Overall Party City sales up 7.2 percent during first quarter of 2018
Party City Holdco Inc. (NYSE:PRTY) announced May 9 financial results for the first quarter ended March 31, 2018.
James M. Harrison, Chief Executive Officer, stated, “I am pleased with the start of 2018 as both top and bottom line objectives were met, along with accelerated EPS growth. Reported revenue grew 6.5 percent, driven by a balance of strong brand comparable sales at retail, along with double-digit growth in our international business. The strength of our vertical model fueled gross margin expansion, while good progress was achieved against many key growth strategies. Furthermore, the retail division continued to realize the benefits from the productivity initiatives identified in 2017. As a result of the aforementioned factors, we achieved adjusted net income growth of nearly 14 percent and adjusted EBITDA growth of over 12 percent. We anticipate building on this progress throughout the year and are reiterating our full year 2018 guidance.”
First Quarter Summary:
- Total revenues increased 6.5% on a reported basis to $507.8 million and 5.1% on a constant currency basis.
- Retail sales increased 7.2% on a reported basis (6.7% on a constant currency basis), driven primarily by square footage growth from store acquisitions and a solid brand comparable sales increase.
- Brand comparable sales increased 2.4% during the first quarter, in part as a result of the beneficial timing shifts of both New Year’s Eve and Easter, partially offset by the negative effects of holiday compression.
- Net third-party wholesale revenues increased 4.3% on an adjusted basis when adjusting for the impacts of currency and franchise store acquisitions.
- Total gross profit margin increased 20 basis points to 37.2% of net sales, primarily due to higher share of shelf1, leverage from the increased sales and savings associated with in-store productivity initiatives, partially offset by increased distribution costs, higher wages and non-cash purchase accounting adjustments.
- Operating expenses totaled $168.6 million or 33.2% of revenues, representing a decrease of 110 basis points from Q1 2017, largely due to leverage and savings associated with retail productivity initiatives and the benefit from last year’s restructuring.
- Reported net loss of $1.2 million compared to net loss of $4.7 million in the first quarter of 2017.
- Adjusted net income increased 13.7% to $6.9 million despite increased costs associated with higher interest rates and investments in Kazzam.
- Adjusted EBITDA increased 12.3% to $55.1 million.
- Diluted loss per share totaled ($0.01), compared to ($0.04) in the prior year quarter. Adjusted diluted income per share increased 40% to $0.07 from $0.05 in the first quarter of 2017.