Grocery Outlet Holding Corp.

Greetings and welcome to the Grocery Outlet's Fiscal Third Quarter 2019 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your hosts, Joseph Pellant, Vice President Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone, and thank you for joining us on today's call to discuss Grocery Outlet's third quarter 2019 results. Participants on this call will make forward-looking statements which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such items, including our outlook for fiscal 2019 and future performance, should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. A description of these factors can be found in this afternoon's press release, as well as in our registration statement and quarterly reports on Form 10Q filings with the SEC, all of which can be found on our website at investors.groceryoutlet.com. We undertake no obligation to revise or update any forward-looking statements or information. During our call, we may reference certain non-GAAP financial information, including adjusted items. Reconciliations of GAAP to non-GAAP measures, as well as the description, limitations, and rationale for using each measure can be found in the supplemental financial tables included in this afternoon's press release and in our filings. We use non-GAAP measures as a lead in some of our financial discussions as we believe they more accurately represent the true operational performance and underlying results of our business. Presenting on today's call will be Grocery Outlet's Chief Executive Officer, Eric Lindberg, Vice Chairman, McGregor Reed, President, RJ Sheedy, and Chief Financial Officer, Charles Brocker. Following our prepared remarks, we will open the call for questions. With that, I'll turn it over to Eric.

Thank you, Joe. Good afternoon, everyone. Thank you for joining us today. McGregor, RJ, and I will share highlights from our third quarter as well as an update on our growth strategies. Charles will then review financial results and provide details on a revised outlook for fiscal 2019. We're extremely pleased to see continued momentum in our business through the third quarter with strong financial results across the board. Our outstanding performance over the last three quarters is a direct result of hard work Dedication from our entire staff and family of independent operators. I want to say thank you to all of them for their efforts. As reflected in our October 2nd press release announcing our preliminary results, we delivered top line growth of 13.1% in the third quarter, driven by new store openings and a 5.8% increase in comp store sales. Our strong top line performance was complemented by gross margin expansion and lower than projected expenses, allowing us to exceed our expectations for adjusted EBITDA, which increased 13.2% to $44.2 million. Notably, this increase was burdened by an estimated $1.8 million in public company costs, which we did not incur in the same period last year. Our objective remains to deliver consistent gross margin performance and reinvest in our business to support our long-term growth objectives. That said, based on our better-than-expected year-to-date performance, we are raising our full-year guidance, which Charles will discuss in more detail. Now I'd like to turn over to some highlights from the quarter. Beginning with our comp growth, the strength was once again broad-based across product categories, regions, and store vintages, as we continued to deliver across are three primary growth drivers. First and foremost, we are committed to providing our customers deep value and unique treasure hunt shopping experiences in the stores. We continue to strengthen our relationships with our current suppliers as well as seeking out and developing new relationships to procure brand name products at amazing values. The pipeline of opportunistic product remains very strong and we continue to generate excitement for our customers. Second, we remain committed to supporting the independent operators in delivering the WOW in-store shopping experience. One example of this commitment is a round of regional meetings that we held with our IOs in early October. Our leadership team visited nine cities in five days to share recent updates, provide opportunities for the IOs to share their best practices, and to respond to their questions. Key component of our success is derived from our efforts of our IOs. We want to always ensure that we are providing the right level of ongoing support and engagement. We were thrilled with the broad participation from 95% of our independent operators and the enthusiasm throughout these meetings as it reinforces that this is time well spent by both management team and our IOs. Third, we leveraged marketing to increase brand awareness and engagement. at both the corporate and the local level. Our Bargain Bliss marketing campaign continues to be very well received by customers. This corporate marketing is supported by local events and other advertising led by IOs within their individual communities. RJ will talk about some of these advances we made across these growth drivers. Moving to our store expansion strategy, we remain pleased with the performance of our new stores. During the quarter, we opened eight new sites, bringing the year-to-date total to 24 new locations. These new stores are a balance of existing mature markets and developing markets, and they continue to perform in line with our expectations. Mac will talk about our expansion strategy in more detail shortly. We remain focused on the execution of our differentiated business model. It's the combination of the opportunistic sourcing and the local independent operator that allows us to outlocal the chains and outchain the locals. We believe that this is the formula behind the consistency in our comp stores and our history of strong, stable financial performance. Looking forward, we remain excited about the opportunities ahead and we remain committed to delivering measured and consistent growth while operating our business for long-term success. To reiterate our long-term growth objectives, we expect to deliver consistent long-term comp store sales growth of 1-3% annually, primarily through the three drivers I mentioned earlier. We remain on track to grow our store base 10% annually with a healthy balance of openings across mature markets. We have a high level of brand recognition in developing markets where we are building brand awareness. To that end, we are extremely pleased to have filled our newly created leadership position for the Executive Vice President of our East Region as we look to develop our growth plans in the Mid-Atlantic market. Lastly, as I stated earlier, we will continue to strategically reinvest our productivity savings back into the business to support future growth. With that, I'll turn over the call to RJ, who will provide more details on our recent initiatives.