacement $460.0 million senior secured term loan (the “Second Replacement Term Loan”) with an applicable margin of 2.75% for Eurodollar loans and 1.75% for base rate loans, in each case depending on the public corporate family rating of GOBP Holdings, and made certain other corresponding technical changes and updates to the First Incremental Agreement. The interest rate on the First Replacement Term Loan was 2.90% as of January 2, 2021. The Second Replacement Term Loan matures on October 22, 2025, which is the same maturity date as prior term loans under the First Lien Credit Agreement and First Incremental Agreement. We wrote off debt issuance costs of $0.1 million and incurred debt modification costs of $0.1 million during the first quarter of fiscal 2020 in connection with this refinance. Other than as described above, the Second Replacement Term Loan has the same terms as provided under the original First Lien Credit Agreement and the First Incremental Agreement. Additionally, the parties to the Second Incremental Agreement continue to have the same obligations set forth in the original First Lien Credit Agreement and the First Incremental Agreement (collectively, the “First Lien Credit Agreement”). Revolving Credit Facility 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. No amounts were outstanding under the revolving credit facility as of January 2, 2021 and December 28, 2019. On March 19, 2020, we borrowed $90.0 million under the revolving credit facility of our First Lien Credit Agreement (the "Revolving Credit Facility Loan"), the proceeds of which were to be used as reserve funding for working capital needs as a precautionary measure in light of the economic uncertainty surrounding the COVID-19 pandemic. On May 26, 2020, we repaid the Revolving Credit Facility Loan in full. As of January 2, 2021 , we had $96.5 million of borrowing capacity available under the revolving credit facility. Second Lien Credit Agreement On October 22, 2018, one of our wholly owned subsidiaries entered into a second lien credit agreement with a syndicate of lenders for a $150.0 million senior term loan. The proceeds were primarily used for retiring the prior second lien credit agreement and paying the dividends related to our 2018 recapitalization. The term loan under the Second Lien Credit Agreement did not require minimum quarterly principal payment. The Second Lien Credit Agreement did require mandatory prepayment if certain conditions were met and permitted voluntarily prepayment on borrowings without premium or penalty. On June 24, 2019, we terminated the Second Lien Credit Agreement and repaid in full the outstanding principal balance of $150.0 million and accrued interest of $3.6 million. In addition, we wrote off the remaining unamortized debt issuance costs of $3.8 million and loan discounts of $1.4 million on June 24, 2019. 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 has the ability to restrict 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, the revolving credit facility under our First Lien Credit Agreement is subject to a first lien secured leverage ratio of 7.00 to 1.00, tested quarterly if, and only if, the aggregate principal amount from the revolving facility, letters of credit (to the extent not cash collateralized or backstopped or, in the aggregate, not in excess of the greater of $10.0 million and the stated face amount of letters of credit outstanding on the closing date) and swingline loans outstanding and/or issued, as applicable, exceeds 35% of the total amount of the revolving credit facility commitments (as defined in the First Lien Credit Agreement). As of January 2, 2021, 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 January 2, 2021 are as follows (amounts in thousands): Fiscal 2021 $ — Fiscal 2022 — Fiscal 2023 — Fiscal 2024 — Fiscal 2025 460,000 Thereafter — Total $ 460,000 Interest Expense Interest expense, net, consisted of the following (amounts in thousands): Fiscal Year Ended January 2, December 28, December 29, Interest on loans $ 19,113 $ 45,259 $ 52,569 Amortization of debt issuance costs 2,289 2,367 4,024 Interest on finance leases 376 263 117 Other 32 51 2 Interest income (1,767) (2,013) (1,350) Interest expense, net $ 20,043 $ 45,927 $ 55,362 Debt Extinguishment and Modification Costs Debt extinguishment and modification costs consisted of the following (amounts in thousands): Fiscal Year Ended January 2, December 28, December 29, Write off of debt issuance costs $ 74 $ 4,110 $ 3,459 Debt modification costs 124 150 1,794 Write off of loan discounts — 1,374 — Debt extinguishment and modification costs $ 198 $ 5,634 $ 5,253 |
Share-based Awards
Share-based Awards | 12 Months Ended |
Jan. 02, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Awards | Share-based Awards Share-based Incentive Plans The Globe Holding Corp. 2014 Stock Incentive Plan (the “2014 Plan”) became effective on October 21, 2014. Under the 2014 Plan, we granted stock options and RSUs to purchase shares of our common stock. Effective as of June 19, 2019, we terminated the 2014 Plan and as a result no further equity awards may be issued under the 2014 Plan. Any outstanding awards granted under the 2014 Plan will remain subject to the terms of the 2014 Plan and the applicable equity award agreements. On June 4, 2019, our board of directors and stockholders approved the Grocery Outlet Holding Corp. 2019 Incentive Plan (the “2019 Plan”). A total of 4,597,862 shares of common stock were reserved for issuance under the 2019 Plan at that time. In addition, on the first day of each fiscal year beginning in fiscal 2020 and ending in fiscal 2029, the 2019 Plan provides for an annual automatic increase of the shares reserved for issuance in an amount equal to the positive difference between (i) 4% of the outstanding common stock on the last day of the immediately preceding fiscal year and (ii) the plan share reserve on the last day of the immediately preceding fiscal year, or a lesser number as determined by our board of directors. As of January 2, 2021, there were a total of 5,057,940 shares of common stock reserved for issuance under the 2019 Plan, which includes 460,078 shares added effective December 29, 2019 per the above noted annual automatic increase. As of January 2, 2021, there were 3,076,015 remaining shares available for issuance of the new equity awards under the 2019 Plan. On April 28, 2020, the Compensation Committee approved a long-term incentive program (the “LTIP”) under the 2019 Plan consisting of time-based RSUs and PSUs. RSUs granted under the LTIP generally vest over 3 years. Half of the total PSUs granted under the LTIP will vest upon the achievement of certain revenue-based performance targets (“Tranche I PSUs”) and half will vest upon the achievement of certain adjusted EBITDA-based performance targets (“Tranche II PSUs”) as determined by the Compensation Committee following the last day of the three Fair Value Determination The fair value of stock option, RSU and PSU awards is determined as of the grant date. For time-based stock options, a Black-Scholes valuation model is utilized to estimate the fair value of the awards. For performance-based stock options, a Monte Carlo simulation approach implemented in a risk-neutral framework is utilized to estimate the fair value of the awards. For RSUs and PSUs, the closing price of our common stock as reported on the grant date is utilized to estimate the fair value of the awards. We determine the input assumptions for the Black-Scholes stock option valuation model as follows: • Expected term — The expected term represents the period that a stock option award is expected to be outstanding. We have limited historical exercise data from which to derive expected term input assumptions. Consequently, we calculate expected term using the SEC simplified method whereby the expected term of a stock option award is equal to the average of the award's contractual term and vesting term. • Volatility — We have limited historical data from which to derive stock price volatility input assumptions. Consequently, we estimate stock price volatility for our common stock by taking the average historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option award. Industry peers consist of several public companies in our industry which are of similar size, complexity and stage of development. • Risk-free interest rate — The risk-free interest rate is based on the U.S. Treasury yield curve in effect on a stock option award's grant date for U.S Treasury securities with maturities that approximate the expected term of the stock option award. • Dividend yield — Dividend yield is assumed to be zero as we have not paid and do not expect to pay cash dividends on our common shares issued subsequent to our IPO. The respective valuation methods resulted in weighted-average grant date fair values for time-based stock options, performance-based stock options, RSUs, and PSUs granted during fiscal 2020, 2019 and 2018 as follows: Fiscal Year Ended January 2, December 28, December 29, Time-based stock options N/A $ 7.61 $ 2.96 Performance-based stock options N/A $ 5.78 $ 4.65 RSUs $ 37.07 $ 27.13 $ 10.36 PSUs $ 36.90 N/A N/A We did not award any time-based or performance-based stock options during fiscal 2020. The grant date fair value of time-based stock options awarded during fiscal 2019 and 2018 was estimated using the Black-Scholes valuation model with the following weighted-average assumptions: Fiscal Year Ended December 28, December 29, Exercise price $ 21.66 $ 11.98 Volatility 30.2 % 35.0 % Risk-free interest rate 1.9 % 2.6 % Dividend yield — % — % Expected term (in years) 6.83 2.80 Grant Activity The following table summarizes stock option activity under all equity incentive plans during fiscal 2020, 2019 and 2018: Time-Based Options Performance-Based Options Number of Options Weighted-Average Number of Options Weighted-Average Options outstanding at December 30, 2017 5,528,836 $ 7.27 5,525,860 $ 6.11 Granted 334,535 11.98 334,536 11.98 Exercised (2,946) 8.47 — — Forfeitures (62,050) 8.10 (65,066) 6.81 Options outstanding at December 29, 2018 (1) 5,798,375 $ 7.53 5,795,330 $ 4.40 Granted 1,363,822 21.66 99,788 17.29 Exercised (817,051) 7.21 — — Forfeitures (101,479) 12.72 (117,997) 7.15 Options outstanding at December 28, 2019 6,243,667 $ 10.57 5,777,121 $ 4.57 Granted — — — — Exercised (2,326,219) 7.29 (3,438,470) 4.55 Forfeitures (52,676) 20.63 (13,071) 16.47 Options outstanding at January 2, 2021 3,864,772 $ 12.42 2,325,580 $ 4.54 Options vested and exercisable at January 2, 2021 2,309,467 $ 7.45 2,325,580 $ 4.54 _______________________ (1) The decrease in weighted-average exercise price for outstanding performance-based options at December 29, 2018 was due to a dividend declared on October 22, 2018 pursuant to which all performance-based options outstanding at that date received a $2.10 downward adjustment to the exercise price. The total intrinsic value of time-based stock options exercised w as $68.7 million and $20.8 million for fiscal 2020 and 2019, respectively, and less than $0.1 million for fiscal 2018 . Intrin sic value represents the difference between the current fair value of the underlying stock and the exercise price of the stock option. The following table summarizes RSU activity under all equity incentive plans during fiscal 2020, 2019 and 2018: Number of Shares Weighted-Average Unvested balance at December 30, 2017 100,804 $ 7.51 Granted 34,200 10.36 Vested (54,184) 7.39 Forfeitures — — Unvested balance at December 29, 2018 80,820 $ 8.80 Granted 195,135 27.13 Vested (76,841) 18.06 Forfeitures (8,242) 30.03 Unvested balance at December 28, 2019 190,872 $ 22.89 Granted 277,496 37.07 Vested (115,030) 19.74 Forfeitures (11,496) 31.78 Unvested balance at January 2, 2021 341,842 $ 35.16 The following table summarizes PSU activity under the 2019 Plan during fiscal 2020: Number of Shares Weighted-Average Unvested balance at December 28, 2019 — $ — Granted (1) 272,640 36.90 Adjustment for expected performance achievement (2) 135,821 36.90 Vested — — Forfeitures (999) 36.88 Unvested balance at January 2, 2021 407,462 $ 36.90 _______________________ (1) Represents initial grant of PSUs based on performance target level achievement of 100%. (2) Represents the adjustment to previously granted PSUs based on current performance expectations. An additional 135,820 PSUs could potentially be included if the maximum performance level is reached. 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 qualifying for capitalization was insignificant for each of the fiscal years ended January 2, 2021, December 28, 2019 and December 29, 2018. Accordingly, no share-based compensation expense was capitalized during these years. Time-Based Stock Options We did not record compensation expense for time-based stock option grants prior to the closing of our IPO in June of fiscal 2019 because such time-based options were subject to a post-termination repurchase right by us until certain contingent events such as involuntary termination, a change in control, or an initial public offering occurred, and such contingent events were not deemed probable during fiscal 2018 or any other fiscal period prior to our IPO. As a result of this repurchase right feature, other than in limited circumstances, stock issued upon the exercise of these options could be repurchased at our discretion at the lower of fair value or the applicable exercise price. The repurchase right feature lapsed upon the closing of our IPO on June 24, 2019 (the "IPO closing date). Subsequent to the IPO closing date, we recognized share-based compensation expense for prior service completed as of the IPO closing date and began recognizing the remaining unamortized share-based compensation expense related to these outstanding time-based stock options over the remaining service period. During the fiscal years ended January 2, 2021 and December 28, 2019, we recognized $3.0 million and $25.7 million, respectively, of share-based compensation expense for time-based stock options. Unamortized compensation cost related to unvested time-based options was $6.7 million as of January 2, 2021, $5.9 million of which related to time-based stock options granted at the time of our IPO. The $6.7 million of unamortized compensation cost is expected to be amortized over a weighted average period of approximately 2.50 years. Performance-Based Stock Options We did not record compensation expense for performance-based stock options during the fiscal years ended December 28, 2019 and December 29, 2018 because the performance criteria of such awards had not been achieved and the ultimate vesting of the awards was not considered probable as of such dates. On February 3, 2020 and April 27, 2020, certain selling stockholders completed secondary public offerings of shares of our common stock. In conjunction with these secondary offerings, certain performance criteria were achieved resulting in the vesting of 4.1 million and 1.7 million performance-based stock options, respectively, and the recognition of $18.5 million and $7.6 million, respectively, of share-based compensation expense associated with the vesting of these performance-based stock options. As of January 2, 2021, all outstanding performance-based stock options are fully vested and fully expensed. Time-Based RSUs Shares-based compensation expense for RSUs held by employees and non-employee directors was $4.9 million, $2.1 million, and $0.4 million for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018, respectively. Unamortized compensation expense for RSUs was $8.4 million as of January 2, 2021, which is expected to be amortized over a weighted average period of approximately 2.26 years. Performance-Based RSUs During the fiscal year ended January 2, 2021 we recognized $3.7 million of share-based compensation expense for PSUs, which represents the expense associated with the expected level of performance achievement as of January 2, 2021. There were no such amounts recognized in the comparable prior year periods as PSUs only began being granted during fiscal 2020. Unamortized compensation cost related to the expected level of achievement of unvested PSUs was $11.4 million as of January 2, 2021, which is expected to be amortized over a weighted average period of approximately 2.00 years. Dividends For time-based stock options and RSUs that were outstanding on the dividend dates of June 23, 2016 and October 22, 2018 and that are expected to vest in fiscal year 2021 and beyond, we intend to make dividend payments as these time-based stock options and RSUs vest. Pursuant to the 2014 Plan, if we are unable to make those payments, we may instead elect to reduce the per share exercise price of each such time-based stock option by an amount equal to the dividend amount in lieu of making the applicable dividend payme nt. As such, our dividends are not considered declared and payable and are not accrued as a liability in our consolidated balance sheet as of January 2, 2021. We paid $0.4 million and $3.6 million of d |
Retirement Plans
Retirement Plans | 12 Months Ended |
Jan. 02, 2021 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans We make payments into the UFCW—Northern California Employers Joint Pension Trust Fund (the “Pension Fund”) and the UFCW—Benefits Trust Fund (“Benefits Fund”), multiemployer pension and welfare trusts, established for the benefit of union employees at two company operated stores under the terms of a collective bargaining agreement. We currently operate under a collective bargaining agreement that expires on September 6, 2022. Payments into the Pens ion Fund we re $0.6 million, $0.4 million, and $0.4 million for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018, respectively. Payments into the Benefits Fund were $1.4 million, $1.2 million, and $1.1 million for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018, respectively. Such contributions represent less than 5% of the total contributions to the Fund. We paid no surcharges to the Fund. In addition, minimum contributions outside of the agreed upon contractual rates are not required. The risks of participating in a multiemployer pension plan are different from single-employer pension plans in the following aspects: a. Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. b. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. c. If we stop participating in its multiemployer pension plan, we may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. The following information represents our participation in the plan for the annual period ended December 31, 2019, the latest available information from the Fund. All such information is based on information we received from the plan. The Fund’s Employer Identification Number and Plan Number is 946313554-001. Under the provisions of the Pension Protection Act (PPA) zone status, the Fund was in critical status during the plan year. Among other factors, generally, plans in critical status are less than 65 percent funded. In an effort to improve the Plan’s funding situation, the trustees adopted a rehabilitation plan on July 8, 2010. The rehabilitation plan changes the benefits for participants who retire and commence a pension on or after January 1, 2012, and changes future benefit accruals earned on or after January 1, 2012. Except in limited circumstances, the pensions of participants and beneficiaries whose pension effective date is before January 1, 2012, are not affected. For our nonunion employees, we offer the following plans: a. A defined contribution retirement plan for warehouse employees, which requires an annual contribution of 15% of eligible salaries. This defined contribution retirement plan is available to nonunion employees who meet certain service criteria. b. A noncontributory profit-sharing plan for administrative personnel under which the board of directors may authorize an annual contribution of up to 15% of eligible salaries. This profit-sharing plan is available to nonunion employees who meet certain service criteria. We expensed $6.1 million, $4.4 million and $3.6 million for contributions to the two plans described above in (a) and (b) for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018, respectively. c. A 401(k) retirement plan for warehouse employees, which is available to those employees who meet certain service criteria d. A 401(k) retirement plan for administrative personnel, which is available to those employees who meet certain service criteria. e. We are not obligated to match any employee contributions for the 401(k) retirement plans. However, for certain employees who meet certain service criteria, we have a 401(k) retirement plan under which we will match employee contributions at a rate of 35% of each participating employee’s contributions, not to exceed 6% of wages. We expensed an insignificant amount for contributions to this plan for each of the fiscal years ending January 2, 2021, December 28, 2019, and December 29, 2018, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Impact of U.S. Tax Reform Tax Cuts and Jobs Act On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act") was enacted. The Tax Act made broad changes to the U.S. tax code, including, but not limited to, (i) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; (ii) eliminating the corporate alternative minimum tax (AMT); (iii) a new limitation on deductible business interest expense; (iv) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017; and (v) expanding bonus depreciation to allow full expensing of qualified property. For the fiscal year ended December 30, 2017, we recognized a provisional tax benefit of $5.4 million due to the enactment of the Tax Act in our consolidated financial statements which was associated with the re-measurement of our deferred tax assets and liabilities. During the fiscal year ended December 29, 2018, we finalized our accounting for the impacts of the Tax Act and recorded an immaterial measurement period adjustment associated with the re-measurement of our deferred tax assets and liabilities. CARES Act On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was enacted. We have analyzed the provision, which provides for, (i) changes in the deductibility of business interest; (ii) acceleration of alternative minimum tax credit refunds; and (iii) a technical correction to allow accelerated deductions for qualified leasehold improvements. The technical correction allows us to accelerate deductions for qualified assets placed in service in the current and prior years, however, the CARES Act is not otherwise expected to have a material impact on our income tax provision for fiscal 2020. Components of income tax expense (benefit) Income before income taxes consisted entirely of income from domestic operations of $87.1 million, $16.8 million, and $21.9 million for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018, respectively. The components of income tax expense (benefit) consisted of the following (amounts in thousands): Fiscal Year Ended January 2, December 28, December 29, Current: Federal $ (285) $ 52 $ (200) State 284 439 353 Total current (1) 491 153 Deferred: Federal (14,682) 247 4,523 State (4,896) 625 1,308 Total deferred (19,578) 872 5,831 Income tax expense (benefit) $ (19,579) $ 1,363 $ 5,984 Statutory rate reconciliation A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is as follows: Fiscal Year Ended January 2, December 28, December 29, Taxes at federal statutory rates 21.0 % 21.0 % 21.0 % State income taxes net of federal benefit (4.2) % 5.2 % 6.0 % Excess federal tax benefits from exercise and vest of share-based awards (40.3) % (21.4) % — % Other 1.0 % 3.3 % 0.4 % Effective income tax rate (22.5) % 8.1 % 27.4 % Deferred income taxes Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities were as follows (amounts in thousands): January 2, December 28, Deferred tax assets: Accrued compensation $ 6,362 $ 3,411 Share-based compensation expense 8,891 6,323 Inventory 4,594 4,216 Transaction costs 1,152 1,334 Lease liability obligation 258,093 221,747 Net operating loss and other carryforwards 58,596 24,936 Reserves and allowances 3,092 3,974 Interest expense carryforward — 1,103 Other 4,194 1,176 Total deferred tax assets 344,974 268,220 Deferred tax liabilities: Prepaid expenses (1,096) (1,042) Depreciation and amortization (64,814) (43,213) Intangible assets (7,802) (8,417) Right-of-use assets (234,022) (203,065) Goodwill (32,691) (27,230) Debt transaction costs (1,020) (1,273) Total deferred tax liabilities (341,445) (284,240) Net deferred tax assets (liabilities) $ 3,529 $ (16,020) We have net operating loss carryforwards of $238.5 million for federal income tax purposes, of which $103.9 million expires beginning in 2032 and $134.6 million carries forward indefinitely. There are also net operating loss carryforwards of $80.0 million for state income tax purposes, which begin to expire in 2031. Certain tax attributes, which begin to expire in 2031, are subject to an annual limitation as a result of our acquisition of GOBP Holdings, our wholly owned subsidiary, which constitutes a change in ownership as defined under Internal Revenue Code Section 382. Based on our analysis, our projected net operating losses to be utilized in future years will not be affected by this annual limitation. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of the existing deferred tax assets. A significant piece of objective positive evidence was the cumulative income incurred over the three-year period ended January 2, 2021. Based on our current assessment, we anticipate it is more likely than not that we will generate sufficient taxable income to realize all of our material deferred tax assets. As such we did not record a valuation allowance against these material deferred tax assets as of January 2, 2021. Our policy is to include interest and penalties associated with uncertain tax positions within income tax expense and include accrued interest and penalties with the related income tax liability on our consolidated balance sheets. To date, we have not recognized any interest and penalties in our consolidated statements of operations and comprehensive income and do not anticipate any changes in our uncertain tax position within the next 12 months. We are subject to taxation in the United States and various state jurisdictions. As of January 2, 2021, our tax returns remain open to examination by the tax authorities for tax years 2010 to 2020 for U.S. federal and for various state jurisdictions. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jan. 02, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Related Party Lease s We leased property from entities affiliated with certain of our non-controlling stockholders for 15 store locations and one warehouse location as of both January 2, 2021 and December 28, 2019. Affiliated entities received aggregate annual lease payments from us of $6.0 million, $6.1 million , and $6.6 million for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018, respectively. During April 2020, we entered into an aircraft dry lease agreement (the "Aircraft Lease") with an entity controlled by our Chief Executive Officer, Mr. Lindberg, to lease a Pilatus PC-12 aircraft. We believe that this agreement provides us better access to visit our stores, many of which are in remote areas or are not easily accessible by car or regular commercial airline service, and to visit prospective real estate sites. The Aircraft Lease gives us the ability to use the aircraft in the course of our operations on an as-needed, non-exclusive basis. The Aircraft Lease provides that we pay an hourly lease rate and we bear all direct operating costs associated with our use of the aircraft, and the lessor bears all fixed costs (e.g. maintenance, hangar, insurance). Mr. Lindberg, to the extent that he operates the aircraft for his personal use, will bear all costs associated with his operation of the aircraft. We believe that the terms of the aircraft lease are no less favorable than could be obtained from an unrelated third party and we believe that the foregoing arrangement, including related direct operating costs, insurance and crew costs, will reduce our average hourly cost for use of private aircraft, which previously had been primarily conducted through charter arrangements. Operating lease costs related to the aircraft lease are included in SG&A, and were less than $0.1 million for fiscal 2020. Independent Operator Notes and Receivables We offer interest-bearing notes to IOs and the gross operating notes and receivables due from these IOs wa s $41.0 million an d $37.7 million as of January 2, 2021 and December 28, 2019, respectively. See NOTE 2—Independent Operator Notes and Receivables, for additional information. Other We have business contracts with two portfolio companies of the H&F Investor, The Ultimate Software Group, Inc. and HUB International Limited. On May 28, 2020, the H&F Investor ceased being a related party when it distributed the remainder of its holdings in our common stock to its equity holders. Payments to these two portfolio companies totaled $0.2 million from December 29, 2019 through May 28, 2020, $0.7 million for the fiscal year ended December 28, 2019, and $0.3 million for the fiscal year ended December 29, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 02, 2021 | |
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 do not believe the impact of such litigation will have a material adverse effect on our consolidated financial statements taken as a whole. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Jan. 02, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Earnings Per Share Attributable to Common Stockholders A reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share attributable to common stockholders is as follows (dollars and shares in thousands, except per share amounts): Fiscal Year Ended January 2, December 28, December 29, Numerator Net income attributable to common stockholders $ 106,713 $ 15,419 $ 15,868 Denominator Weighted-average shares of common stock 91,818 79,044 68,473 Effect of dilutive RSUs 96 42 73 Effect of dilutive options 6,538 2,777 — Weighted-average shares of common stock - diluted (1) (2) (3) 98,452 81,863 68,546 Earnings per share attributable to common stockholders: Basic $ 1.16 $ 0.20 $ 0.24 Diluted $ 1.08 $ 0.19 $ 0.23 _______________________ (1) The diluted weighted-average shares outstanding for the fiscal years ended December 28, 2019 and December 29, 2018 did not include performance-based stock options because the requisite performance criteria of such stock options had not been achieved as of that date. On February 3, 2020, in conjunction with a secondary offering, certain performance criteria were achieved resulting in the vesting of 4.1 million performance-based stock options, and accordingly, these vested performance-based stock options are included in the diluted weighted-average shares outstanding for fiscal year 2020. On April 27, 2020 in conjunction with an additional secondary offering, certain performance criteria were achieved resulting in the vesting of the remaining 1.7 million unvested performance-based stock options, and accordingly, these vested performance-based stock options are included in the diluted weighted-average shares outstanding for fiscal year 2020. See NOTE 7—Share-based Awards, for additional information. (2) The diluted weighted-average shares for the fiscal year ended December 29, 2018 did not include time-based stock options because such options were subject to a post-termination repurchase right by us until the occurrence of a qualifying contingent event occurred (involuntary termination, change in control or initial public offering), and the occurrence of such an event was not deemed probable. Upon the completion of our IPO in June of fiscal 2019, a qualifying contingent event had occurred and therefore time-based stock options were included in the weighted-average diluted shares for the fiscal years ended January 2, 2021 and December 28, 2019. See NOTE 7—Share-based Awards, for additional information. (3) 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 fiscal year ended January 2, 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): Fiscal Year Ended January 2, December 28, December 29, RSUs 3,239 50 — Time-based stock options — 682 — Total 3,239 732 — |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (unaudited) | 12 Months Ended |
Jan. 02, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (unaudited) | Selected Quarterly Financial Data (unaudited) Selected unaudited summarized quarterly financial information for fiscal 2020 and 2019 was as follows (amounts in thousands, except per share data): First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal 2020 Net sales $ 760,308 $ 803,429 $ 764,082 $ 806,821 Gross Profit 237,026 253,751 238,183 244,387 Income from operations 16,873 32,359 30,315 27,828 Net income 12,642 29,333 40,474 24,264 Basic earnings per share $ 0.14 $ 0.32 $ 0.44 $ 0.26 Diluted earnings per share $ 0.13 $ 0.30 $ 0.41 $ 0.24 Fiscal 2019 Net sales $ 606,271 $ 645,289 $ 652,540 $ 655,517 Gross Profit 187,017 198,720 201,087 200,278 Income from operations 21,656 5,735 23,948 17,004 Net income (loss) 3,774 (10,632) 12,445 9,832 Basic earnings per share $ 0.06 $ (0.15) $ 0.14 $ 0.11 Diluted earnings per share $ 0.06 $ (0.15) $ 0.13 $ 0.11 |
Schedule I_Condensed Financial
Schedule I—Condensed Financial Information of Registrant | 12 Months Ended |
Jan. 02, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule I—Condensed Financial Information of Registrant | Schedule I—Condensed Financial Information of Registrant GROCERY OUTLET HOLDING CORP. CONDENSED BALANCE SHEETS (PARENT COMPANY ONLY) (in thousands, except share and per share amounts) January 2, December 28, Assets Investment in wholly owned subsidiary $ 923,816 $ 746,628 Total assets $ 923,816 $ 746,628 Liabilities and Stockholders’ Equity Intercompany payable $ 1,509 $ 1,244 Total liabilities 1,509 1,244 Stockholders’ equity: Capital stock: Voting common stock, par value $0.001 per share, 500,000,000 shares authorized; 94,854,336 and 89,005,062 shares issued and outstanding, respectively 95 89 Series A Preferred stock, par value $0.001 per share, 50,000,000 shares authorized; no shares issued and outstanding — — Additional paid-in capital 787,047 717,282 Retained earnings 135,165 28,013 Total stockholders’ equity 922,307 745,384 Total liabilities and stockholders’ equity $ 923,816 $ 746,628 See Notes to Condensed Financial Statements (Parent Company Only) GROCERY OUTLET HOLDING CORP. CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (PARENT COMPANY ONLY) (in thousands) Fiscal Year Ended January 2, December 28, December 29, Operating expenses $ 265 $ 273 $ 216 Operating loss (265) (273) (216) Loss before equity in net income of subsidiary (265) (273) (216) Equity in net income of subsidiary, net of tax 106,978 15,692 16,084 Net income and comprehensive income $ 106,713 $ 15,419 $ 15,868 See Notes to Condensed Financial Statements (Parent Company Only) GROCERY OUTLET HOLDING CORP. CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY ONLY) (in thousands) Fiscal Year Ended January 2, December 28, December 29, Cash flows from operating activities: Net income $ 106,713 $ 15,419 $ 15,868 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in net income of subsidiary (106,978) (15,692) (16,084) Dividend received from subsidiary (return on capital) — — 27,351 Changes in operating assets and liabilities: Other current assets — 497 (497) Net cash provided by (used in) operating activities (265) 224 26,638 Cash flows from investing activities: Investment in subsidiary (32,121) (402,050) — Dividend received from subsidiary (return of capital) — — 126,236 Net cash provided by (used in) investing activities (32,121) (402,050) 126,236 Cash flows from financing activities: Intercompany payables 265 (409) 718 Proceeds from initial public offering, net of underwriting discounts — 407,666 — Proceeds from exercise of share-based compensation awards 32,604 4,444 29 Payments related to net settlement of share-based compensation awards (483) (2,813) (34) Other direct costs paid related to the initial public offering — (7,062) — Dividend paid to shareholders — — (153,587) Net cash provided by (used in) financing activities 32,386 401,826 (152,874) Net increase (decrease) in cash and cash equivalents — — — Cash and cash equivalents at beginning of period — — — Cash and cash equivalents at end of period $ — $ — $ — See Notes to Condensed Financial Statements (Parent Company Only) GROCERY OUTLET HOLDING CORP. NOTES TO CONDENSED FINANCIAL STATEMENTS (PARENT COMPANY ONLY) NOTE 1—Description of Grocery Outlet Holding Corp. Grocery Outlet Holding Corp. (the "Parent Company") owns 100% of Globe Intermediate Corp. ("Intermediate"), which owns 100% of GOBP Holdings, Inc. ("GOBP Holdings"), which owns 100% of GOBP Midco, Inc. ("Midco"), which owns 100% of Grocery Outlet Inc. ("GOI"). GOI is a high-growth, extreme value retailer of quality, name-brand consumables and fresh products sold through a network of independently operated stores. The Parent Company was incorporated in Delaware on September 11, 2014 and became the ultimate parent of GOI on October 7, 2014. The Parent Company has no operations or significant assets or liabilities other than its investment in Intermediate. Accordingly, the Parent Company is dependent upon distributions from Intermediate to fund its limited, non-significant operating expenses. However, GOBP Holdings’ and GOI’s ability to pay dividends or lend to Intermediate or the Parent Company is limited under the terms of various debt agreements. Intermediate and GOBP Holdings are parties to credit facilities that contain covenants limiting the Parent Company's ability and the ability of its restricted subsidiaries to, among other things: pay dividends or distributions, repurchase equity, prepay junior debt and make certain investments; incur additional debt or issue certain disqualified stock and preferred stock; incur liens on assets; merge or consolidate with another company or sell all or substantially all assets; enter into transactions with affiliates; and enter into agreements that would restrict its subsidiaries to pay dividends or make other payments to the Parent Company. Due to the aforementioned qualitative restrictions, substantially all of the assets of the Parent Company's subsidiaries are restricted. These covenants are subject to important exceptions and qualifications as described in such credit facilities. NOTE 2—Basis of Presentation The accompanying condensed financial statements (parent company only) include the accounts of the Parent Company and its investment in Intermediate, accounted for in accordance with the equity method, and do not present the financial statements of the Parent Company and its subsidiary on a consolidated basis. These parent company only financial statements should be read in conjunction with the Parent Company's consolidated financial statements and notes thereto, included elsewhere in this Annual Report on Form 10-K. All share amounts and per share disclosures for all periods presented reflect a 1.403 for 1 forward stock split effected on June 6, 2019. NOTE 3—Dividends from Subsidiaries The Parent Company received a dividend from Intermediate of $153.6 million on October 22, 2018 for the fiscal year ended December 29, 2018. This dividend has been reflected as a reduction to investment in wholly owned subsidiary in the accompanying condensed financial statements. On the same date, the Parent Company declared a dividend of $153.6 million to holders of its common stock. This dividend has been reflected as a $27.4 million return on capital and a $126.2 million return of capital in the accompanying condensed financial statements. NOTE 4—Initial Public Offering In June 2019, we completed an initial public offering ("IPO") of 19,765,625 shares of our common stock at a public offering price of $22.00 per share for net proceeds of $407.7 million, after deducting underwriting discounts and commissions of $27.1 million. We also incurred offering costs payable by us of $7.2 million. The shares of common stock sold in the IPO and the net proceeds from the IPO included the full exercise of the underwriters’ option to purchase additional shares. On October 8, 2019, certain of our selling stockholders completed a secondary public offering of shares of our common stock. We did not receive any of the proceeds from the sale of these shares by the selling stockholders. We incurred offering costs payable by us of $1.1 million which are included in selling, general and administrative expenses ("SG&A") for fiscal 2019. We received $3.2 million in cash (excluding withholding taxes) in connection with the exercise of 451,470 options by certain stockholders participating in this secondary public offering. On February 3, 2020, certain selling stockholders completed an additional secondary public offering of shares of our common stock. We did not receive any of the proceeds from the sale of these shares by the selling stockholders. We incurred offering costs of $1.1 million, which were recognized in SG&A expenses during fiscal 2020. We received $1.4 million in cash (excluding withholding taxes) in connection with the exercis e of 191,470 opti ons by certain stockholders participating in this secondary public offering. On April 27, 2020, certain of our selling stockholders completed another secondary public offering of shares of our common stock. We did not receive any of the proceeds from the sale of these shares by the selling stockholders. We incurred related offering costs of $1.0 million which we recognized in SG&A expenses during fiscal 2020. We received $1.6 million in cash (excluding withholding taxes) in connection with the exercise of 269,000 options by certain stockholders participating in this secondary public offering. On May 28, 2020, the stockholder affiliated with our former private equity sponsor, Hellman and Friedman LLC, distributed the remainder of its holdings representing 9.6 million shares of our common stock to its equity holders. We did not receive any proceeds or incur any material costs related to this distribution. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 02, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying 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 U.S. Securities and Exchange Commission (the "SEC"). Our 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 consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the periods presented. |
Use of Estimates | The preparation of 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. All of our sales were made to customers located in the United States and all property and equipment is located in the United States. |
Cash and Cash Equivalents | We consider all highly liquid investments, purchased with original maturities of three months or less, to be cash equivalents. All cash equivalents are unrestricted and available for immediate use. |
Allowance for Independent Operator (“IO”) Receivables and Notes and Other Accounts Receivable | We maintain allowances and accruals for estimated losses of amounts advanced to IOs and other third parties determined to be uncollectible. See NOTE 2 — Independent Operator Notes and Receivables, for additional information. |
Concentration of Credit Risk | Financial instruments which potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts and notes receivable. Although we deposit our cash with creditworthy financial institutions, our deposits typically exceed federally insured limits. To date, we have not experienced any losses on our cash deposits. No single customer or store represented more than 10% of net sales for the years ended January 2, 2021, December 28, 2019 and December 29, 2018. No single customer or IO represented more than 10% of accounts receivable or notes receivable as of January 2, 2021 and December 28, 2019. |
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. |
Property and Equipment | Property and equipment is stated at cost less accumulated depreciation and includes expenditures for significant improvements to leased premises. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, generally ranging from three one |
Leases | Operating leases are included in operating lease right-of-use assets, current lease liabilities, and long-term lease liabilities on our consolidated balance sheets. Finance leases are included in other assets, current lease liabilities, and long-term lease liabilities on our 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. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Amortization of finance lease right-of-use assets, interest expense on finance lease liabilities and operating and financing cash flows for finance leases are immaterial.We have lease agreements with retail facilities for store locations, distribution centers, office space and equipment with lease and non-lease components, which are accounted for separately. Leases with an initial term of 12 months or less are not recorded on the balance sheet; lease expense for these leases is recognized on a straight-line basis over the lease term. The short-term lease expense is reflective of the short-term lease commitments on a go-forward basis. We sublease certain real estate to unrelated third parties under non-cancelable leases and the sublease portfolio consists of operating leases for retail stores. |
Goodwill and Other Intangible Assets | We have both goodwill and intangible assets recorded on our consolidated balance sheets. Goodwill represents the difference between the purchase price and the fair value of assets and liabilities acquired in a business combination. Goodwill is not amortized, but rather is subject to an annual impairment evaluation which is performed during our fourth quarter or when events or changes in circumstances indicate that the value of goodwill may be impaired. Our impairment evaluation of goodwill consists of an initial qualitative assessment of our reporting unit to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than its carrying value. If it is concluded that this is the case, a quantitative evaluation, based on discounted cash flows, is performed which requires us to estimate future cash flows, growth rates and economic and market conditions. If the quantitative evaluation indicates that goodwill is not recoverable, an impairment loss is calculated and recognized during that period. Measurement of such an impairment loss would be based on the excess of the carrying amount over fair value. There were no goodwill impairment charges recorded during the fiscal years ended January 2, 2021, December 28, 2019 and December 29, 2018. There were no changes in the carrying amount of goodwill for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018. Intangible assets include trademarks, computer software, and liquor licenses. Trademarks represent the value of all our trademarks and trade names in the marketplace. We are amortizing the value assigned to the trade names on a straight-line basis over 15 years. Computer software includes both acquired software and eligible costs to develop internal-use software that are incurred during the application development stage. These assets are amortized over their estimated useful lives of 3 years. Liquor license assets have been classified as indefinite-lived intangible assets and accordingly, are not subject to amortization. We review our intangible assets for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of the intangible assets are not recoverable, the impairment is measured as the amount by which the carrying value of the intangible asset exceeds its fair value. |
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 basis as of January 2, 2021 or December 28, 2019. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. See NOTE 3—Property and Equipment and NOTE 5—Goodwill and Intangible Assets, for additional information. There were no transfers of assets or liabilities between levels within the fair value hierarchy as of January 2, 2021 or December 28, 2019. Our financial assets and liabilities are carried at cost, which generally approximates their fair value, as described below: Cash and cash equivalents, 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. |
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. 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 sales as the products are sold. Discounts provided by IOs are not recognized as a reduction in 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 January 2, 2021 and December 28, 2019. Gift Cards — |
Marketing and Advertising Expenses | Costs for store promotions, newspaper, television, radio and other media advertising are expensed at the time the promotion or advertising takes place. Advertising costs are included in SG&A in the accompanying consolidated statements of operations and comprehensive income |
Share-based Awards | We estimate the fair value of time-based stock option awards subject to only a service condition on the date of grant using the Black-Scholes valuation model. The Black-Scholes model requires the use of certain input assumptions. Because we completed our IPO during fiscal 2019, we have limited historical exercise data from which to derive such input assumptions, including an option's expected term and the price volatility of the underlying stock. Consequently, we determine the expected term using an accepted, simplified formula which derives an expected term by taking the sum of the contractual term and adding the length of the vesting period and dividing by two. We estimate stock price volatility for our common stock by taking the average historic price volatility for industry peers based on daily price observations over a period equivalent to the expected term of the stock option grants. Industry peers consist of several public companies in our industry which are of similar size, complexity and stage of development. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury implied yield at the date of grant. We estimate the fair value of performance-based stock option awards subject to both a market condition and a performance condition on the date of grant using a Monte Carlo simulation approach implemented in a risk-neutral framework. We estimate the fair value of restricted stock units ("RSUs") and performance-based restricted stock units ("PSUs") based upon the closing price of our common stock as reported on the Nasdaq Global Select Market on the date of grant. We recognize compensation expense for share-based payment awards with only a service condition on a straight-line basis over the requisite service period, which is generally the award’s vesting period. Vesting of these awards would be accelerated for certain employees in the event of a change in control. Compensation expense for share-based payment awards subject to vesting based upon the achievement of a performance condition is recognized on a graded-vesting basis at the time the achievement of the performance condition becomes probable. We recognize share-based award forfeitures as they occur rather than estimating by applying a forfeiture rate. |
Income Taxes | Income taxes are accounted for using an asset and liability approach that requires recognition of deferred tax assets and liabilities for expected future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. In estimating future tax consequences, all expected future events are considered, other than changes in the tax law. A valuation allowance is established, when necessary, to reduce net deferred income tax assets to the amount expected to be realized. We have not recorded any valuation allowances against our deferred income tax balances for the fiscal years ended January 2, 2021 and December 28, 2019. Significant items comprising our future tax benefits and liabilities (deferred tax assets and liabilities) include net operating losses, depreciation and amortization, goodwill, intangible assets, lease liability obligations and right-of-use assets.We recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We record uncertain tax positions in accordance with ASC Topic 740, Income Taxes, on the basis of a two-step process in which (i) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. |
Variable Interest Entities | In accordance with the variable interest entities sub-section of 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 375, 342 and 308 stores operated by IOs as of January 2, 2021, December 28, 2019 and December 29, 2018, respectively. We have agreements in place with each IO. The IO orders its merchandise exclusively from us, which is provided to the IO on consignment. Under the Independent Operator Agreement (the "Operator Agreement"), the IO may select 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 ass ets. 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. Sales related to IO stores were $3.1 billion, $2.5 billion , and $2.2 billion for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018, respectively. We, in turn, pay IOs a commission based on a share of the gross profit of the store. Inventories and related 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 $469.3 million, $382.8 million, and $340.0 million for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018, respectively. IO commissions of $6.0 million and $6.1 million were included in accrued expenses as of both January 2, 2021 and December 28, 2019, 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—Independent Operator Notes and Receivables. 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 its 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, |
Net Income Per Share | Basic net income per share is calculated using net income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted net income per share reflects the dilutive effects of stock options and RSUs outstanding during the period, to the extent such securities would not be anti-dilutive, and is determined using the treasury stock method. |
Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Standards ASU No. 2016-13 — In June 2016, Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13, which was further updated and clarified by the FASB through issuance of additional related ASUs, amends the guidance surrounding measurement and recognition of credit losses on financial assets measured at amortized cost, including trade receivables and debt securities, by requiring recognition of an allowance for credit losses expected to be incurred over an asset’s lifetime based on relevant information about past events, current conditions, and reasonable and supportable forecasts impacting the financial asset's ultimate collectability. This “expected loss” model will likely result in earlier recognition of credit losses than the previous “as incurred” model, under which losses were recognized only upon an occurrence of an event that gave rise to the incurrence of a probable loss. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and is to be adopted on a modified retrospective basis. We adopted ASU 2016-13 on December 29, 2019. The adoption of ASU 2016-13 resulted in a $0.4 million cumulative-effect increase to the opening balance of retained earnings. The adoption of the new standard did not have a material impact on our consolidated statements of operations and comprehensive income or consolidated statements of cash flows. See NOTE 2—Independent Notes and Operator Receivables for additional information. ASU No. 2018-15 — In August 2018, FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective retrospectively for fiscal years and interim periods within those years beginning after December 15, 2019. We adopted ASU 2018-15 on December 29, 2019. The adoption of ASU 2018-15 did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements ASU No. 2019-12 —In December 2019, FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies accounting guidance for certain tax matters including franchise taxes, certain transactions that result in a step-up in tax basis of goodwill, and enacted changes in tax laws in interim periods. In addition, it eliminates a company’s need to evaluate certain exceptions relating to the incremental approach for intra-period tax allocation, accounting for basis differences when there are ownership changes in foreign investments, and interim period income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We will adopt ASU 2019-12 beginning in the first quarter of fiscal 2021. We do not expect the adoption of ASU 2019-12 to have a material impact on our consolidated financial statements. |
Property, Plant and Equipment, Impairment | Long-lived assets were evaluated for potential impairment by measuring their fair value on a nonrecurring basis. Fair value of long-lived assets is determined by estimating the amount and timing of net future cash flows (including rental expense for leased properties, sublease rental income, common area maintenance costs, and real estate taxes) and discounting them using a risk-adjusted rate. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial liabilities not reported at fair value | 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 consolidated balance sheets (amounts in thousands): January 2, December 28, Carrying Amount (1) Estimated Fair Value (2) Carrying Amount (1) Estimated Fair Value (2) Financial Liabilities: Term loans (Level 2) $ 458,757 $ 460,000 $ 458,682 $ 466,515 _______________________ (1) The carrying amounts as of January 2, 2021 and December 28, 2019 are net of unamortized debt discounts of $1.2 million and $1.5 million, respectively. (2) The estimated fair value of our term loans was determined based on the average quoted bid-ask prices for the term loans in an over-the-counter market on the last trading day of fiscal 2020 and 2019. |
Schedule of sales revenue by product | The following table presents sales revenue by type of product for the fiscal years ended January 2, 2021, December 28, 2019, and December 29, 2018 (amounts in thousands): January 2, December 28, December 29, Perishable (1) $ 1,054,506 $ 868,109 $ 768,373 Non-perishable (2) 2,080,134 1,691,508 1,519,287 Total sales (3) $ 3,134,640 $ 2,559,617 $ 2,287,660 _______________________ (1) Perishable departments include dairy and deli; produce and floral; and fresh meat and seafood. (2) Non-perishable departments include grocery; general merchandise; health and beauty care; frozen foods; and beer and wine. (3) The fiscal year ended January 2, 2021 contained 53 weeks while each of the fiscal years ended December 28, 2019 and December 29, 2018 contained 52 weeks. |
Independent Operator Notes an_2
Independent Operator Notes and Receivables (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Receivables [Abstract] | |
Schedule of amounts due from independent operators | Amounts due from IOs and the related allowances as of January 2, 2021 and December 28, 2019 consisted of the following (amounts in thousands) : Allowance Current Portion Long-term Portion Gross Current Portion Long-term Portion Net January 2, 2021 Independent operator notes $ 37,238 $ (514) $ (7,124) $ 29,600 $ 2,160 $ 27,440 Independent operator receivables 3,754 (471) — 3,283 3,283 — Total $ 40,992 $ (985) $ (7,124) $ 32,883 $ 5,443 $ 27,440 Allowance Current Portion Long-term Portion Gross Current Portion Long-term Portion Net December 28, 2019 Independent operator notes $ 31,952 $ (678) $ (9,088) $ 22,186 $ 1,855 $ 20,331 Independent operator receivables 5,753 (605) — 5,148 5,148 — Total $ 37,705 $ (1,283) $ (9,088) $ 27,334 $ 7,003 $ 20,331 |
Schedule of allowance for credit loss activity | A summary of IO notes and receivables allowance activity is as follows (amounts in thousands): Fiscal Year Ended January 2, December 28, December 29, Balance at beginning of year $ 10,371 $ 9,067 $ 9,031 Provision for independent operator notes and receivables (473) 2,741 1,029 Cumulative effect of accounting change (439) — — Write-off of provision for independent operator notes and receivables (1,350) (1,437) (993) Balance at end of year $ 8,109 $ 10,371 $ 9,067 |
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 January 2, 2021 (amounts in thousands): Credit Quality Indicator 2020 2019 2018 2017 2016 Prior Total TCAP $ 1,375 $ 2,321 $ 1,333 $ 186 $ 194 $ — $ 5,409 Non-TCAP 3,856 5,693 5,603 2,382 961 270 18,765 New store 8,628 4,436 — — — — 13,064 Total $ 13,859 $ 12,450 $ 6,936 $ 2,568 $ 1,155 $ 270 $ 37,238 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment as of January 2, 2021 and December 28, 2019 consisted of the following (amounts in thousands): Property and Equipment, At Cost Accumulated Depreciation Property and Equipment, Net January 2, 2021 Leasehold improvements $ 275,586 $ (70,999) $ 204,587 Fixtures and equipment 330,338 (134,820) 195,518 Other 376 (282) 94 Construction in progress 33,453 — 33,453 Totals $ 639,753 $ (206,101) $ 433,652 December 28, 2019 Leasehold improvements $ 225,496 $ (53,733) $ 171,763 Fixtures and equipment 274,523 (105,886) 168,637 Other 383 (269) 114 Construction in progress 16,100 — 16,100 Totals $ 516,502 $ (159,888) $ 356,614 Depreciation expense on property and equipment for fiscal 2020, 2019 and 2018 was as follows (amounts in thousands): Fiscal Year Ended Consolidated Statements of Operations and Comprehensive Income Location January 2, December 28, December 29, Cost of sales $ 1,299 $ 1,210 $ 1,265 Operating expenses 49,450 41,696 35,787 Total depreciation expense on property and equipment $ 50,749 $ 42,906 $ 37,052 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Leases [Abstract] | |
Schedule of balance sheet classifications | The balance sheet classification of our right-of-use lease assets and lease liabilities was as follows (amounts in thousands): Leases Classification January 2, December 28, Assets: Operating lease assets Operating right-of-use assets $ 835,397 $ 734,327 Finance lease assets Other assets 5,973 5,904 Total lease assets $ 841,370 $ 740,231 Liabilities: Current Operating Current lease liabilities $ 47,730 $ 37,923 Finance Current lease liabilities 945 322 Noncurrent Operating Long-term lease liabilities 876,329 762,105 Finance Long-term lease liabilities 5,109 5,651 Total lease liabilities $ 930,113 $ 806,001 |
Schedule of lease cost | The components of lease expense were as follows (amounts in thousands): Fiscal Year Ended Lease Cost Classification (1) January 2, December 28, Operating lease cost Selling, general and administrative expenses $ 112,096 $ 99,237 Finance lease cost: Amortization of right-of-use assets Depreciation and amortization 964 817 Interest on leased liabilities Interest expense, net 376 263 Variable lease cost Selling, general and administrative expenses 700 668 Sublease income Selling, general and administrative expenses (972) (1,248) Net lease cost $ 113,164 $ 99,737 _______________________ (1) Certain supply chain related lease costs herein are included in cost of sales. |
Schedule of maturities of lease liabilities | Maturities of lease liabilities as of January 2, 2021 were as follows (amounts in thousands): Operating Leases Finance Leases Total Fiscal 2021 $ 112,249 $ 1,279 $ 113,528 Fiscal 2022 113,556 1,226 114,782 Fiscal 2023 113,351 1,124 114,475 Fiscal 2024 112,763 1,058 113,821 Fiscal 2025 111,191 827 112,018 Thereafter 818,237 1,862 820,099 Total lease payments 1,381,347 7,376 $ 1,388,723 Less: Imputed interest (457,288) (1,322) Present value of lease liabilities $ 924,059 $ 6,054 |
Schedule of maturities of lease liabilities | Maturities of lease liabilities as of January 2, 2021 were as follows (amounts in thousands): Operating Leases Finance Leases Total Fiscal 2021 $ 112,249 $ 1,279 $ 113,528 Fiscal 2022 113,556 1,226 114,782 Fiscal 2023 113,351 1,124 114,475 Fiscal 2024 112,763 1,058 113,821 Fiscal 2025 111,191 827 112,018 Thereafter 818,237 1,862 820,099 Total lease payments 1,381,347 7,376 $ 1,388,723 Less: Imputed interest (457,288) (1,322) Present value of lease liabilities $ 924,059 $ 6,054 |
Schedule of supplemental cash flow information | The weighted-average lease terms and discount rates of operating and finance leases were as follows: January 2, December 28, Weighted-average remaining lease term: Operating leases 12.0 years 12.3 years Finance leases 6.7 years 7.6 years Weighted-average discount rate: Operating leases 6.91 % 7.41 % Finance leases 6.08 % 6.35 % Supplemental cash flow information related to leases was as follows (amounts in thousands): Fiscal Year Ended January 2, December 28, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 101,245 $ 88,362 Leased assets obtained in exchange for new lease liabilities — adoption $ — $ 664,882 Leased assets obtained in exchange for new operating lease liabilities $ 166,018 $ 155,986 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill and intangible assets | Information regarding our goodwill and intangible assets as of January 2, 2021 was as follows (amounts in thousands): Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks $ 58,400 $ (24,218) $ 34,182 Computer software 24,868 (18,368) 6,500 Total finite-lived intangible assets 83,268 (42,586) 40,682 Liquor licenses 7,544 — 7,544 Total intangible assets 90,812 (42,586) 48,226 Goodwill 747,943 — 747,943 Total goodwill and intangible assets $ 838,755 $ (42,586) $ 796,169 Information regarding our goodwill and intangible assets as of December 28, 2019 was as follows (amounts in thousands): Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks $ 58,400 $ (20,324) $ 38,076 Customer lists 160 (160) — Computer software 20,418 (17,062) 3,356 Total finite-lived intangible assets 78,978 (37,546) 41,432 Liquor licenses 6,360 — 6,360 Total intangible assets 85,338 (37,546) 47,792 Goodwill 747,943 — 747,943 Total goodwill and intangible assets $ 833,281 $ (37,546) $ 795,735 |
Schedule of estimated future amortization expense | The estimated future amortization expense related to finite-lived intangible assets as of January 2, 2021 is as follows (amounts in thousands): Fiscal 2021 $ 6,976 Fiscal 2022 5,517 Fiscal 2023 4,735 Fiscal 2024 4,003 Fiscal 2025 4,002 Thereafter 15,449 Total $ 40,682 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following (amounts in thousands): January 2, December 28, First Lien Credit Agreement: Term loan $ 460,000 $ 460,188 Notes payable — 246 Long-term debt, gross 460,000 460,434 Less: Unamortized debt discounts and debt issuance costs (10,767) (12,445) Long-term debt, less unamortized debt discounts and debt issuance costs 449,233 447,989 Less: Current portion — (246) Long-term debt, net $ 449,233 $ 447,743 |
Principal maturities of debt | Principal maturities of debt as of January 2, 2021 are as follows (amounts in thousands): Fiscal 2021 $ — Fiscal 2022 — Fiscal 2023 — Fiscal 2024 — Fiscal 2025 460,000 Thereafter — Total $ 460,000 |
Schedule of interest expense, net | Interest expense, net, consisted of the following (amounts in thousands): Fiscal Year Ended January 2, December 28, December 29, Interest on loans $ 19,113 $ 45,259 $ 52,569 Amortization of debt issuance costs 2,289 2,367 4,024 Interest on finance leases 376 263 117 Other 32 51 2 Interest income (1,767) (2,013) (1,350) Interest expense, net $ 20,043 $ 45,927 $ 55,362 |
Schedule of debt extinguishment and modification costs | Debt extinguishment and modification costs consisted of the following (amounts in thousands): Fiscal Year Ended January 2, December 28, December 29, Write off of debt issuance costs $ 74 $ 4,110 $ 3,459 Debt modification costs 124 150 1,794 Write off of loan discounts — 1,374 — Debt extinguishment and modification costs $ 198 $ 5,634 $ 5,253 |
Share-based Awards (Tables)
Share-based Awards (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of respective valuation models resulted in weighted-average fair value for time-based and performance-based options and RSUs | The respective valuation methods resulted in weighted-average grant date fair values for time-based stock options, performance-based stock options, RSUs, and PSUs granted during fiscal 2020, 2019 and 2018 as follows: Fiscal Year Ended January 2, December 28, December 29, Time-based stock options N/A $ 7.61 $ 2.96 Performance-based stock options N/A $ 5.78 $ 4.65 RSUs $ 37.07 $ 27.13 $ 10.36 PSUs $ 36.90 N/A N/A |
Schedule of fair values of time-based options | The grant date fair value of time-based stock options awarded during fiscal 2019 and 2018 was estimated using the Black-Scholes valuation model with the following weighted-average assumptions: Fiscal Year Ended December 28, December 29, Exercise price $ 21.66 $ 11.98 Volatility 30.2 % 35.0 % Risk-free interest rate 1.9 % 2.6 % Dividend yield — % — % Expected term (in years) 6.83 2.80 |
Schedule of stock option activity | The following table summarizes stock option activity under all equity incentive plans during fiscal 2020, 2019 and 2018: Time-Based Options Performance-Based Options Number of Options Weighted-Average Number of Options Weighted-Average Options outstanding at December 30, 2017 5,528,836 $ 7.27 5,525,860 $ 6.11 Granted 334,535 11.98 334,536 11.98 Exercised (2,946) 8.47 — — Forfeitures (62,050) 8.10 (65,066) 6.81 Options outstanding at December 29, 2018 (1) 5,798,375 $ 7.53 5,795,330 $ 4.40 Granted 1,363,822 21.66 99,788 17.29 Exercised (817,051) 7.21 — — Forfeitures (101,479) 12.72 (117,997) 7.15 Options outstanding at December 28, 2019 6,243,667 $ 10.57 5,777,121 $ 4.57 Granted — — — — Exercised (2,326,219) 7.29 (3,438,470) 4.55 Forfeitures (52,676) 20.63 (13,071) 16.47 Options outstanding at January 2, 2021 3,864,772 $ 12.42 2,325,580 $ 4.54 Options vested and exercisable at January 2, 2021 2,309,467 $ 7.45 2,325,580 $ 4.54 _______________________ (1) The decrease in weighted-average exercise price for outstanding performance-based options at December 29, 2018 was due to a dividend declared on October 22, 2018 pursuant to which all performance-based options outstanding at that date received a $2.10 downward adjustment to the exercise price. |
Schedule of RSU and PSU activity | The following table summarizes RSU activity under all equity incentive plans during fiscal 2020, 2019 and 2018: Number of Shares Weighted-Average Unvested balance at December 30, 2017 100,804 $ 7.51 Granted 34,200 10.36 Vested (54,184) 7.39 Forfeitures — — Unvested balance at December 29, 2018 80,820 $ 8.80 Granted 195,135 27.13 Vested (76,841) 18.06 Forfeitures (8,242) 30.03 Unvested balance at December 28, 2019 190,872 $ 22.89 Granted 277,496 37.07 Vested (115,030) 19.74 Forfeitures (11,496) 31.78 Unvested balance at January 2, 2021 341,842 $ 35.16 The following table summarizes PSU activity under the 2019 Plan during fiscal 2020: Number of Shares Weighted-Average Unvested balance at December 28, 2019 — $ — Granted (1) 272,640 36.90 Adjustment for expected performance achievement (2) 135,821 36.90 Vested — — Forfeitures (999) 36.88 Unvested balance at January 2, 2021 407,462 $ 36.90 _______________________ (1) Represents initial grant of PSUs based on performance target level achievement of 100%. (2) Represents the adjustment to previously granted PSUs based on current performance expectations. An additional 135,820 PSUs could potentially be included if the maximum performance level is reached. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
Components of income tax expense | The components of income tax expense (benefit) consisted of the following (amounts in thousands): Fiscal Year Ended January 2, December 28, December 29, Current: Federal $ (285) $ 52 $ (200) State 284 439 353 Total current (1) 491 153 Deferred: Federal (14,682) 247 4,523 State (4,896) 625 1,308 Total deferred (19,578) 872 5,831 Income tax expense (benefit) $ (19,579) $ 1,363 $ 5,984 |
Schedule of effective income tax rate reconciliation | A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate is as follows: Fiscal Year Ended January 2, December 28, December 29, Taxes at federal statutory rates 21.0 % 21.0 % 21.0 % State income taxes net of federal benefit (4.2) % 5.2 % 6.0 % Excess federal tax benefits from exercise and vest of share-based awards (40.3) % (21.4) % — % Other 1.0 % 3.3 % 0.4 % Effective income tax rate (22.5) % 8.1 % 27.4 % |
Components of deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities were as follows (amounts in thousands): January 2, December 28, Deferred tax assets: Accrued compensation $ 6,362 $ 3,411 Share-based compensation expense 8,891 6,323 Inventory 4,594 4,216 Transaction costs 1,152 1,334 Lease liability obligation 258,093 221,747 Net operating loss and other carryforwards 58,596 24,936 Reserves and allowances 3,092 3,974 Interest expense carryforward — 1,103 Other 4,194 1,176 Total deferred tax assets 344,974 268,220 Deferred tax liabilities: Prepaid expenses (1,096) (1,042) Depreciation and amortization (64,814) (43,213) Intangible assets (7,802) (8,417) Right-of-use assets (234,022) (203,065) Goodwill (32,691) (27,230) Debt transaction costs (1,020) (1,273) Total deferred tax liabilities (341,445) (284,240) Net deferred tax assets (liabilities) $ 3,529 $ (16,020) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | A reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share attributable to common stockholders is as follows (dollars and shares in thousands, except per share amounts): Fiscal Year Ended January 2, December 28, December 29, Numerator Net income attributable to common stockholders $ 106,713 $ 15,419 $ 15,868 Denominator Weighted-average shares of common stock 91,818 79,044 68,473 Effect of dilutive RSUs 96 42 73 Effect of dilutive options 6,538 2,777 — Weighted-average shares of common stock - diluted (1) (2) (3) 98,452 81,863 68,546 Earnings per share attributable to common stockholders: Basic $ 1.16 $ 0.20 $ 0.24 Diluted $ 1.08 $ 0.19 $ 0.23 _______________________ (1) The diluted weighted-average shares outstanding for the fiscal years ended December 28, 2019 and December 29, 2018 did not include performance-based stock options because the requisite performance criteria of such stock options had not been achieved as of that date. On February 3, 2020, in conjunction with a secondary offering, certain performance criteria were achieved resulting in the vesting of 4.1 million performance-based stock options, and accordingly, these vested performance-based stock options are included in the diluted weighted-average shares outstanding for fiscal year 2020. On April 27, 2020 in conjunction with an additional secondary offering, certain performance criteria were achieved resulting in the vesting of the remaining 1.7 million unvested performance-based stock options, and accordingly, these vested performance-based stock options are included in the diluted weighted-average shares outstanding for fiscal year 2020. See NOTE 7—Share-based Awards, for additional information. (2) The diluted weighted-average shares for the fiscal year ended December 29, 2018 did not include time-based stock options because such options were subject to a post-termination repurchase right by us until the occurrence of a qualifying contingent event occurred (involuntary termination, change in control or initial public offering), and the occurrence of such an event was not deemed probable. Upon the completion of our IPO in June of fiscal 2019, a qualifying contingent event had occurred and therefore time-based stock options were included in the weighted-average diluted shares for the fiscal years ended January 2, 2021 and December 28, 2019. See NOTE 7—Share-based Awards, for additional information. (3) 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 fiscal year ended January 2, 2021. |
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): Fiscal Year Ended January 2, December 28, December 29, RSUs 3,239 50 — Time-based stock options — 682 — Total 3,239 732 — |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summarized quarterly financial information | Selected unaudited summarized quarterly financial information for fiscal 2020 and 2019 was as follows (amounts in thousands, except per share data): First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal 2020 Net sales $ 760,308 $ 803,429 $ 764,082 $ 806,821 Gross Profit 237,026 253,751 238,183 244,387 Income from operations 16,873 32,359 30,315 27,828 Net income 12,642 29,333 40,474 24,264 Basic earnings per share $ 0.14 $ 0.32 $ 0.44 $ 0.26 Diluted earnings per share $ 0.13 $ 0.30 $ 0.41 $ 0.24 Fiscal 2019 Net sales $ 606,271 $ 645,289 $ 652,540 $ 655,517 Gross Profit 187,017 198,720 201,087 200,278 Income from operations 21,656 5,735 23,948 17,004 Net income (loss) 3,774 (10,632) 12,445 9,832 Basic earnings per share $ 0.06 $ (0.15) $ 0.14 $ 0.11 Diluted earnings per share $ 0.06 $ (0.15) $ 0.13 $ 0.11 |
Schedule I_Condensed Financia_2
Schedule I—Condensed Financial Information of Registrant (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Balance Sheets | CONDENSED BALANCE SHEETS (PARENT COMPANY ONLY) (in thousands, except share and per share amounts) January 2, December 28, Assets Investment in wholly owned subsidiary $ 923,816 $ 746,628 Total assets $ 923,816 $ 746,628 Liabilities and Stockholders’ Equity Intercompany payable $ 1,509 $ 1,244 Total liabilities 1,509 1,244 Stockholders’ equity: Capital stock: Voting common stock, par value $0.001 per share, 500,000,000 shares authorized; 94,854,336 and 89,005,062 shares issued and outstanding, respectively 95 89 Series A Preferred stock, par value $0.001 per share, 50,000,000 shares authorized; no shares issued and outstanding — — Additional paid-in capital 787,047 717,282 Retained earnings 135,165 28,013 Total stockholders’ equity 922,307 745,384 Total liabilities and stockholders’ equity $ 923,816 $ 746,628 See Notes to Condensed Financial Statements (Parent Company Only) |
Condensed Statements of Operations | CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (PARENT COMPANY ONLY) (in thousands) Fiscal Year Ended January 2, December 28, December 29, Operating expenses $ 265 $ 273 $ 216 Operating loss (265) (273) (216) Loss before equity in net income of subsidiary (265) (273) (216) Equity in net income of subsidiary, net of tax 106,978 15,692 16,084 Net income and comprehensive income $ 106,713 $ 15,419 $ 15,868 See Notes to Condensed Financial Statements (Parent Company Only) |
Condensed Statements of Comprehensive Income | CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (PARENT COMPANY ONLY) (in thousands) Fiscal Year Ended January 2, December 28, December 29, Operating expenses $ 265 $ 273 $ 216 Operating loss (265) (273) (216) Loss before equity in net income of subsidiary (265) (273) (216) Equity in net income of subsidiary, net of tax 106,978 15,692 16,084 Net income and comprehensive income $ 106,713 $ 15,419 $ 15,868 See Notes to Condensed Financial Statements (Parent Company Only) |
Condensed Statement of Cash Flows | CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY ONLY) (in thousands) Fiscal Year Ended January 2, December 28, December 29, Cash flows from operating activities: Net income $ 106,713 $ 15,419 $ 15,868 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in net income of subsidiary (106,978) (15,692) (16,084) Dividend received from subsidiary (return on capital) — — 27,351 Changes in operating assets and liabilities: Other current assets — 497 (497) Net cash provided by (used in) operating activities (265) 224 26,638 Cash flows from investing activities: Investment in subsidiary (32,121) (402,050) — Dividend received from subsidiary (return of capital) — — 126,236 Net cash provided by (used in) investing activities (32,121) (402,050) 126,236 Cash flows from financing activities: Intercompany payables 265 (409) 718 Proceeds from initial public offering, net of underwriting discounts — 407,666 — Proceeds from exercise of share-based compensation awards 32,604 4,444 29 Payments related to net settlement of share-based compensation awards (483) (2,813) (34) Other direct costs paid related to the initial public offering — (7,062) — Dividend paid to shareholders — — (153,587) Net cash provided by (used in) financing activities 32,386 401,826 (152,874) Net increase (decrease) in cash and cash equivalents — — — Cash and cash equivalents at beginning of period — — — Cash and cash equivalents at end of period $ — $ — $ — See Notes to Condensed Financial Statements (Parent Company Only) |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Narrative (Details) | May 28, 2020shares | Apr. 27, 2020USD ($)shares | Feb. 03, 2020USD ($)shares | Oct. 23, 2019USD ($) | Jun. 24, 2019USD ($)$ / sharesshares | Jun. 06, 2019 | Oct. 31, 2019USD ($)shares | Jan. 02, 2021USD ($)store$ / sharesshares | Sep. 26, 2020USD ($) | Jun. 27, 2020USD ($) | Mar. 28, 2020USD ($) | Dec. 28, 2019USD ($)store$ / sharesshares | Sep. 28, 2019USD ($) | Sep. 28, 2019USD ($) | Jun. 29, 2019USD ($) | Mar. 30, 2019USD ($) | Jan. 02, 2021USD ($)store$ / sharesshares | Dec. 28, 2019USD ($)store$ / sharesshares | Dec. 29, 2018USD ($)store | Dec. 31, 2017USD ($) | Dec. 30, 2017USD ($) |
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Number of stores | store | 380 | 380 | |||||||||||||||||||
Proceeds from initial public offering, net of underwriting discounts paid | $ 0 | $ 407,666,000 | $ 0 | ||||||||||||||||||
Payments of stock issuance costs | $ 0 | $ 7,062,000 | 0 | ||||||||||||||||||
Common stock, shares authorized (in shares) | shares | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |||||||||||||||||
Preferred stock, shares authorized (in shares) | shares | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||||||||||||||||
Preferred stock, par (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||
Offering costs incurred | $ 1,100,000 | $ 1,000,000 | $ 1,100,000 | $ 1,000,000 | $ 1,100,000 | ||||||||||||||||
Proceeds from stock options exercised | $ 1,600,000 | $ 1,400,000 | |||||||||||||||||||
Exercised (in shares) | shares | 269,000 | 191,470 | |||||||||||||||||||
Stock split, conversion ratio | 1.403 | ||||||||||||||||||||
Number of reportable segments (in segments) | store | 1 | ||||||||||||||||||||
Number of operating segments (in segments) | store | 1 | ||||||||||||||||||||
Impairment charges | $ 0 | 500,000 | 600,000 | ||||||||||||||||||
Gift card, redemption period | 12 months | ||||||||||||||||||||
Deferred revenue liability | 3,200,000 | 2,000,000 | $ 3,200,000 | 2,000,000 | |||||||||||||||||
Advertising expense | 25,900,000 | 26,200,000 | $ 21,200,000 | ||||||||||||||||||
Deferred tax asset related to share-based compensation expense | $ 8,891,000 | $ 6,323,000 | 8,891,000 | $ 6,323,000 | |||||||||||||||||
Intrinsic value of stock options exercised | $ 165,800,000 | ||||||||||||||||||||
Variable interest entity, number of stores | store | 375 | 342 | 375 | 342 | 308 | ||||||||||||||||
Net sales | $ 806,821,000 | $ 764,082,000 | $ 803,429,000 | $ 760,308,000 | $ 655,517,000 | $ 652,540,000 | $ 645,289,000 | $ 606,271,000 | $ 3,134,640,000 | $ 2,559,617,000 | $ 2,287,660,000 | ||||||||||
Accrued expenses | 35,699,000 | 31,363,000 | 35,699,000 | 31,363,000 | |||||||||||||||||
Retained earnings | $ 922,307,000 | 745,384,000 | $ 922,307,000 | 745,384,000 | 299,951,000 | $ 427,133,000 | |||||||||||||||
Cumulative Effect, Period of Adoption, Adjustment | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Retained earnings | 439,000 | 439,000 | 168,000 | $ 133,000 | |||||||||||||||||
Trademarks | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Useful life of intangible assets | 15 years | ||||||||||||||||||||
Computer software | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Useful life of intangible assets | 3 years | ||||||||||||||||||||
Minimum | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Useful lives of property and equipment | 3 years | ||||||||||||||||||||
Remaining lease term | 1 year | 1 year | |||||||||||||||||||
Maximum | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Useful lives of property and equipment | 15 years | ||||||||||||||||||||
Remaining lease term | 19 years | 19 years | |||||||||||||||||||
Breakage from unredeemed gift cards | $ 200,000 | 100,000 | 100,000 | ||||||||||||||||||
Hellman and Friedman, LLC | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Transfer of common stock holdings to stockholder's equity holders (in shares) | shares | 9,600,000 | ||||||||||||||||||||
Second Lien Credit Agreement | Senior Notes | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Repayments of long-term debt | $ 150,000,000 | ||||||||||||||||||||
Debt instrument, periodic payment, interest | 3,600,000 | ||||||||||||||||||||
First Lien Credit Agreement | Senior Notes | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Repayments of long-term debt | $ 15,000,000 | 248,000,000 | |||||||||||||||||||
Debt instrument, periodic payment, interest | 3,800,000 | ||||||||||||||||||||
Preferred Stock | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Redemption of preferred stock | $ 1 | 0 | |||||||||||||||||||
Retained earnings | $ 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Retained Earnings | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Retained earnings | $ 135,165,000 | 28,013,000 | 135,165,000 | 28,013,000 | 12,426,000 | $ 23,776,000 | |||||||||||||||
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Retained earnings | $ 439,000 | 439,000 | 168,000 | $ 133,000 | |||||||||||||||||
IPO | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Issuance of common stock upon initial public offering, net of issuance costs (in shares) | shares | 19,765,625 | 451,470 | |||||||||||||||||||
Sale of stock (in usd per share) | $ / shares | $ 22 | ||||||||||||||||||||
Proceeds from initial public offering, net of underwriting discounts paid | $ 407,700,000 | $ 3,200,000 | |||||||||||||||||||
Underwriting discounts and commissions | $ (27,100,000) | ||||||||||||||||||||
Payments of stock issuance costs | $ 7,200,000 | ||||||||||||||||||||
Parent Company | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Proceeds from initial public offering, net of underwriting discounts paid | 0 | 407,666,000 | 0 | ||||||||||||||||||
Payments of stock issuance costs | $ 0 | $ 7,062,000 | 0 | ||||||||||||||||||
Preferred stock, shares authorized (in shares) | shares | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||||||||||||||||
Preferred stock, par (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||
Retained earnings | $ 922,307,000 | $ 745,384,000 | $ 922,307,000 | $ 745,384,000 | |||||||||||||||||
Parent Company | Globe Intermediate Corp. | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Ownership percentage | 100.00% | 100.00% | |||||||||||||||||||
Parent Company | GOBP Holdings, Inc. | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Ownership percentage | 100.00% | 100.00% | |||||||||||||||||||
Parent Company | GOBP Midco, Inc. | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Ownership percentage | 100.00% | 100.00% | |||||||||||||||||||
Parent Company | Grocery Outlet Inc. | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Ownership percentage | 100.00% | 100.00% | |||||||||||||||||||
Variable Interest Entity, Not Primary Beneficiary | |||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||
Variable interest entity, termination period | 75 days | ||||||||||||||||||||
Net sales | $ 3,100,000,000 | 2,500,000,000 | 2,200,000,000 | ||||||||||||||||||
Sales commissions and fees | 469,300,000 | 382,800,000 | $ 340,000,000 | ||||||||||||||||||
Accrued expenses | $ 6,000,000 | 6,100,000 | 6,000,000 | 6,100,000 | |||||||||||||||||
Maximum loss exposure | $ 41,000,000 | $ 37,700,000 | $ 41,000,000 | $ 37,700,000 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Disaggregated Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 02, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Sales | $ 806,821 | $ 764,082 | $ 803,429 | $ 760,308 | $ 655,517 | $ 652,540 | $ 645,289 | $ 606,271 | $ 3,134,640 | $ 2,559,617 | $ 2,287,660 |
Perishable | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales | 1,054,506 | 868,109 | 768,373 | ||||||||
Non-Perishable | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales | $ 2,080,134 | $ 1,691,508 | $ 1,519,287 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Fair Value (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Unamortized debt discounts | $ 1,200 | $ 1,500 |
Level 2 | Gross Carrying Amount | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Term loans (Level 2) | 458,757 | 458,682 |
Level 2 | Estimated Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Term loans (Level 2) | $ 460,000 | $ 466,515 |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies - Variable Interest Entities (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 02, 2021USD ($)store | Sep. 26, 2020USD ($) | Jun. 27, 2020USD ($) | Mar. 28, 2020USD ($) | Dec. 28, 2019USD ($)store | Sep. 28, 2019USD ($) | Jun. 29, 2019USD ($) | Mar. 30, 2019USD ($) | Jan. 02, 2021USD ($)store | Dec. 28, 2019USD ($)store | Dec. 29, 2018USD ($)store | |
Variable Interest Entity [Line Items] | |||||||||||
Variable interest entity, number of stores | store | 375 | 342 | 375 | 342 | 308 | ||||||
Sales | $ 806,821 | $ 764,082 | $ 803,429 | $ 760,308 | $ 655,517 | $ 652,540 | $ 645,289 | $ 606,271 | $ 3,134,640 | $ 2,559,617 | $ 2,287,660 |
Accrued expenses | $ 35,699 | $ 31,363 | $ 35,699 | $ 31,363 |
Organization and Summary of S_8
Organization and Summary of Significant Accounting Policies - Recently Adopted Accounting Standards (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 835,397 | $ 734,327 |
Lease liability | 930,113 | 806,001 |
Intangible assets | (40,682) | (41,432) |
Leased assets obtained in exchange for new operating lease liabilities | 166,018 | 155,986 |
Cumulative Effect, Period of Adoption, Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Leased assets obtained in exchange for new operating lease liabilities | $ 0 | $ 664,882 |
Independent Operator Notes an_3
Independent Operator Notes and Receivables - Narrative (Details) - USD ($) $ in Millions | Jan. 02, 2021 | Dec. 28, 2019 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Accrued interest receivable | $ 0.4 | $ 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 an_4
Independent Operator Notes and Receivables - Schedule of Amounts Due (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Independent operator notes | ||
Gross | $ 37,238 | $ 31,952 |
Allowance, Current Portion | (514) | (678) |
Allowance, Long-term Portion | (7,124) | (9,088) |
Net | 29,600 | 22,186 |
Current Portion | 2,160 | 1,855 |
Long-term Portion | 27,440 | 20,331 |
Independent operator receivables | ||
Gross | 3,754 | 5,753 |
Allowance, Current Portion | (471) | (605) |
Allowance, Long-term Portion | 0 | 0 |
Net | 3,283 | 5,148 |
Current Portion | 3,283 | 5,148 |
Long-term Portion | 0 | 0 |
Total | ||
Gross | 40,992 | 37,705 |
Allowance, Current Portion | (985) | (1,283) |
Allowance, Long-term Portion | (7,124) | (9,088) |
Net | 32,883 | 27,334 |
Current Portion | 5,443 | 7,003 |
Long-term Portion | $ 27,440 | $ 20,331 |
Independent Operator Notes an_5
Independent Operator Notes and Receivables - Allowance Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Accounts And Financing Receivable, Allowance For Credit Loss [Roll Forward] | |||
Balance at beginning of year | $ 10,371 | $ 9,067 | $ 9,031 |
Provision for independent operator notes and receivables | (473) | 2,741 | 1,029 |
Cumulative effect of accounting change | (439) | 0 | 0 |
Write-off of provision for independent operator notes and receivables | (1,350) | (1,437) | (993) |
Balance at end of year | $ 8,109 | $ 10,371 | $ 9,067 |
Independent Operator Notes an_6
Independent Operator Notes and Receivables - Credit Quality Indicators (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | $ 13,859 | |
2019 | 12,450 | |
2018 | 6,936 | |
2017 | 2,568 | |
2016 | 1,155 | |
Prior | 270 | |
Total | 37,238 | $ 31,952 |
TCAP | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 1,375 | |
2019 | 2,321 | |
2018 | 1,333 | |
2017 | 186 | |
2016 | 194 | |
Prior | 0 | |
Total | 5,409 | |
Non-TCAP | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 3,856 | |
2019 | 5,693 | |
2018 | 5,603 | |
2017 | 2,382 | |
2016 | 961 | |
Prior | 270 | |
Total | 18,765 | |
New store | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 8,628 | |
2019 | 4,436 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Total | $ 13,064 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, At Cost | $ 639,753 | $ 516,502 |
Accumulated Depreciation and Amortization | (206,101) | (159,888) |
Property and Equipment, Net | 433,652 | 356,614 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, At Cost | 275,586 | 225,496 |
Accumulated Depreciation and Amortization | (70,999) | (53,733) |
Property and Equipment, Net | 204,587 | 171,763 |
Fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, At Cost | 330,338 | 274,523 |
Accumulated Depreciation and Amortization | (134,820) | (105,886) |
Property and Equipment, Net | 195,518 | 168,637 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, At Cost | 376 | 383 |
Accumulated Depreciation and Amortization | (282) | (269) |
Property and Equipment, Net | 94 | 114 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, At Cost | 33,453 | 16,100 |
Accumulated Depreciation and Amortization | 0 | 0 |
Property and Equipment, Net | $ 33,453 | $ 16,100 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Impairment charges | $ 0 | $ 0.5 | $ 0.6 |
Property and Equipment - Deprec
Property and Equipment - Depreciation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation of property and equipment | $ 50,749 | $ 42,906 | $ 37,052 |
Cost of sales | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation of property and equipment | 1,299 | 1,210 | 1,265 |
Operating expenses | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation of property and equipment | $ 49,450 | $ 41,696 | $ 35,787 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 12 Months Ended | ||||||||
Dec. 29, 2018USD ($) | Jan. 02, 2021 | Jan. 02, 2021USD ($) | Jan. 02, 2021store | Jan. 02, 2021retailStoreLease | Jan. 02, 2021warehouse | Dec. 28, 2019USD ($) | Dec. 28, 2019store | Dec. 28, 2019warehouse | |
Lessee, Lease, Description [Line Items] | |||||||||
Number of leases | retailStoreLease | 1 | ||||||||
Number of stores | store | 380 | ||||||||
Operating lease right-of-use assets | $ 835,397 | $ 734,327 | |||||||
Operating lease liability | 924,059 | ||||||||
Leases not yet commenced, total undiscounted future lease payments | 200,400 | ||||||||
Operating lease, term of contract | 15 years | ||||||||
Operating sublease, payments due | 6,400 | ||||||||
Rent expense | $ 86,000 | ||||||||
Minimum | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Operating lease, renewal term | 5 years | ||||||||
Maximum | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Operating lease, renewal term | 15 years | ||||||||
Related Parties | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Number of stores | 15 | 1 | 15 | 1 | |||||
Operating lease right-of-use assets | 39,800 | 42,500 | |||||||
Operating lease liability | $ 44,300 | $ 46,700 | |||||||
Number of leases not yet commenced | retailStoreLease | 37 |
Leases - Balance Sheet Classifi
Leases - Balance Sheet Classification of Right-of-Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Assets, Lessee [Abstract] | ||
Operating lease right-of-use assets | $ 835,397 | $ 734,327 |
Finance lease other assets | 5,973 | 5,904 |
Total lease assets | 841,370 | 740,231 |
Lease, Liability, Current [Abstract] | ||
Operating lease, liability, current | 47,730 | 37,923 |
Finance lease, liability, current | 945 | 322 |
Lease, Liability, Noncurrent [Abstract] | ||
Operating lease, liability, noncurrent | 876,329 | 762,105 |
Finance lease, liability, noncurrent | 5,109 | 5,651 |
Total lease liabilities | $ 930,113 | $ 806,001 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssets | us-gaap:OtherAssets |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | go:leaseliabilitycurrent | go:leaseliabilitycurrent |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | go:leaseliabilitycurrent | go:leaseliabilitycurrent |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | go:leaseliabilitynoncurrent | go:leaseliabilitynoncurrent |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | go:leaseliabilitynoncurrent | go:leaseliabilitynoncurrent |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 112,096 | $ 99,237 |
Finance lease cost: | ||
Amortization of right-of-use assets | 964 | 817 |
Interest on finance leases | 376 | 263 |
Variable lease cost | 700 | 668 |
Sublease income | (972) | (1,248) |
Net lease cost | $ 113,164 | $ 99,737 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) $ in Thousands | Jan. 02, 2021USD ($) |
Operating Leases | |
2021 | $ 112,249 |
2022 | 113,556 |
2023 | 113,351 |
2024 | 112,763 |
2025 | 111,191 |
Thereafter | 818,237 |
Total lease payments | 1,381,347 |
Less: Imputed interest | (457,288) |
Present value of lease liabilities | 924,059 |
Finance Leases | |
2021 | 1,279 |
2022 | 1,226 |
2023 | 1,124 |
2024 | 1,058 |
2025 | 827 |
Thereafter | 1,862 |
Total lease payments | 7,376 |
Less: Imputed interest | (1,322) |
Present value of lease liabilities | 6,054 |
Total | |
2021 | 113,528 |
2022 | 114,782 |
2023 | 114,475 |
2024 | 113,821 |
2025 | 112,018 |
Thereafter | 820,099 |
Total lease payments | $ 1,388,723 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | go:leaseliability |
Finance Lease, Liability, Statement of Financial Position [Extensible List] | go:leaseliability |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Jan. 02, 2021 | Dec. 28, 2019 |
Weighted-average remaining lease term: | ||
Operating leases | 12 years | 12 years 3 months 18 days |
Finance leases | 6 years 8 months 12 days | 7 years 7 months 6 days |
Weighted-average discount rate: | ||
Operating leases | 6.91% | 7.41% |
Finance leases | 6.08% | 6.35% |
Leases - Cash Flow Information
Leases - Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Operating cash flows from operating leases | $ 101,245 | $ 88,362 |
Leased assets obtained in exchange for new operating lease liabilities | 166,018 | 155,986 |
Cumulative Effect, Period of Adoption, Adjustment | ||
Lessee, Lease, Description [Line Items] | ||
Leased assets obtained in exchange for new operating lease liabilities | $ 0 | $ 664,882 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Information Regarding Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 83,268 | $ 78,978 |
Accumulated Amortization | (42,586) | (37,546) |
Net Carrying Amount | 40,682 | 41,432 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | 90,812 | 85,338 |
Accumulated Amortization | (42,586) | (37,546) |
Net Carrying Amount | 48,226 | 47,792 |
Goodwill | 747,943 | 747,943 |
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Gross Carrying Amount | 838,755 | 833,281 |
Accumulated Amortization | (42,586) | (37,546) |
Net Carrying Amount | 796,169 | 795,735 |
Liquor licenses | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 7,544 | 6,360 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 58,400 | 58,400 |
Accumulated Amortization | (24,218) | (20,324) |
Net Carrying Amount | 34,182 | 38,076 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | (24,218) | (20,324) |
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Accumulated Amortization | (24,218) | (20,324) |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 160 | |
Accumulated Amortization | (160) | |
Net Carrying Amount | 0 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | (160) | |
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Accumulated Amortization | (160) | |
Computer software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 24,868 | 20,418 |
Accumulated Amortization | (18,368) | (17,062) |
Net Carrying Amount | 6,500 | 3,356 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | (18,368) | (17,062) |
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Accumulated Amortization | $ (18,368) | $ (17,062) |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of Intangible Assets | $ 6.5 | $ 6.7 | $ 10 |
Goodwill and intangible asset impairment | $ 0 | $ 0 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Estimated Future Amortization Expense Related to Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 6,976 | |
2022 | 5,517 | |
2023 | 4,735 | |
2024 | 4,003 | |
2025 | 4,002 | |
Thereafter | 15,449 | |
Net Carrying Amount | $ 40,682 | $ 41,432 |
Long-term Debt - Schedule of Lo
Long-term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 460,000 | $ 460,434 |
Less: Unamortized debt discounts and debt issuance costs | (10,767) | (12,445) |
Long-term debt, less unamortized debt discounts and debt issuance costs | 449,233 | 447,989 |
Less: Current portion | 0 | (246) |
Long-term debt, net | 449,233 | 447,743 |
Senior Notes | First Lien Credit Agreement | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 460,000 | 460,188 |
Notes payable | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 0 | $ 246 |
Long-term Debt - Narrative (Det
Long-term Debt - Narrative (Details) | Mar. 19, 2020USD ($) | Jan. 24, 2020USD ($) | Oct. 23, 2019USD ($) | Jul. 23, 2019USD ($) | Jun. 24, 2019USD ($) | Mar. 28, 2020USD ($) | Sep. 28, 2019USD ($) | Jan. 02, 2021USD ($) | Dec. 28, 2019USD ($) | Dec. 29, 2018USD ($) | Oct. 22, 2018USD ($) |
Debt Instrument [Line Items] | |||||||||||
Write off of debt issuance costs | $ 300,000 | $ 74,000 | $ 4,110,000 | $ 3,459,000 | |||||||
Debt modification costs | $ 200,000 | 124,000 | 150,000 | 1,794,000 | |||||||
Write off of loan discounts | 0 | 1,374,000 | $ 0 | ||||||||
First Lien Credit Agreement | Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 100,000,000 | ||||||||||
Outstanding debt | 0 | $ 0 | |||||||||
Proceeds from revolving credit facility | $ 90,000,000 | ||||||||||
Borrowing capacity available | $ 96,500,000 | ||||||||||
Secured leverage ratio | 7 | ||||||||||
Threshold to test ratio | $ 10,000,000 | ||||||||||
Threshold to test ratio, percentage of revolving credit facility commitments | 35.00% | ||||||||||
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 | ||||||||||
Letters of credit outstanding | $ 3,500,000 | ||||||||||
First Lien Credit Agreement | Bridge Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | 20,000,000 | ||||||||||
First Lien Credit Agreement | Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | 725,000,000 | ||||||||||
Repayments of long-term debt | $ 15,000,000 | $ 248,000,000 | |||||||||
Debt instrument, periodic payment, interest | 3,800,000 | ||||||||||
Term Loan Maturing October 22, 2025 | Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 475,200,000 | ||||||||||
Repayments of long-term debt | $ 15,000,000 | ||||||||||
Interest rate at period end | 2.90% | ||||||||||
Term Loan Maturing October 22, 2025 | Senior Notes | Minimum | Eurodollar | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.50% | ||||||||||
Term Loan Maturing October 22, 2025 | Senior Notes | Minimum | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.50% | ||||||||||
Term Loan Maturing October 22, 2025 | Senior Notes | Maximum | Eurodollar | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 3.25% | ||||||||||
Term Loan Maturing October 22, 2025 | Senior Notes | Maximum | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.25% | ||||||||||
Second Lien Credit Agreement | Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 150,000,000 | ||||||||||
Repayments of long-term debt | 150,000,000 | ||||||||||
Debt instrument, periodic payment, interest | 3,600,000 | ||||||||||
Write off of debt issuance costs | 3,800,000 | ||||||||||
Write off of loan discounts | $ 1,400,000 | ||||||||||
Second Replacement Term Loan | Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 460,000,000 | ||||||||||
Debt modification costs | $ 100,000 | ||||||||||
Second Replacement Term Loan | Senior Notes | Eurodollar | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.75% | ||||||||||
Second Replacement Term Loan | Senior Notes | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.75% |
Long-term Debt - Schedule of Pr
Long-term Debt - Schedule of Principal Maturities (Details) $ in Thousands | Jan. 02, 2021USD ($) |
Debt Disclosure [Abstract] | |
Fiscal 2021 | $ 0 |
Fiscal 2022 | 0 |
Fiscal 2023 | 0 |
Fiscal 2024 | 0 |
Fiscal 2025 | 460,000 |
Thereafter | 0 |
Total | $ 460,000 |
Long-term Debt - Interest Expen
Long-term Debt - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Debt Disclosure [Abstract] | |||
Interest on loans | $ 19,113 | $ 45,259 | $ 52,569 |
Amortization of debt issuance costs | 2,289 | 2,367 | 4,024 |
Interest on finance leases | 376 | 263 | |
Interest on finance leases | 117 | ||
Other | 32 | 51 | 2 |
Interest income | (1,767) | (2,013) | (1,350) |
Interest expense, net | $ 20,043 | $ 45,927 | $ 55,362 |
Long-term Debt - Debt Extinguis
Long-term Debt - Debt Extinguishment and Modification Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 28, 2019 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Debt Disclosure [Abstract] | ||||
Write off of debt issuance costs | $ 300 | $ 74 | $ 4,110 | $ 3,459 |
Debt modification costs | $ 200 | 124 | 150 | 1,794 |
Write off of loan discounts | 0 | 1,374 | 0 | |
Debt extinguishment and modification costs | $ 198 | $ 5,634 | $ 5,253 |
Share-based Awards - Narrative
Share-based Awards - Narrative (Details) - USD ($) $ in Thousands | Apr. 28, 2020 | Apr. 27, 2020 | Feb. 03, 2020 | Jun. 04, 2019 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Increase in shares available for issuance (in shares) | 460,078 | ||||||
Intrinsic value of stock options exercised | $ 165,800 | ||||||
Share-based compensation | 38,084 | $ 31,439 | $ 10,409 | ||||
Payments of dividends | 400 | 3,600 | |||||
June 23, 2016 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Payments of dividends | 8,700 | ||||||
RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years | ||||||
Share-based compensation | 4,900 | 2,100 | 400 | ||||
Unamortized compensation cost | $ 8,400 | ||||||
Unamortized compensation cost, weighted average period | 2 years 3 months 3 days | ||||||
PSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 3 years | ||||||
Share-based compensation | $ 3,700 | ||||||
Unamortized compensation cost | $ 11,400 | ||||||
Unamortized compensation cost, weighted average period | 2 years | ||||||
PSUs | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance target percentages | 0.00% | ||||||
PSUs | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance target percentages | 200.00% | ||||||
PSUs | Below Minimum Target Level | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance target percentages | 0.00% | ||||||
PSUs | Minimum Target Level | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance target percentages | 50.00% | ||||||
PSUs | Target Level | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance target percentages | 100.00% | ||||||
PSUs | Maximum Target Level | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance target percentages | 200.00% | ||||||
PSUs | Above Maximum Target Level | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance target percentages | 200.00% | ||||||
Time-based stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Intrinsic value of stock options exercised | $ 68,700 | 20,800 | $ 100 | ||||
Share-based compensation | 3,000 | $ 25,700 | |||||
Unamortized compensation cost | $ 6,700 | ||||||
Unamortized compensation cost, weighted average period | 2 years 6 months | ||||||
Time-based options granted prior to IPO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unamortized compensation cost | $ 5,900 | ||||||
Performance-based stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation | $ 7,600 | $ 18,500 | |||||
Number of shares vested (in shares) | 1,700,000 | 4,100,000 | |||||
Time Based Stock Options and Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unamortized compensation cost | $ 400 | ||||||
2019 Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares reserved for issuance (in shares) | 4,597,862 | ||||||
Percent of common stock outstanding | 4.00% | ||||||
Share of common stock reserved for issuance (in shares) | 5,057,940 | ||||||
Aggregate shares reserved for issuance (in shares) | 3,076,015 |
Share-based Awards - Weighted-A
Share-based Awards - Weighted-Average Fair Value for Time-Based and Performance-Based Options and RSUs Granted (Details) - $ / shares | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Time-based stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value (in usd per share) | $ 7.61 | $ 2.96 | |
Performance-based stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value (in usd per share) | 5.78 | 4.65 | |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value (in usd per share) | $ 37.07 | $ 27.13 | $ 10.36 |
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value (in usd per share) | $ 36.90 |
Share-based Awards - Assumption
Share-based Awards - Assumptions Used to Estimate Fair Values of Time-Based Options (Details) - Time-based stock options - $ / shares | 12 Months Ended | |
Dec. 28, 2019 | Dec. 29, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price (in usd per share) | $ 21.66 | $ 11.98 |
Volatility | 30.20% | 35.00% |
Risk-free interest rate | 1.90% | 2.60% |
Dividend yield | 0.00% | 0.00% |
Expected term (in years) | 6 years 9 months 29 days | 2 years 9 months 18 days |
Share-based Awards - Summary of
Share-based Awards - Summary of Stock Option Activity (Details) - $ / shares | Apr. 27, 2020 | Feb. 03, 2020 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | Oct. 22, 2018 |
Number of Options | ||||||
Exercised (in shares) | (269,000) | (191,470) | ||||
Time-Based Options | ||||||
Number of Options | ||||||
Options outstanding, beginning balance (in shares) | 6,243,667 | 5,798,375 | 5,528,836 | |||
Granted (in shares) | 0 | 1,363,822 | 334,535 | |||
Exercised (in shares) | (2,326,219) | (817,051) | (2,946) | |||
Forfeitures (in shares) | (52,676) | (101,479) | (62,050) | |||
Options outstanding, ending balance (in shares) | 3,864,772 | 6,243,667 | 5,798,375 | |||
Total vested and expected to vest (in shares) | 2,309,467 | |||||
Weighted-Average Exercise Price | ||||||
Weighted-average exercise price, beginning balance (in usd per share) | $ 10.57 | $ 7.53 | $ 7.27 | |||
Granted (in usd per share) | 0 | 21.66 | 11.98 | |||
Exercised (in usd per share) | 7.29 | 7.21 | 8.47 | |||
Forfeitures (in usd per share) | 20.63 | 12.72 | 8.10 | |||
Weighted-average exercise price, ending balance (in usd per share) | 12.42 | $ 10.57 | $ 7.53 | |||
Total vested and expected to vest, weighted average exercise price (in usd per share) | $ 7.45 | |||||
Performance-Based Options | ||||||
Number of Options | ||||||
Options outstanding, beginning balance (in shares) | 5,777,121 | 5,795,330 | 5,525,860 | |||
Granted (in shares) | 0 | 99,788 | 334,536 | |||
Exercised (in shares) | (3,438,470) | 0 | 0 | |||
Forfeitures (in shares) | (13,071) | (117,997) | (65,066) | |||
Options outstanding, ending balance (in shares) | 2,325,580 | 5,777,121 | 5,795,330 | |||
Total vested and expected to vest (in shares) | 2,325,580 | |||||
Weighted-Average Exercise Price | ||||||
Weighted-average exercise price, beginning balance (in usd per share) | $ 4.57 | $ 4.40 | $ 6.11 | |||
Granted (in usd per share) | 0 | 17.29 | 11.98 | |||
Exercised (in usd per share) | 4.55 | 0 | 0 | |||
Forfeitures (in usd per share) | 16.47 | 7.15 | 6.81 | |||
Weighted-average exercise price, ending balance (in usd per share) | 4.54 | $ 4.57 | $ 4.40 | |||
Total vested and expected to vest, weighted average exercise price (in usd per share) | $ 4.54 | |||||
Downward adjustment in weighted average price due to dividends declared (in usd per share) | $ 2.10 |
Share-based Awards - Summary _2
Share-based Awards - Summary of RSU and PSU Activity (Details) | 12 Months Ended | ||
Jan. 02, 2021$ / sharesshares | Dec. 28, 2019$ / sharesshares | Dec. 29, 2018$ / sharesshares | |
RSUs | |||
Number of Shares | |||
Unvested, beginning balance (in shares) | 190,872 | 80,820 | 100,804 |
Granted (in shares) | 277,496 | 195,135 | 34,200 |
Vested (in shares) | (115,030) | (76,841) | (54,184) |
Forfeitures (in shares) | (11,496) | (8,242) | 0 |
Unvested, ending balance (in shares) | 341,842 | 190,872 | 80,820 |
Weighted-Average Grant Date Fair Value | |||
Unvested, beginning balance (in usd per share) | $ / shares | $ 22.89 | $ 8.80 | $ 7.51 |
Granted (in usd per share) | $ / shares | 37.07 | 27.13 | 10.36 |
Vested (in usd per share) | $ / shares | 19.74 | 18.06 | 7.39 |
Forfeitures (in usd per share) | $ / shares | 31.78 | 30.03 | 0 |
Unvested, ending balance (in usd per share) | $ / shares | $ 35.16 | $ 22.89 | $ 8.80 |
PSUs | |||
Number of Shares | |||
Unvested, beginning balance (in shares) | 0 | ||
Granted (in shares) | 272,640 | ||
Adjustment for expected performance achievement | 135,821 | ||
Vested (in shares) | 0 | ||
Forfeitures (in shares) | (999) | ||
Unvested, ending balance (in shares) | 407,462 | 0 | |
Weighted-Average Grant Date Fair Value | |||
Unvested, beginning balance (in usd per share) | $ / shares | $ 0 | ||
Granted (in usd per share) | $ / shares | 36.90 | ||
Vested (in usd per share) | $ / shares | 0 | ||
Forfeitures (in usd per share) | $ / shares | 36.88 | ||
Unvested, ending balance (in usd per share) | $ / shares | $ 36.90 | $ 0 | |
Performance target level, percentage | 1 | ||
Share-Based Compensation Arrangement By Share-Based Payment Award, Equity Instruments Other Than Options, Adjustments, Weighted Average Grant Date Fair Value | $ / shares | $ 36.90 | ||
PSUs | Pro Forma | |||
Number of Shares | |||
Adjustment for expected performance achievement | 135,820 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Payments into plan | $ 600,000 | $ 400,000 | $ 400,000 |
Payments into the Benefits Fund | $ 1,400,000 | $ 1,200,000 | 1,100,000 |
Percentage of contribution (less than) | 5.00% | ||
Surcharges to the Fund | $ 0 | ||
Defined contribution plan, employer matching contribution, percent of match | 35.00% | ||
Defined contribution plan, maximum percentage of employee gross | 6.00% | ||
Deferred Profit Sharing | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Percentage of employer contribution, deferred compensation plan | 1500.00% | ||
Nonunion Employee Retirement and Profit-Sharing Plans | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Expenses for contribution plan | $ 6,100,000 | $ 4,400,000 | $ 3,600,000 |
Retirement Plan for Warehouse Employees | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Percentage of employer contribution, defined contribution plan | 15.00% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Components Of Income Tax Expense [Line Items] | ||||
Provisional tax benefit associated with the Tax Act | $ (5,400) | |||
Income before income taxes | $ 87,134 | $ 16,782 | $ 21,852 | |
Federal Income Tax | ||||
Components Of Income Tax Expense [Line Items] | ||||
Net operating loss carryforwards | 238,500 | |||
Net operating loss carryforwards, subject to expiration | 103,900 | |||
Net operating loss carryforwards, not subject to expiration | 134,600 | |||
State Income Tax | ||||
Components Of Income Tax Expense [Line Items] | ||||
Net operating loss carryforwards | $ 80,000 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Current: | |||
Federal | $ (285) | $ 52 | $ (200) |
State | 284 | 439 | 353 |
Total current | (1) | 491 | 153 |
Deferred: | |||
Federal | (14,682) | 247 | 4,523 |
State | (4,896) | 625 | 1,308 |
Total deferred | (19,578) | 872 | 5,831 |
Income tax expense (benefit) | $ (19,579) | $ 1,363 | $ 5,984 |
Income Taxes - Income Tax Rate
Income Taxes - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Income Tax Disclosure [Abstract] | |||
Taxes at federal statutory rates | 21.00% | 21.00% | 21.00% |
State income taxes net of federal benefit | (4.20%) | 5.20% | 6.00% |
Excess federal tax benefits from exercise and vest of share-based awards | (40.30%) | (21.40%) | 0.00% |
Other | 1.00% | 3.30% | 0.40% |
Effective income tax rate | (22.50%) | 8.10% | 27.40% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Deferred tax assets: | ||
Accrued compensation | $ 6,362 | $ 3,411 |
Share-based compensation expense | 8,891 | 6,323 |
Inventory | 4,594 | 4,216 |
Transaction costs | 1,152 | 1,334 |
Lease liability obligation | 258,093 | 221,747 |
Net operating loss and other carryforwards | 58,596 | 24,936 |
Reserves and allowances | 3,092 | 3,974 |
Interest expense carryforward | 0 | 1,103 |
Other | 4,194 | 1,176 |
Total deferred tax assets | 344,974 | 268,220 |
Deferred tax liabilities: | ||
Prepaid expenses | (1,096) | (1,042) |
Depreciation and amortization | (64,814) | (43,213) |
Intangible assets | (7,802) | (8,417) |
Right-of-use assets | (234,022) | (203,065) |
Goodwill | (32,691) | (27,230) |
Debt transaction costs | (1,020) | (1,273) |
Total deferred tax liabilities | (341,445) | (284,240) |
Net deferred tax assets (liabilities) | $ 3,529 | |
Net deferred tax assets (liabilities) | $ (16,020) |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021USD ($)store | Dec. 28, 2019USD ($)warehouse | Dec. 29, 2018USD ($) | |
Related Party Transaction [Line Items] | |||
Number of stores | store | 380 | ||
Aggregate annual lease payments | $ 101,245 | $ 88,362 | |
Operating lease cost | 112,096 | 99,237 | |
Accounts and financing receivable, before allowance for credit loss | 40,992 | 37,705 | |
Independent operator commissions | $ 200 | $ 700 | $ 300 |
Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Number of stores | 15 | 1 | |
Aggregate annual lease payments | $ 6,000 | $ 6,100 | $ 6,600 |
Operating lease cost | $ 100 |
Earnings Per Share - Earnings P
Earnings Per Share - Earnings Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Apr. 27, 2020 | Feb. 03, 2020 | Jan. 02, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 |
Numerator | |||||||||||||
Net income attributable to common stockholders | $ 24,264 | $ 40,474 | $ 29,333 | $ 12,642 | $ 9,832 | $ 12,445 | $ (10,632) | $ 3,774 | $ 106,713 | $ 15,419 | $ 15,868 | ||
Denominator | |||||||||||||
Weighted-average shares of common stock - basic (in shares) | 91,818 | 79,044 | 68,473 | ||||||||||
Effect of dilutive RSUs (in shares) | 96 | 42 | 73 | ||||||||||
Effect of dilutive options (in shares) | 6,538 | 2,777 | 0 | ||||||||||
Weighted average shares of common stock - diluted (in shares) | 98,452 | 81,863 | 68,546 | ||||||||||
Earnings per share attributable to common stockholders: | |||||||||||||
Basic (in usd per share) | $ 0.26 | $ 0.44 | $ 0.32 | $ 0.14 | $ 0.11 | $ 0.14 | $ (0.15) | $ 0.06 | $ 1.16 | $ 0.20 | $ 0.24 | ||
Diluted (in usd per share) | $ 0.24 | $ 0.41 | $ 0.30 | $ 0.13 | $ 0.11 | $ 0.13 | $ (0.15) | $ 0.06 | $ 1.08 | $ 0.19 | $ 0.23 | ||
Performance-based stock options | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Number of shares vested (in shares) | 1,700 | 4,100 |
Earnings Per Share - Anti-dilut
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 | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,239 | 732 | 0 |
RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,239 | 50 | 0 |
Time-based stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 682 | 0 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 02, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 806,821 | $ 764,082 | $ 803,429 | $ 760,308 | $ 655,517 | $ 652,540 | $ 645,289 | $ 606,271 | $ 3,134,640 | $ 2,559,617 | $ 2,287,660 |
Gross Profit | 244,387 | 238,183 | 253,751 | 237,026 | 200,278 | 201,087 | 198,720 | 187,017 | 973,347 | 787,102 | 695,397 |
Income from operations | 27,828 | 30,315 | 32,359 | 16,873 | 17,004 | 23,948 | 5,735 | 21,656 | 107,375 | 68,343 | 82,467 |
Net income (loss) | $ 24,264 | $ 40,474 | $ 29,333 | $ 12,642 | $ 9,832 | $ 12,445 | $ (10,632) | $ 3,774 | $ 106,713 | $ 15,419 | $ 15,868 |
Basic earnings per share (in usd per share) | $ 0.26 | $ 0.44 | $ 0.32 | $ 0.14 | $ 0.11 | $ 0.14 | $ (0.15) | $ 0.06 | $ 1.16 | $ 0.20 | $ 0.24 |
Diluted earnings per share (in usd per share) | $ 0.24 | $ 0.41 | $ 0.30 | $ 0.13 | $ 0.11 | $ 0.13 | $ (0.15) | $ 0.06 | $ 1.08 | $ 0.19 | $ 0.23 |
Schedule I_Condensed Financia_3
Schedule I—Condensed Financial Information of Registrant - Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 |
Condensed Financial Statements, Captions [Line Items] | ||||
Total assets | $ 2,485,624 | $ 2,185,529 | ||
Total liabilities | 1,563,317 | 1,440,145 | ||
Common stock - par value $0.001, voting and nonvoting common stock | 95 | 89 | ||
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 | 787,047 | 717,282 | ||
Retained earnings | 135,165 | 28,013 | ||
Total stockholders’ equity | 922,307 | 745,384 | $ 299,951 | $ 427,133 |
Total liabilities and stockholders’ equity | $ 2,485,624 | $ 2,185,529 | ||
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) | 94,854,336 | 89,005,062 | ||
Common stock, outstanding (in shares) | 94,854,336 | 89,005,062 | ||
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 | ||
Parent Company | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Investment in wholly owned subsidiary | $ 923,816 | $ 746,628 | ||
Total assets | 923,816 | 746,628 | ||
Intercompany payable | 1,509 | 1,244 | ||
Total liabilities | 1,509 | 1,244 | ||
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 | 787,047 | 717,282 | ||
Retained earnings | 135,165 | 28,013 | ||
Total stockholders’ equity | 922,307 | 745,384 | ||
Total liabilities and stockholders’ equity | $ 923,816 | $ 746,628 | ||
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 | ||
Parent Company | Common Stock | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Common stock - par value $0.001, voting and nonvoting common stock | $ 95 | $ 89 | ||
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) | 94,854,336 | 89,005,062 | ||
Common stock, outstanding (in shares) | 94,854,336 | 89,005,062 |
Schedule I_Condensed Financia_4
Schedule I—Condensed Financial Information of Registrant - Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 02, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Operating expenses | $ 865,972 | $ 718,759 | $ 612,930 | ||||||||
Income from operations | $ 27,828 | $ 30,315 | $ 32,359 | $ 16,873 | $ 17,004 | $ 23,948 | $ 5,735 | $ 21,656 | 107,375 | 68,343 | 82,467 |
Income before income taxes | 87,134 | 16,782 | 21,852 | ||||||||
Net income and comprehensive income | $ 24,264 | $ 40,474 | $ 29,333 | $ 12,642 | $ 9,832 | $ 12,445 | $ (10,632) | $ 3,774 | 106,713 | 15,419 | 15,868 |
Comprehensive income (loss) | 106,713 | 15,419 | 15,868 | ||||||||
Parent Company | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Operating expenses | 265 | 273 | 216 | ||||||||
Income from operations | (265) | (273) | (216) | ||||||||
Income before income taxes | (265) | (273) | (216) | ||||||||
Equity in net income of subsidiary, net of tax | 106,978 | 15,692 | 16,084 | ||||||||
Net income and comprehensive income | 106,713 | 15,419 | 15,868 | ||||||||
Comprehensive income (loss) | $ 106,713 | $ 15,419 | $ 15,868 |
Schedule I_Condensed Financia_5
Schedule I—Condensed Financial Information of Registrant - Cash Flow (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 02, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Dec. 28, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ 24,264 | $ 40,474 | $ 29,333 | $ 12,642 | $ 9,832 | $ 12,445 | $ (10,632) | $ 3,774 | $ 106,713 | $ 15,419 | $ 15,868 |
Changes in operating assets and liabilities: | |||||||||||
Net cash provided by operating activities | 181,237 | 132,835 | 105,811 | ||||||||
Cash flows from investing activities: | |||||||||||
Net cash provided by (used in) investing activities | (133,786) | (108,019) | (73,550) | ||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from initial public offering, net of underwriting discounts paid | 0 | 407,666 | 0 | ||||||||
Proceeds from exercise of share-based compensation awards | 32,604 | 4,444 | 29 | ||||||||
Payments made for net settlement of employee share-based awards | (483) | (2,813) | (34) | ||||||||
Other direct costs paid related to the initial public offering | 0 | (7,062) | 0 | ||||||||
Dividend paid to shareholders | (434) | (3,645) | (153,587) | ||||||||
Net cash provided by (used in) financing activities | 29,774 | (17,778) | (16,999) | ||||||||
Net increase in cash and cash equivalents | 77,225 | 7,038 | 15,262 | ||||||||
Cash and cash equivalents - Beginning of the period | 28,101 | 21,063 | 28,101 | 21,063 | 5,801 | ||||||
Cash and cash equivalents at end of period | 105,326 | 28,101 | 105,326 | 28,101 | 21,063 | ||||||
Parent Company | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | 106,713 | 15,419 | 15,868 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Equity in net income of subsidiary | (106,978) | (15,692) | (16,084) | ||||||||
Dividend received from subsidiary (return on capital) | 0 | 0 | 27,351 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Other current assets | 0 | 497 | (497) | ||||||||
Net cash provided by operating activities | (265) | 224 | 26,638 | ||||||||
Cash flows from investing activities: | |||||||||||
Investment in subsidiary | (32,121) | (402,050) | 0 | ||||||||
Dividend received from subsidiary (return of capital) | 0 | 0 | 126,236 | ||||||||
Net cash provided by (used in) investing activities | (32,121) | (402,050) | 126,236 | ||||||||
Cash flows from financing activities: | |||||||||||
Intercompany payables | 265 | (409) | 718 | ||||||||
Proceeds from initial public offering, net of underwriting discounts paid | 0 | 407,666 | 0 | ||||||||
Proceeds from exercise of share-based compensation awards | 32,604 | 4,444 | 29 | ||||||||
Payments made for net settlement of employee share-based awards | (483) | (2,813) | (34) | ||||||||
Other direct costs paid related to the initial public offering | 0 | (7,062) | 0 | ||||||||
Dividend paid to shareholders | 0 | 0 | (153,587) | ||||||||
Net cash provided by (used in) financing activities | 32,386 | 401,826 | (152,874) | ||||||||
Net increase in cash and cash equivalents | 0 | 0 | 0 | ||||||||
Cash and cash equivalents - Beginning of the period | $ 0 | $ 0 | 0 | 0 | 0 | ||||||
Cash and cash equivalents at end of period | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Schedule I_Condensed Financia_6
Schedule I—Condensed Financial Information of Registrant - Additional Information (Details) $ / shares in Units, $ in Thousands | Apr. 27, 2020USD ($)shares | Feb. 03, 2020USD ($)shares | Jun. 24, 2019USD ($)$ / sharesshares | Jun. 06, 2019 | Oct. 31, 2019USD ($)shares | Sep. 28, 2019USD ($) | Jan. 02, 2021USD ($)shares | Dec. 28, 2019USD ($)shares | Dec. 29, 2018USD ($)shares |
Condensed Financial Statements, Captions [Line Items] | |||||||||
Stock split, conversion ratio | 1.403 | ||||||||
Proceeds from initial public offering, net of underwriting discounts paid | $ 0 | $ 407,666 | $ 0 | ||||||
Payments of stock issuance costs | 0 | 7,062 | 0 | ||||||
Offering costs incurred | $ 1,100 | 1,000 | 1,100 | ||||||
Proceeds from stock options exercised | $ 1,600 | $ 1,400 | |||||||
Exercised (in shares) | shares | 269,000 | 191,470 | |||||||
Share-based payment arrangement, expense | $ 38,084 | $ 31,439 | $ 10,409 | ||||||
Performance-based stock options | |||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||
Exercised (in shares) | shares | 3,438,470 | 0 | 0 | ||||||
Number of shares vested (in shares) | shares | 1,700,000 | 4,100,000 | |||||||
Share-based payment arrangement, expense | $ 7,600 | $ 18,500 | |||||||
IPO | |||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||
Issuance of shares (in shares) | shares | 19,765,625 | 451,470 | |||||||
Sale of stock (in usd per share) | $ / shares | $ 22 | ||||||||
Proceeds from initial public offering, net of underwriting discounts paid | $ 407,700 | $ 3,200 | |||||||
Underwriting discounts and commissions | $ 27,100 | ||||||||
Payments of stock issuance costs | $ 7,200 | ||||||||
Parent Company | |||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||
Dividends paid to registrant | $ 153,600 | ||||||||
Dividend received from subsidiary (return on capital) | $ 0 | 0 | $ 27,351 | ||||||
Dividend received from subsidiary (return of capital) | 0 | 0 | 126,236 | ||||||
Proceeds from initial public offering, net of underwriting discounts paid | 0 | 407,666 | 0 | ||||||
Payments of stock issuance costs | $ 0 | 7,062 | $ 0 | ||||||
Parent Company | Globe Intermediate Corp. | |||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||
Ownership percentage | 100.00% | ||||||||
Dividends paid to registrant | $ 153,600 | ||||||||
Parent Company | GOBP Holdings, Inc. | |||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||
Ownership percentage | 100.00% | ||||||||
Parent Company | GOBP Midco, Inc. | |||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||
Ownership percentage | 100.00% | ||||||||
Parent Company | Grocery Outlet Inc. | |||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||
Ownership percentage | 100.00% |