(Reuters) - Shares of Party City Holdco Inc PRTY.N plummeted 62% to a record low on Thursday after the party supplies retailer cut its annual revenue and profit forecasts for a second time, as fewer shoppers bought Halloween supplies at its stores this season.
The retailer, which sells decorated party goods such as balloons and costumes in the United States, said sales of Halloween party supplies in the third quarter, including October, fell 3.2% from a year earlier.
“We are carefully analyzing our Halloween results and addressing the underlying issues and opportunities we have identified to improve the business going forward,” Chief Executive Officer James Harrison said in a statement.
Halloween, which fell on Oct. 31 this year, is one of the busiest holidays for party supplies retailers, when customers shop for everything from decorations to costumes.
Retail group National Retail Federation had projected shoppers would spend an average of $86.27 this Halloween, down from last year’s record $86.79.
Party City now expects 2019 revenue in the range of $2.35 billion to $2.38 billion, down from $2.40 billion to $2.45 billion it forecast earlier.
Harrison said annual results would also include an impact from helium shortages, higher freight and distribution costs.
Party City cut its full-year earnings forecast to 84 cents to 91 cents per share, much lower than its prior range of $1.26 to $1.36 per share.
Analysts were expecting annual profit of $1.26 per share and revenue of $2.4 billion, according to IBES data from Refinitiv.
Third-quarter revenue fell 2.3% to $540.2 million, coming below the Wall Street expectations of $551.1 million, mainly hit by shortages in helium gas, known as a party gas used to fill balloons and make the voice squeaky.
Excluding items, the Elmsford-New Jersey based company lost 28 cents per share, while analysts on average expected the company to break-even.
Shares fell to a low of $2.32 in morning trade before easing slightly to $2.65. If current losses hold, nearly $330 million will be wiped out from its market capitalization.
Reporting by Nivedita Balu and Soundarya J in Bengaluru; Editing by Sriraj Kalluvila
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