Trading On margin

Why Party City Holdco shares are trading lower today

  • Party City Holdco Inc. PRTY reported first-quarter FY22 sales growth of 1.4% year-over-year to $432.98 million, missing the consensus of $435.80 million.
  • The brand’s comparable sales increased by 2.1% compared to last year. Total retail sales increased by 2.3%.
  • Gross profit margin decreased by 380 basis points Y/Y to 31.9%. The operating loss for the quarter was ($20.1) million.
  • The Adjusted EPS loss of ($0.22) missed the consensus of ($0.12).
  • Adjusted EBITDA was $4.6 million compared to $32.4 million the previous year, mainly due to higher transportation, material and labor costs.
  • The total number of Party City company stores was 830 as of March 31, 2022, compared to 833 last year.
  • The company held $32.6 million in cash and cash equivalents as of March 31, 2022.
  • “As expected, our bottom line was impacted by elevated costs, including higher than expected freight and raw material cost pressures that intensified later in the quarter,” said CEO Brad Weston. . “As we look to the remainder of 2022, we expect supply chain and inflationary headwinds to continue, which is reflected in our updated outlook.”
  • Outlook: Party City forecasts FY22 sales of $2.225-2.30 billion (previous view: $2.275-2.35 billion), versus consensus of $2.3 billion.
  • He is waiting brand comp sales change of approximately -1% to 2% (previous view: 2.0% to 4.0%).
  • Adjusted EBITDA of $235m – $265m (previous view: $275m – $300m).
  • Price action: PRTY shares are trading down 22.2% to $2.38 pre-market when last checked on Monday.