Party City confirms its outlook for the fourth quarter

ELMSFORD, NY, Jan. 10, 2022 (GLOBE NEWSWIRE) – Party City Holdco Inc. (NYSE: PRTY) today confirmed its outlook for total revenue, brand like-for-like sales and Adjusted EBITDA for the fourth quarter of fiscal year 2021.

Here are the Company’s expectations for the fourth quarter of fiscal 2021, which are in line with the forecast ranges previously provided:

  • Total revenue of $ 685 million to $ 700 million
  • Percentage of comparable sales of the high-teens brand increased compared to the fourth quarter of fiscal 2020
  • Adjusted EBITDA from $ 100 million to $ 110 million

Brad Weston, CEO of Party City, said: “We are pleased with our fourth quarter performance with preliminary results that have met our expectations. Despite persistent industry headwinds due to supply chain constraints and the impacts of COVID, during the quarter we capitalized on our inventory positioning and executed our strategies for the all-important holiday season. Notably, we have seen continued strength in our core categories, which reflects our mission of being customer obsessed and demonstrates our progress in making sure we are a priority when it comes to all that is festive. .

Mr. Weston continued, “As we move into 2022, we will continue to strengthen our position of authority by updating and improving our product assortments and inventory position as we expand our relevance with consumers. and improve their experience with us. To that end, we will remain focused on our key strategic priorities of product innovation, improving the in-store experience, obsessing over celebration opportunities and leveraging our North American vertical model. We look forward to discussing our fourth quarter results and our plans for 2022 to advance our growth initiatives in more detail during our year-end call. “

In line with the strategy of improving the in-store customer experience and streamlining the overall SKU count, the company continues to update its assortment to target higher in-season merchandise sales and reduce the annual carry-over of inventory. The company’s product resets and more edited and organized assortments are expected to improve the customer experience by making stores easier to shop and product selections more relevant to consumers, while improving efficiency in inventory management. and reducing working capital requirements. As a result, the Company expects to incur a disposal charge of approximately $ 70 million in the fourth quarter for inventory that will be discontinued or disposed.

These updated financial expectations are based on the Company’s current estimates and subject to the completion of financial and operational close out procedures as at December 31, 2021 and for the quarter ended.

As previously announced, the Company will participate in the ICR conference. The company will host a fireside chat on Monday, January 10, 2022 at 1:00 p.m. EST. A live audio webcast of the company’s fireside chat will be available online at Participants should log in approximately 10 minutes before the start of the presentation. A replay will also be available.

Forward-looking statements

This press release and the commentary for today’s conference call each contain forward-looking statements. Forward-looking statements give current expectations or forecasts of future events or our future financial or operational performance and include Party City’s expectations regarding revenue, brand comparable sales, Adjusted EBITDA. The forward-looking statements contained in this press release are based on the good faith belief and reasonable judgment of management based on current information, and such statements are subject to significant risks and uncertainties, many of which are beyond our control. control, which could cause our results to differ materially from those expected or indicated by such forward-looking statements. These risks and uncertainties include: our ability to compete effectively in a competitive industry; fluctuations in commodity prices; our ability to respond appropriately to changing commodity trends and consumer preferences; successful implementation of our store growth strategy; decreases in our Halloween sales; the impact of COVID-19 on our financial performance; disruption of the transportation system or increased transportation costs; product recalls or product liability; economic slowdown affecting consumer spending and general economic conditions; the loss or actions of third party suppliers and the loss of the right to use the licensed material; disruptions in our manufacturing facilities; and the additional risks and uncertainties set out in “Risk Factors” in Party City’s annual report on Form 10-K for the year ended December 31, 2020 and in subsequent reports filed or provided to the Securities and Exchange Commission. Although we believe that the expectations reflected in forward-looking statements are reasonable, we cannot guarantee future events, prospects, directions, results, actions, activity levels, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. Except as required by applicable law, Party City assumes no obligation to publicly update or revise such forward-looking statements, which are made as of the date hereof or as earlier as specified herein, whether at following new information, future developments or others.

Non-GAAP Information

This press release includes a non-GAAP measure, Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization, adjusted to remove the impact of certain items that we do not consider to be representative of our basic operating performance. We are presenting this non-GAAP financial measure because we believe it helps investors compare our performance between reporting periods on a consistent basis by eliminating items that we believe are not representative of our operating performance from based. In addition, we use Adjusted EBITDA: (i) as a factor in determining incentive compensation, (ii) to assess the effectiveness of our business strategies, and (iii) because our credit facilities use Adjusted EBITDA to measure compliance with certain restrictive covenants. When evaluating this non-GAAP financial measure, investors should be aware that in the future the Company may incur expenses or be involved in the same or similar transactions to some of the adjustments made to this non-GAAP measure. to GAAP. The Company’s presentation of the non-GAAP financial measure should not be interpreted as implying that its future results will not be affected by such adjustments. Other companies in the Company’s industry may calculate this item differently from us. This measure is not a measure of performance under GAAP and should not be considered a substitute for the most directly comparable financial measure prepared in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and investors should not view them in isolation or as a substitute for analyzing the Company’s results as presented under GAAP. . We are unable to provide a reconciliation of the adjusted EBITDA outlook for the fourth quarter of fiscal 2021 to the most directly comparable GAAP financial measure of net income. Certain items that are excluded from Adjusted EBITDA but included in profit or loss cannot be reasonably estimated or are not under our control. In particular, we are unable to predict the timing or magnitude of the tax expense, stock-based compensation, restructuring charges and early lease terminations as well as other potential items. without unreasonable efforts, and these items could have a significant impact, either individually or in the aggregate, the results presented in accordance with GAAP.

About Party City

Party City Holdco Inc. is the leading party supplies company by revenue in North America and, in our opinion, the largest vertically integrated supplier of decorated party supplies in the world by revenue. business. The company is a one-stop shopping destination for party supplies, balloons, and costumes. In addition to being a great retail brand, the company is a world-class global organization that combines advanced manufacturing and sourcing operations and sophisticated wholesale operations complemented by a retail strategy. multichannel and online retail. operations. The Company is a leading player in its category, vertically integrated and unique in its breadth and depth. The company designs, manufactures, sources and distributes party supplies, including paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties, gifts and stationery all over the world. The Company’s retail operations include approximately 830 specialty party supplies retail stores (including franchise stores) in North America operating under the Party City and Halloween City names, and e-commerce websites, mainly through the domain name

Source: Party City Holdco Inc.

About Donnie R. Losey

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