Segment Information

We are a retailer of quality, name-brand consumables and fresh products sold primarily through a network of independently operated stores. We manage our business on a consolidated basis and have one reportable segment. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. In addition, all of our sales were made to customers located in the U.S. and all property and equipment is located in the U.S.

The chief operating decision maker ("CODM"), who is our President and Chief Executive Officer, assesses performance for the segment and decides how to allocate resources based on net income and comprehensive income, which is reported on the consolidated statements of operations and comprehensive income. The CODM uses this measure in deciding where to reinvest profits and to monitor budget versus actual results. The measure of segment assets is reported on the consolidated balance sheets as total assets.

Information for the segment, including the significant expenses regularly reviewed by the CODM, is provided in the following tables for the periods indicated (amounts in thousands):


	Fiscal Year Ended
	December 28, 2024		December 30, 2023		December 31, 2022
Net sales	$	4,371,501	$	3,969,453	$	3,578,101
Less:
Cost of sales (1)	3,045,097		2,724,449		2,482,958

Commission expenses (2)	637,246		621,657		533,068
Other selling expenses (3)	266,261		200,847		196,263
General and administrative expenses (4)	209,960		177,645		160,015
Other segment items (5)	26,404		31,091		32,556
Depreciation and amortization expenses	108,206		87,982		78,251
Interest income	(8,156)		(9,746)		(3,389)
Interest expense	30,312		26,107		21,356
Loss on debt extinguishment and modification	—		5,340		1,274
Income tax expense	16,706		24,644		10,697
Net income and comprehensive income	$	39,465	$	79,437	$	65,052

_______________________

(1)Cost of sales includes merchandise costs, inventory markdowns, inventory losses, transportation costs and distribution and warehousing costs and excludes depreciation and amortization expenses of $4.5 million, $3.3 million and $3.0 million in fiscal 2024, fiscal 2023 and fiscal 2022, respectively.

(2)Commission expenses represent commissions paid to IOs.

(3)Other selling expenses include occupancy for all stores, our portion of maintenance costs for IO stores, the cost of opening new IO stores and payroll, benefits, maintenance, supplies and utilities for company-operated stores.

(4)General and administrative expenses include payroll and benefits for corporate and field support, marketing and advertising, insurance and professional services and operator recruiting and training costs.

(5)Other segment items represent share-based compensation expenses and impairment of long-lived assets related to the Restructuring Plan, as defined in NOTE 16—Restructuring Plan.


	Fiscal Year Ended
	December 28, 2024		December 30, 2023		December 31, 2022
Purchases of property and equipment	$	186,611	$	168,990	$	130,482
Investments in intangible assets and licenses	20,305		23,000		16,586
Total capital expenditures	$	206,916	$	191,990	$	147,068

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Grocery Outlet Holding Corp. Segments Disclosure

About Segments Disclosures

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