Shares of retailer Party City fell sharply Wednesday after the company reported preliminary fourth quarter sales results that were lower than Wall Street expected. The Elmsford, New York-based company expects to report fourth quarter revenue between $645 million and $650 million, compared to FactSet's consensus estimate of $676.5 million. Party City shares were down 7.0% to $7.51 on Wednesday afternoon.
Shares of Party City (NYSE: PRTY) have crashed today, down by 13% as of 12:10 p.m. EST, after the company reported preliminary fourth-quarter results. Brand comparable sales are forecast to decline in the mid-single-digit range, which is worse than Party City's guidance of "flat to down a low single digit percentage." "We are pleased with the progress we continued to make in the fourth quarter against our strategic initiatives to reinforce our position of authority when it comes to celebrations," CEO Brad Weston said in a statement.
Party City Holdco Inc. shares slumped 12.6% in Wednesday premarket trading after the retailer said its fourth-quarter sales missed Street expectations. In a fourth-quarter business update issued after hours on Tuesday, Party City said preliminary revenue is $645 million to $650 million. The FactSet consensus is $676.5 million. Comparable sales are expected to fall in the mid-single digit range, while the FactSet consensus is for a 2.3% decline. "[T]he rapid surge in COVID-19 cases had a greater than expected impact on customer behavior in the months of November and December," said Brad Weston, chief executive of the company, in a statement. "This was evidenced by underperformance in regions like the Northeast, as well as in certain categories like tableware that are most impacted by the reduced size of social gatherings." Still, Weston said balloons were a strong category for the company. Party City "disposed of" $80 million in inventory that won't be replenished, part of an effort to streamline merchandise. And a previously announced sale of a "substantial portion" of its international operations is expected to close on Jan. 31. The deal is valued at $59 million. Party City stock has skyrocketed more than 205% over the last year while the S&P 500 index has gained 15.6% for the period.