Why Party City Stock Rallied 15% in Early Trading Today
Shares of specialty retailer Party City Holdco (NYSE: PRTY) rose as much as 15% in the first 90 minutes of trading on May 10. The company's pre-market earnings release was the driver. And despite the company losing money in the fiscal first quarter of 2021, investors seemed to like what they read.
Sales at Party City increased a touch over 3% year over year in the first quarter, however, comparable-store sales rose a huge 36%. On an absolute basis, Wall Street was looking for revenue of about $405 million, which the retailer's $427 million top line easily beat. On the bottom line Party City reported an adjusted loss of $0.05 per share. That, too, beat analyst estimates, which had been calling for an adjusted loss of $0.18 per share. Investors tend to react positively when a company beats expectations in dramatic fashion, so the stock advance makes sense.
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Source Fool.com
