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No Party for Party City

ROCKAWAY, NJ-The chain of party-goods superstores turns in a 2Q decline in comp-store and net sales.

By Dees Stribling | Updated on February 06, 2005

ROCKAWAY, N.J.-Party City Corp. has reported that same-store sales for company-owned stores decreased 5.6% in its second quarter of fiscal 2005 (ended Dec. 27, 2004), compared with the same period in 2004, while same-store sales for franchise stores decreased 2.8%. Total chain-wide net sales (which include aggregate sales for company-owned and franchise stores) were about $356.8 million for the second quarter of fiscal 2005, a decrease of 3.0% compared with $367.7 million in the 2Q 2004.

According to Nancy Pedot, Party City’s CEO, the same-store sales decline was largely due to under-performing Halloween sales, followed by a lackluster Christmas sales season. “Christmas is always a difficult season for us, and this year it was very competitive,” she said during the company’s 2Q 2005 earnings conference call on Friday. She added, however, that same-store sales of New Year’s merchandise was up.

Party City also reported net income for the second quarter of fiscal 2005 of $14.7 million, or 74 cents per share, compared with net income of $19.3 million, or 98 cents per share for the same period in fiscal 2004. Besides the decrease in net sales, the company attributed the decline in income to higher expenses associated with investments in merchandising and logistics. “We’re in the midst of a complex transition, but we expect it generate benefits beginning in the fourth quarter of fiscal 2005,” said Pedot.

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