10-Q - Party City Holdco Inc. (0001592058) (Filer)

Thu, Sep 26, 8:32 PM (99 days ago)

For the quarter ending June 30, 2023, Party City Holdco Inc. reported significant financial challenges amidst its ongoing Chapter 11 bankruptcy proceedings. Total net sales declined by 14.7% to $449.9 million compared to Q2 2022, driven by a 9.5% drop in retail sales and a 35.8% decrease in wholesale sales. The gross profit margin fell to 29.7%, down from 33.7% in the prior year, primarily due to increased occupancy costs and losses from store closures. The company reported a net loss of $73.0 million, compared to a profit of $162.2 million in the same quarter last year, influenced by substantial reorganization costs of $23.3 million. Cash flow from operations improved slightly, showing net cash provided of $1.9 million, a recovery from a $99.1 million outflow in the previous year, attributed to reduced inventory purchases and increased accounts payable. Looking ahead, Party City anticipates ongoing pressures from macroeconomic conditions, including inflation and supply chain disruptions, which could impact future sales and profitability. The company is focusing on cost-saving measures and operational efficiencies as it emerges from bankruptcy.