- Party City reported a “disappointing” third quarter on Thursday, in the words of CEO James Harrison. Revenue was down 2.3% year over year, to $540.2 million, and retail sales down 1.7%. Comp sales were down 2.6% in Q3, which ended Sept. 30.
- Worse, the party retailer reported in the same press release that its October sales — with the all-important Halloween holiday — fell 7% to $432.6 million, while retail sales fell 8%. Comps were down 4.9% for the month despite a 15.3% increase in e-commerce. Halloween City sales per store decreased 20.8% from the prior year.
- The company’s earnings announcement, which included reduced sales and profit estimates for the year, led to a sell off of Party City stock, with share prices down by as much as 67% since Wednesday. Sustained declines throughout the year in the company’s market cap — a measure of its total value on the stock market — led the company to post a $259.1 million write-off in goodwill during Q3.
Debtwire retail analyst Philip Emma described the market’s perception of Party City’s performance as “a disaster” in an emailed client note. Along with the precipitous drop-off in stock price, market prices for the company’s debt are also “down substantially,” Emma noted.