The US retailer reported a decline in total net sales of 1.5% year-on-year.
Total net sales for the period were $527.4 million, while total retail sales also decreased by 4.6% year-on-year, primarily driven by lower sales of core product in everyday categories, as well as the current inflationary environment.
Total gross profit margin decreased 680 basis points to 33.7% of net sales, driven primarily by higher input costs from supply chain, raw materials, sourced merchandise, helium and labour.
Adjusted net income was $11.5 million, or $0.10 per diluted share, compared to $24.1 million or $0.29 per share in Q2 2021.
Brad Weston, ceo of Party City, commented: “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 two years, which is evidenced by our strong sales results compared to pre-pandemic levels.”
He added: “For the back half of the year, we continue to expect the supply chain volatility and inflationary pressures to persist and as a result, are revising our full year outlook. Given the continued broader macro pressures, we continue to operate the business with discipline from an expense and capital standpoint. Importantly, all of the progress we’ve made on our strategic initiatives is strengthening our market position, which will serve us well over the near and long-term.”
