Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Grocery Outlet Holding Operating Margin % Related Terms
Grocery Outlet Holding Operating Margin % Historical Data
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The historical data trend for Grocery Outlet Holding's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
GO vs YSWY, VLGEA, NGVC: Operating Margin % Comparison
For the Grocery Stores subindustry, Grocery Outlet Holding's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Grocery Outlet Holding Operating Margin % vs Retail - Defensive Industry
For the Retail - Defensive industry and Consumer Defensive sector, Grocery Outlet Holding's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Grocery Outlet Holding's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Grocery Outlet Holding's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Grocery Outlet Holding (GO) has a Operating Margin % of -0.16% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Grocery Outlet Holding and its competitors. Over the past decade, Grocery Outlet Holding's Operating Margin % has ranged from 1.56 to 3.71. According to the industry distribution chart, Grocery Outlet Holding ranks #214 out of 310 companies in the Retail - Defensive industry, placing it in the top 69%.
Is Grocery Outlet Holding's Operating Margin % too high?
Grocery Outlet Holding's current Operating Margin % is -0.16%. Over the past 10 years, this metric has ranged from a low of 1.56 to a high of 3.71. Based on the distribution chart, Grocery Outlet Holding ranks #214 out of 310 companies in the Retail - Defensive industry, which is below the industry midpoint. Overall, Grocery Outlet Holding has a GF Score™ of 63/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Grocery Outlet Holding's Operating Margin % compare to YSWY and VLGEA?
According to the Retail - Defensive industry distribution chart, Grocery Outlet Holding ranks #214 out of 310 companies for Operating Margin %. This places Grocery Outlet Holding in the lower half of its industry. The industry median Operating Margin % is 3.28. Historically, Grocery Outlet Holding's own Operating Margin % has ranged from 1.56 to 3.71 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Retail - Defensive company?
The median Operating Margin % among Retail - Defensive companies is 3.28, based on 310 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Grocery Outlet Holding and its competitors. For the Retail - Defensive industry, the median Operating Margin % is 3.28 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Grocery Outlet Holding's current Operating Margin % is -0.16%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Grocery Outlet Holding stock overvalued right now?
Based on GuruFocus' analysis, Grocery Outlet Holding (GO) is currently considered Possible Value Trap. The stock's GF Value™ is $19.41, compared to a current price of $9.79 — trading 49.6% below its estimated fair value. The current Operating Margin % is -0.16%. Grocery Outlet Holding's overall GF Score™ is 63/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Grocery Outlet Holding (GO), the current Operating Margin % is -0.16% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Grocery Outlet Holding (GO) Overvalued in 2026?
Based on GuruFocus' analysis, Grocery Outlet Holding stock appears to be undervalued.
The current stock price of $9.79 is trading 49.6% below its estimated GF Value™ of $19.41.
GuruFocus considers Grocery Outlet Holding to be Possible Value Trap.
Key valuation signals for GO:
Operating Margin %: -0.16%
GF Value™: $19.41 vs. price of $9.79 (49.6% below fair value)
No single metric tells the full story. See the GO stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Grocery Outlet Holding Corp is a grocery store operator in the United States. It is a retailer of quality, name-brand consumables and fresh products sold through a network of independently operated stores. The stores are run by Entrepreneurial independent operators which create a neighborhood feel through personalized customer service and a localized product offering.
63GF Score
Get the complete analysis for GO
Operating Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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