The retailer’s third quarter sales were down 1.6% on last year, but up 11.2% on 2019.
Total net sales for Party City in Q3 were $502.2 million, a decrease of 1.6% compared to Q3 2021, primarily driven by the strong sales performance from last year, as well as the continued impact of inflationary pressures on customer demand.
Retail sales for the period decreased 1% year on year, due largely to lower sales of core product in everyday categories and strong 2021 retail results.
The total number of stores increased by seven to 761 as of 30 September, 2022.
The total gross profit margin for the quarter decreased 440 basis points to 31.6% of net sales. This was mainly attributed to higher costs from supply chain, raw materials, sourced merchandise, helium and labour.
Party City reported an adjusted net loss of $157.2 million, or an adjusted net loss per diluted share of $1.39, compared to adjusted net income of $2.9 million, or adjusted net income per diluted share of $0.02 in the third quarter of 2021.
Brad Weston, ceo, commented: “We delivered third quarter results that were broadly in line with our expectations against a macro backdrop that has our core customer facing significant inflationary pressures.
“Despite the transitory cost headwinds that continue to pressure our bottom line, our transformation work is driving improved results versus the pre-pandemic period as we make progress against our product, inventory management, supply chain, and IT systems and infrastructure initiatives.
Brad also said that while Halloween sales were up year-on-year, they were at the lower end of expectations, due to the pressures facing consumers.
Looking forward, Brad said: “We anticipate the current macro backdrop to persist and are taking action to best position the business in this environment and for the longer term.”
