Halloween is Party City's most important season. In 2019, the company said October sales were "disappointing." Party City says it can improve Halloween in 2020. But there are more challenges facing the company, including a global helium shortage and changing consumer preferences. Most people think Christmas is the only time of year that matters for retailers, but it depends on what you're selling. For many retailers, holiday-packed November and December is make or break.
At Party City, Halloween is the holiday that fills its coffers.
And in 2019, the party supply retailer said its fiscal October results were "disappointing." Revenue for the month was $432.6 million — 7% less than in 2018. The stock crashed 67% in one day.
"They were down so much, it was shocking," said Jan Kniffen, CEO of J. Rogers Kniffen WWE. "And I think that partly was a reflection of them telling the world how bad Halloween had been and everybody knowing that if you can't win in a party business on Halloween, it's hard to win."
Party City declined to comment on questions about its performance, but it did address concerns about a worldwide shortage of helium. Analysts estimate that the shortage led to a 2% sales hit in each of the first three quarters of 2019.
"We are fully in-stock in helium in our retail stores for the big New Year's Eve celebrations and this year all our stores are taking balloon pre-orders," CEO James Harrison told CNBC via email. "Each year we focus on maximizing store performance on a market basis, which is a part of our store optimization strategy and has resulted in some store closures, however, these are unrelated to the global helium shortage."
Party City says it expects Halloween 2020 to be better. But there are a variety of problems facing the business, including the aftershocks of the helium shortage and changing consumer preferences.
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