The Securities and Exchange Commission has warned Party City that the company is at risk of being delisted by the New York Stock Exchange due to its failure to maintain an average $1 per share stock price over a 30-day period. The retailer has six months to regain compliance, which can be accomplished by maintaining a minimum average $1 share price over a 30-day period.
The stock will continue to trade under the PRTY symbol but will have a “.BC” added to indicate that it is “below compliance” for the exchange’s standards.
Party City has been facing a tough financial situation in recent months. Earlier in December, the retailer reportedly reached out to its creditors seeking liquidity help, and in November 2022, the retailer hired Peter Smith as its new COO to spearhead a planned $30 million in annualized cost reductions beginning in fiscal 2023.
During Q3 2022, Party City achieved net sales of $502.2 million, a 1.6% decrease from the same period the previous year, with comp store sales dropping 3.2%. The retailer reported a 3.6% drop in net third-party wholesale sales, blaming reduced demand at the company’s balloon manufacturer Anagram and a helium shortage at some retail stores.
When the retailer released its Q3 2022 results in November, Party City lowered its full-year outlook, projecting net sales of $2.14 billion to $2.19 billion, or approximately -1% to +1% compared to 2021.
“Looking ahead, we anticipate the current macro backdrop to persist and are taking action to best position the business in this environment and for the longer term,” said Party City CEO Brad Weston in a statement when the Q3 results were released. “We will continue on the path of progressing our transformation strategy but will be addressing structural cost opportunities and increasing operating efficiencies given the challenging environment. We are focused on $30 million of savings, with work already underway to deliver this target in 2023, including a corporate workforce reduction of 19% through a combination of position eliminations and not backfilling a significant number of open positions.”