Party City has announced this week (10 May) its financial results for the quarter ended 31 March, 2021, with total sales increasing 3.1% versus the prior year, comparable sales increaseing 35.9% versus prior year and 0.4% versus Q1 of 2019. Its cash position from operations improved $25.2 million versus Q1 2020.
Brad Weston, chief executive officer of Party City, stated: “We delivered continued strong core category performance and better than expected results in seasonal categories in the first quarter, fuelling top and bottom line performance that exceeded expectations.
“Despite operating in a pandemic impacted environment with fewer in-person celebrations, brand comparable sales increased 0.4% versus 2019. While social gatherings were suppressed for a significant portion of the quarter, we were very encouraged by first quarter results and sales momentum which continued into April. Importantly, we made good progress advancing our strategic building blocks that are improving our relevancy as we continue to inspire joy by making it easy to create unforgettable memories.”
Brad added: “As we look to the second quarter, we are confident in our overall positioning heading into the summer and graduation season. We are focused on the right priorities to fortify our industry leadership and are poised to capitalise on the opportunities that lie ahead as life begins to return to normal and celebrations gradually resume.”
First Quarter Summary:
- Total revenues were $426.8 million, an increase of 3.1% on a reported basis and 2.7% on a constant currency basis, compared to the first quarter 2020. As the Company closed the previously disclosed sale of a substantial portion of its international operations at the end of January 2021, first quarter 2021 performance included one month of international results versus three months in the prior year period.
- Total retail sales increased 10.0% on a reported and constant currency basis driven by a 49.3% comparable sales increase in core categories versus the 13 weeks ended 4 April, 2020, partially offset by the divestiture of the international retail business and timing of New Year’s Eve.
- The total number of corporate Party City stores was 751 as of 31 March, 2021 compared to 757 in the prior year period.
- Brand comparable sales increased 35.9% in the first quarter versus the 13 weeks ended 4 April, 2020 and increased 0.4% compared to the 13 weeks ended 6 April, 2019.
- Net third-party Wholesale revenues decreased 15.8% on a reported basis or 16.8% in constant currency, driven predominately by the divestiture of a significant portion of our international operations.
- Total gross profit margin increased 735 basis points to 35.7% of net sales. Excluding certain items not indicative of core operating performance, gross profit margin improved 200 basis points to 36.0% of net sales mainly due to favorable product mix and fewer retail sales promotions, partially offset by increased costs for helium and delivery service.
- Operating expenses totaled $152.2 million or $576.5 million lower than the first quarter of 2020. Excluding certain items not indicative of core operating performance, operating expenses totaled $138.8 million, or 32.5% of net sales, a 320-basis point improvement versus prior-year period primarily driven by disciplined expense management and leverage on higher sales.
- Interest expense was $17.2 million during the first quarter of 2021, compared to $25.1 million during the first quarter of 2020 mainly due to lower amounts of debt outstanding.
- Reported GAAP net loss was $14.1 million, or a loss of $0.13 per diluted share.
- Adjusted net loss was $5.4 million, or a loss of $0.05 per diluted share, compared to adjusted net loss of $26.4 million, or a loss of $0.28 per share, in the first quarter of 2020.
- Adjusted EBITDA was $32.4 million, versus $11.9 million during the first quarter of 2020.
Balance Sheet and Cash Flow Highlights:
As of the end of the first quarter 2021, the company had $83.8 million in cash and approximately $129.3 million of availability under the facilities, for total liquidity of $213.1 million.
In addition, the principal balance of debt net of cash on 31 March 2021 was $1,303.0 million versus $1,760.4 million in the prior-year period. The principal balance of debt is used for the purpose of all leverage ratio calculations under our debt agreements.
