Party City Holdco Inc. PRTY, -8.80% shares slumped 12.6% in Wednesday premarket trading after the retailer said its fourth-quarter sales missed Street expectations. In a fourth-quarter business update issued after hours on Tuesday, Party City said preliminary revenue is $645 million to $650 million. The FactSet consensus is $676.5 million. Comparable sales are expected to fall in the mid-single digit range, while the FactSet consensus is for a 2.3% decline. “[T]he rapid surge in COVID-19 cases had a greater than expected impact on customer behavior in the months of November and December,” said Brad Weston, chief executive of the company, in a statement. “This was evidenced by underperformance in regions like the Northeast, as well as in certain categories like tableware that are most impacted by the reduced size of social gatherings.” Still, Weston said balloons were a strong category for the company. Party City “disposed of” $80 million in inventory that won’t be replenished, part of an effort to streamline merchandise. And a previously announced sale of a “substantial portion” of its international operations is expected to close on Jan. 31. The deal is valued at $59 million. Party City stock has skyrocketed more than 205% over the last year while the S&P 500 index SPX, +0.22% has gained 15.6% for the period.
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