Party City Holdco Inc. (PRTY) unexpectedly turned a profit for the third quarter, sending its shares up more than 30 percent in the mid-day trading Monday. The company also raised its financial outlook for the current quarter.
The manufacturer and seller of party goods reported earnings of $239.7 million, or $2.24 per share for the three-month period ended September 30, as compared to a loss of $281.5 million, or $3.02 per share in the same period last year. On an adjusted basis, the company earned 10 cents per share. Contrarily, analysts surveyed by FactSet were looking for a loss of 32 cents per share.
The company generated revenue of $533.8 million in the quarter, down 1.2 percent on year-over-year basis, though easily surpassed analysts’ average estimate of $489.3 million.
Party City Holdco said same-store sales jumped 8.3 percent, mainly driven by strong demand across its balloon, birthday, and entertainment segments. On the other hand, analysts on average predicted for a decline of 2.3 percent in same-store sales.
The company’s Chief Executive Officer Brad Weston said “we are very pleased with our better than expected third quarter performance, highlighted by the continued strength in our core business. Against a pandemic-impacted environment, we delivered $534 million in sales, including an 8.3% brand comparable sales increase, a stabilization in our Wholesale revenues and an almost threefold increase in Adjusted EBITDA over the prior year period.”
Looking forward, the company has forecasted adjusted profit in a range of 31 cents per share to 37 cents per share for the fourth quarter, well above analysts’ average estimate of 29 cent per share. Revenue is expected in a range of $675 million to $695 million, as compared to consensus forecast of $660 million.
Party City Holdco (NYSE: PRTY) stock is trading on heavy volume of nearly 16 million shares, as compared to average volume of 6 million shares. PRTY share price has jumped nearly 35 percent so far this year.
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