Party City (PRTY) Tops Q2 EPS by 2c, Miss on Revenues; Reiterates Guidance

Party City (NYSE: PRTY) reported Q2 EPS of $0.28, $0.02 better than the analyst estimate of $0.26. Revenue for the quarter came in at $544.88 million versus the consensus estimate of $546.32 million.

Fiscal 2017 Outlook

For 2017, the Company is adjusting brand comparable sales growth and reiterating guidance for all other line items:

• Total revenue of $2.35 to $2.45 billion
• Brand comparable sales growth of approximately 1.0%
• GAAP net income of $123 to $133 million
• GAAP diluted EPS of $1.02 to $1.10
• Adjusted net income of $148 to $158 million
• Adjusted diluted EPS of $1.23 to $1.30
• Adjusted EBITDA of $400 to $417 million
• Net debt leverage of approximately 3.5x times by the end of 2017

Highlights for the second quarter:

• Grew total revenues by 4.9% on a reported basis or 5.7% on a constant currency basis
• Acquired a minority interest in Punchbowl, a leader in digital invitations and greeting cards
• Expanded gross margins 30bps from the same period last year, largely driven by share of shelf1 gains of 150 bps to 78.5%
• Increased reported net income by 11% and adjusted net income by 17.6%
• Increased Adjusted EBITDA 13.5% to $96.5 million
• Generated free cash flow2 of $77.1 million in the second quarter and $114.8 million year-to-date, and reduced net debt leverage ratio to 4.1 times3

GUIDANCE:

Party City sees FY2017 EPS of $1.23-$1.30, versus the consensus of $1.27. Party City sees FY2017 revenue of $2.35-2.45 billion, versus the consensus of $2.4 billion.

For earnings history and earnings-related data on Party City (PRTY) click here.

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