Party City Stock Falls, Cuts Full-Year Guidance After Slump in Halloween Sales

Updated from 8:29 AM EST.

Party City Holco (PRTY) on Thursday lowered its full-year outlook after reporting downbeat results for the 2016 third quarter as Halloween sales were impacted by the holiday falling outside of the weekend.

The stock was down 5.33% to $14.20 on heavy trading volume mid-afternoon today.

The Elmsford, NY-based party goods retailer now sees full-year adjusted earnings per diluted share between $1.08 and $1.16 on revenue of $2.25 billion to $2.30 billion, down from its previous guidance for earnings per share of $1.17 to $1.25 on revenue of $2.35 billion to $2.42 billion.

The new forecast is below analysts' expectations. Wall Street is projecting adjusted earnings of $1.22 per share on revenue of $2.36 billion for fiscal 2016, according to FactSet.

"With respect to the month of October, the two day Halloween shift from Saturday to Monday this year, as well as the backdrop of a more distracted consumer, resulted in the negative Halloween brand comp, as we saw less overall participation on the adult side of the business," CEO James Harrison said in a statement.

Fewer customers are likely to buy party equipment and celebrate when the holiday occurs outside the weekend.

Retail sales fell 7% to $399.40 million year-over-year for fiscal October, which is the five-week period ended November 5 that makes up the majority of Halloween sales. Brand comparable-store sales dropped 6.4% during fiscal October.

The company operated 270 temporary Halloween City stores during the Halloween season vs. 335 in 2015.

For the third quarter, Party City reported adjusted earnings of 12 cents per share on revenue of $556.95 million. Analysts surveyed by FactSet were looking for adjusted earnings of 12 cents per share on revenue of $584.90 million.

Brand comparable-store sales rose 1.2% during the most recent period. The FactSet consensus estimate was for growth of 1.7%.

"While a portion of the third quarter was impacted by a softer Halloween season, we continued to see strong gains in our everyday categories," Harrison noted.

About 1.14 million of the company's shares changed hands so far today vs. its average 30-day volume of 302,535 shares.

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