What to Expect From Party City’s First Earnings Report

This is probably a company you have heard of or run by if you have ever had to prepare for a party. It is the party goods retailer you see all over North American cities. It has about 880 stores in the United States and Canada, and it went private during the private equity boom.

Through a series of acquisitions between 2005 and 2010, it built a retail operation that captures the full manufacturing-to-retail margin on a significant portion of the products sold in its stores.

Founded in 1947, the company started as an importer and wholesaler and grew to offer a broad selection of decorated party supplies, including paper and plastic tableware, metallic and latex balloons, novelties, costumes and other garments, stationery and gifts for every day, themed and seasonal events. Party City’s products are available in over 100 countries, with the United Kingdom, France, Germany and Australia among the largest end markets outside North America.

Party City was taken private back in 2005 by Berkshire Partners and Weston Presidio. The total consideration paid in the buyout was said to be roughly $364 million. Essentially, its IPO valued the company at about five times what it was worth back in 2005. Its IPO debuted in mid-April after being private for a decade. The underwriters for the offering were Goldman Sachs, Credit Suisse, Barclays, William Blair, Stephens, Deutsche Bank, Merrill Lynch, Morgan Stanley, JPMorgan and Telsey Advisory Group.

Since the IPO, Party City stock has steadily declined; shares are down roughly 8%.

Shares of Party City were down 1% at $18.81 late Thursday morning. The stock has a consensus analyst price target of $25.25 and a post-IPO trading range of $17.00 to $22.60.

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