Party City's Q3 hit with hurricanes and Web performance issues
Party City reported third quarter profit in line with expectations even as its sales fell short due to Web problems and the impact of hurricanes.
Total revenues rose 0.6% to $560.1 million for the quarter ended Sept. 30. Its results included a $5 million hurricane-related headwind.
Retail sales increased 4.7%, driven primarily by increased store count through acquired franchise stores (36), one acquired independent store and new store growth (20 net new Party City stores) in the past 12 months. Same-store sales fell 1.2%.
Party City's comp performance was impacted by problems on its Web platform that negatively affected traffic levels on its site. The company said it is "aggressively addressing these issues.”
Net income totaled $10.1 million or $0.08 on a per share basis, compared to $10.2 million, or $0.08 per share in the prior year period. Adjusted earnings per share increased to $0.13 from $0.12 in the year-ago period.
“Our bottom-line performance in the third quarter once again demonstrated the inherent benefits of our unique vertical model," said CEO James M. Harrison. "Despite modest topline growth, and slightly softer than expected retail brand comps, in part driven by the hurricane disruptions, we delivered solid financial performance which was largely in-line with expectations, as we focused on the core fundamentals of gross margin expansion and disciplined cost control, resulting in adjusted EPS growth of over 8%.”
Based on its year-to-date performance, Party City is updating our full year guidance. It expects full-year earnings in the range of $1.21 to $1.25 per share, with revenue in the range of $2.36 billion to $2.39 billion.
"Looking ahead, we remain focused on executing our retail initiatives as well as elevating our e-commerce capabilities which, combined with the power of our vertical model, will drive sustainable top and bottom line improvement," Harrison said.
The company’s retail operations include over 900 specialty retail party supply stores (including approximately 150 franchise stores) throughout North America operating under the names Party City and Halloween City, and e-commerce websites, principally through the domain name PartyCity.com.
Total revenues rose 0.6% to $560.1 million for the quarter ended Sept. 30. Its results included a $5 million hurricane-related headwind.
Retail sales increased 4.7%, driven primarily by increased store count through acquired franchise stores (36), one acquired independent store and new store growth (20 net new Party City stores) in the past 12 months. Same-store sales fell 1.2%.
Party City's comp performance was impacted by problems on its Web platform that negatively affected traffic levels on its site. The company said it is "aggressively addressing these issues.”
Net income totaled $10.1 million or $0.08 on a per share basis, compared to $10.2 million, or $0.08 per share in the prior year period. Adjusted earnings per share increased to $0.13 from $0.12 in the year-ago period.
“Our bottom-line performance in the third quarter once again demonstrated the inherent benefits of our unique vertical model," said CEO James M. Harrison. "Despite modest topline growth, and slightly softer than expected retail brand comps, in part driven by the hurricane disruptions, we delivered solid financial performance which was largely in-line with expectations, as we focused on the core fundamentals of gross margin expansion and disciplined cost control, resulting in adjusted EPS growth of over 8%.”
Based on its year-to-date performance, Party City is updating our full year guidance. It expects full-year earnings in the range of $1.21 to $1.25 per share, with revenue in the range of $2.36 billion to $2.39 billion.
"Looking ahead, we remain focused on executing our retail initiatives as well as elevating our e-commerce capabilities which, combined with the power of our vertical model, will drive sustainable top and bottom line improvement," Harrison said.
The company’s retail operations include over 900 specialty retail party supply stores (including approximately 150 franchise stores) throughout North America operating under the names Party City and Halloween City, and e-commerce websites, principally through the domain name PartyCity.com.