The company reported its second quarter results yesterday (5 August), showing a net income of $29.8 million, compared to a loss of $130 million in Q2 2020.
Total sales for the second quarter were $535.7 million, an increase of 110.4% and comparable sales increased 118.3% compared to the same period in 2020, and 19.1% versus Q2 2019, driven by strength in core categories.
Brad Weston, ceo, commented: “We are very pleased with our strong second quarter results that exceeded our expectations. We saw sequential acceleration of the business as the economy opened up and restrictions subsided, driving increased consumer ability to celebrate. The quarter was highlighted by robust trends at retail with the recovery at wholesale underway, as expected.
“The strength in performance was broad based, particularly across our core everyday business, along with improved results in our seasonal categories. The consistent strength that we have demonstrated in our core everyday performance is a testament to the disciplines execution of our strategic initiatives and meaningful progress against our transformation strategy, with the resulting relevancy strides positioning us to capitalise on the near and long-term growth opportunities.”
The total number of stores was 749, just eight less than the previous year. Total gross profit margin for the period increased 3,390 basis points to 40.5% of net sales, primarily due to fixed cost deleverage in 2020 caused by COVID shutdowns, but also in part to fewer promotions and favourable product mix.
For the third quarter, the company is providing an outlook of total revenue of $490 to $515 million; Brand comparable sales percentage increase of high single digits compared to third quarter 2020, or mid-teens compared to third quarter 2019; GAAP net loss of $5 million to net income of $4 million, with an assumed Q3 tax rate of 27%.
Party City is offering the updated annual 2021 outlook of FY2021 interest expense of approximately $80 to $90 million, with capital expenditures of approximately $80 to $90 million.
Brad continued: “As we look to the back half of the year, the environment remains dynamic but we are well positioned for continued growth. We are excited about our refined marketing, improved store experience and elevated omni channel capabilities, as we continue to deliver on our mission of inspiring joy and making it easy to create unforgettable memories.”
