The downtrends that have marked retail, from declining foot traffic to declining sales, have spared Party City.
As noted by Business Insider, research from Credit Suisse analysts states that the firm should buck some of the headwinds in the sector as the company reaps benefits from its “unique business model” in the fiscal year ahead. The sell-side firm’s target price is $19, compared to a roughly $14 current price. Credit Suisse noted that “everyday business grew 3 percent” in the past year, “accelerating in the back half of the year as 3Q/4Q grew 3.5 percent and 3 percent, respectively.”
And, noted the research, growth was not predicated solely on big holidays such as Halloween. Credit Suisse cited the “vertical model” of the firm as helpful in navigating retail’s volatility. That vertical model also has been expanded in part by Party City’s acquisition of Granmark, which allows for additional focus on manufacturing and distribution operations.
In expanding manufacturing and distribution footprints, said analysts in the note, Party City “continues to grow its wholesale revenue to discount retailers and mass merchants” while also bringing on revenue channels tied to sports and movie theaters, which added $60 million to the top line last year.