Costumes and party supplies retailer Party City reported a Q3 profit of $10.1 million yesterday (Thursday 9 November), in line with expectations, but down on last year’s profit of $10.2 million.
The good news came despite the fact that the New York-based company saw sales falling due to a number of website problems and the impact of recent hurricanes.
Total revenues rose by 0.6% (to $560.1 million) for the quarter ending September 30, 2017. Overall retail sales rose by 4.7%, driven by the addition of 36 new franchise stores, 20 new Party City stores and one independent buy-out. With these acquisitions taken out of the equation, same-store sales fell by 1.2%.
Party City’s sales performance was affected by problems on its online platform that negatively affected traffic levels on its site. The company said it is; ‘aggressively addressing these issues’.
Based on its 2017 performance to-date, Party City is currently expecting its full-year earnings to fall in the range of $2.36 billion to $2.39 billion. Shares have decreased 31% since the beginning of the year, with stock falling by 36% in the last 12 months.
“Our bottom-line performance in the third quarter once again demonstrated the inherent benefits of our unique vertical model,” said ceo James Harrison, commenting on the results.
“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%.”
He continued; “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.”
The company’s retail operation includes over 900 party supply stores throughout North America and a number of e-commerce websites, operating principally through the domain name PartyCity.com.
