- Party City ( NYSE: PRTY ) shows a marginal drop in Q2 revenue of 1.5% to $527.45M, misses consensus by $1.95; drop was primarily driven by lower retail sales partially offset by higher North American Wholesale sales.
- Total retail sales decreased 4.6% Y/Y driven by lower sales of core product in everyday categories and the lapping of strong prior year retail results as well as the current inflationary environment.
- Total number of corporate Party City stores was 756 as of June 30, 2022 compared to 749 in the prior year period.
- Adjusted EBITDA was $45.8M, a decrease of $40M
- Gross profit margin decreased 680 basis points to 33.7% of net sales.
- GAAP net income was $162.2M, or $1.42 EPS; Adjusted net income was $11.5, Non-GAAP EPS of $0.10 beats consensus by $0.04 .
- FY2022 Outlook: Net sales of $2.150B to $2.225B or a change of approximately -1% to 2% versus 2021 vs. consensus of $2.24B ; Brand comp sales decrease of approximately -4% to -1%; GAAP net loss of ~$36M to $10M; Adjusted EBITDA of ~$170M to $200M; 85 to 100 new Next Generation stores, with a combination of new openings and remodels; Capital Expenditures of ~$95M to $105M or $65M to $75M net of tenant improvement allowances.
- Brad Weston, CEO stated, “Our second quarter topline results were largely as expected as we lapped a strong Q2 last year while cost headwinds, which are predominantly transitory in nature, pressured profitability. We are seeing benefits from the transformation work we have accomplished over the last 2 years, which is evidenced by our strong sales results compared to pre-pandemic levels.”
- Company gets a Hold rating by SA authors with 3.00 score and a Quant rating of Strong sell with low factor grades on profitability, momentum, and revisions.
- SA warns that the stock may perform badly , owing to negative EPS revisions and decelerating momentum when compared to other consumer discretionary stocks.
- Contributor analysis on the stock: ' Party City: The Balloon Has Popped '
- Previously (Aug. 8): Party City Non-GAAP EPS of $0.10 beats by $0.04, revenue of $527.45M misses by $1.95M
For further details see:
Party City jumps 7% on mixed results, guides FY 2022