Party City Holdco Inc. (PRTY) has reported 1,088.58 percent jump in profit for the quarter ended Mar. 31, 2017. The company has earned $4.68 million in the quarter, compared with $0.39 million for the same period last year. On the other hand, adjusted net income for the quarter stood at $6.05 million, or $0.05 a share compared with $4.76 million or $0.04 a share, a year ago.
Revenue during the quarter grew 4.21 percent to $477 million from $457.74 million in the previous year period. Gross margin for the quarter expanded 24 basis points over the previous year period to 37.38 percent. Total expenses were 96.92 percent of quarterly revenues, up from 95.73 percent for the same period last year. That has resulted in a contraction of 120 basis points in operating margin to 3.08 percent.
Operating income for the quarter was $14.67 million, compared with $19.56 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $49.12 million compared with $46.53 million in the prior year period. At the same time, adjusted EBITDA margin improved 13 basis points in the quarter to 10.30 percent from 10.17 percent in the last year period.
James M. Harrison, chief executive officer, stated, "2017 is off to a solid start with first quarter results that were in line with our expectations. A compelling assortment, good in-store execution and strong holiday performance were all positive contributors in our retail business. In our consumer products business, we realized over 17% growth internationally in constant currency, driven by category growth and continued channel expansion throughout the U.K., continental Europe and Australia."
For fiscal year 2017, Party City Holdco Inc expects revenue to be in the range of $2,350 million to $2,450 million. The company forecasts net income to be in the range of $123 million to $133 million. The company projects adjusted net income to be in the range of $148 million to $158 million. The company projects diluted earnings per share to be in the range of $1.02 to $1.10. The company projects diluted earnings per share to be in the range of $1.23 to $1.30 on adjusted basis.
Working capital declines
Party City Holdco Inc. has witnessed a decline in the working capital over the last year. It stood at $343.76 million as at Mar. 31, 2017, down 5.72 percent or $20.86 million from $364.62 million on Mar. 31, 2016. Current ratio was at 1.68 as on Mar. 31, 2017, down from 1.85 on Mar. 31, 2016. Cash conversion cycle (CCC) has decreased to 85 days for the quarter from 174 days for the last year period. Days sales outstanding were almost stable at 24 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 94 days for the quarter compared with 182 days for the previous year period. At the same time, days payable outstanding went down to 32 days for the quarter from 33 for the same period last year.
Debt comes down marginally
Party City Holdco Inc. has recorded a decline in total debt over the last one year. It stood at $1,749.04 million as on Mar. 31, 2017, down 4.91 percent or $90.29 million from $1,839.33 million on Mar. 31, 2016. Total debt was 51.24 percent of total assets as on Mar. 31, 2017, compared with 55.49 percent on Mar. 31, 2016. Debt to equity ratio was at 1.72 as on Mar. 31, 2017, down from 2.01 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 0.71 for the quarter from 0.86 for the same period last year.
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