Party City Holdco (PRTYQ) 7 Aug 212021 Q2 Earnings call transcript

Good morning, and welcome to the Party City Q2 2021 Earnings Conference Call. [Operator Instructions]. Please note that this event is being recorded. I would now like to turn the conference over to Eric Warren, VP, Treasurer and Investor Relations. Please go ahead.

operator. you, Thank and everyone, joining us. Good thanks morning, for quarter morning, results. released second we our XXXX financial This

find copy can at You a investor.partycity.com. our release website on of the press

on executive Now who introduce like our I'd are to here today's call. team

note beliefs have management we Todd and our future and for open results their the with it Chief Executive Brad may by uncertainties Please about start Vogensen, the future make and statements. performance, regarding prepared forward-looking cause We'll up statements to and Weston, remarks expectations Chief company's future from that Officer. these to and business events actual We discussion, statements materially that Brad call could Officer; in risks or prospects differ our are today's plans. Financial These Todd subject Q&A. before

as updates we no realized. Although can in a review expressly duty statements our we these the factors filings. events in harbor will or in whether be expectations the as safe provide of everyone reflected provided future We our believe contained urge otherwise. are any We forward-looking reasonable, statements earnings as the expectations to to release assurance SEC well disclaim risk forward-looking such statements, new our result information, that give to

to During measures today's refer and call, we non-GAAP both financial and operating GAAP results. will of the financial company's

financial non-GAAP call to the Weston. to the reconciliations regarding Brad most GAAP and I'll information release. earnings the refer measures And measures, to comparable more please our with For over turn directly that,

commentary provide joy and outlook that support to second the priorities well our we will call call create making the to our it review Eric. operational make unforgettable I'll open us detail for questions. everyone, I'll your Thank purpose highlights quarter as begin strategic the on financial some Todd joining as before against up discuss Then of Good we're the thank you a performance. memories. to progress morning, you, of our performance more easy and with our today. inspire

up Our second with $XXX for quarter or was million. Retail up better wholesale than year-over-year brand sales the and were up increasing XX% million, quarter. XXXX expected sales comparable was sales XX% business XXX% consolidated XXX% to total to relative our with $XXX

on most recent this as impact and to pandemic view into which year the trends we given continued for trend our core given product. few quarter core for encouraging are continues on categories, strong everyday We well from Party for everyday most broad-based. saw to very results across were month XXXX. compared the normalized celebratory was consistency mention restrictions the us very XXXX, the pandemic May, saw we March April saw most with bulk anniversaried to into in we're quarter, economy momentum the business, During to categories. closures strength The subsided, XXXX, impacted celebrate. the each continued our we in an core and the month of quarter the being pleased the QX in store relative the driving of up improvement QX April again the the business performance which A and XXXX. rely we solid and XXXX QX, highlights in acceleration continued City and Compared very opened to as bode the Overall, to in both QX the with our saw the in performance of consistent we ability with in very consumers July

pleased were improve during of to performed In celebrate continues didn't the people graduation. pandemic with to they as we seasonal celebrating particularly business last seasonal QX, performance the than better and Our year. return holidays

meet that shopping teams in needs. their continues to executed, in-store Our providing online, consistently consumer the and assortments, way both better with a

in XXXX, continues digital our primarily our core double digitally with enabled digital spot strong within momentum to strong see be versus sales strength up bright to continue categories. business. digits We Digital reflective a of

in wholesale has given the to measures. has Canada restrictive not of rebound continued environment retail. as strong related business more to as lag rebound, Our pandemic begun albeit a

However, continues to production the time. celebration we as $XXX to a operating restrictions we a made perform versus now recent model. easing and vertical pleased we and our North quarter approximately of Anagram with margin product which occasion to increases last gross versus innovation. innovation are that our serves sales discuss From increasing strategy, capacity the we're quality, and million well keep extremely pace. obsessed I'll in on well the the finally, leverage profitability building to QX reducing And down blocks as year-on-year committed of in on EBITDA gradual in-store debt expenses over product with ended recovery perspective, we with XXXX continue market. year and we transformation the our net are and focus Starting American with fundamental remain progress being debt advancing experience, increase. on

impact leverage consumer In These opportunity for insights decision. categories: our I that We these XX-person of As tableware over to customer-driven the freshness of $XX. these boy's businesses. reset to across in we data created market, candy, is we bringing the introduce tableware. to innovation focus girl's example XXXX, now introduced solid categories. the on is having noted and great to and and product resets X party on continue favors, a drive birthday, innovation stores we've Birthday, X,XXX kits innovation available new A core meaningful performance products our

to identified the allow settings kits events. Our to provide own up needs value. together table a event options to a tableware put XX point for a These at party on great with putting her team stamp of host new of people pain larger her that all her personal customer color

the quality. signs grow graduation personalized, exciting brought investing also category be with innovation in that new can We helped which We're assortment yard over XX% XXXX. and product

on is carry desire points improve higher consumers with product on We're quality These Our our new at better work across similar products can gross that to quality expanded to capitalizing are innovation. the price margins. improvements product work as complements delivered. resonating consumers' purchase or

breakage, improvements frustration product packaging our the a we turn which improved is utensil. for of example, for customers. the point the and both structural has XX% an tableware major out product The to rigidity have to As made

upgraded was packaging product convenient for to of more Additionally, unused and it's recyclable. storage any allow

experience. plan to date. in year-end QX, in-store to XX have we including to XX openings additional expected to of XX to XX XX. We total stores, or stores opened our the our next-gen remodeled XXXX, total new In bringing store Moving end QX, bringing next-gen by

stores we refine are are results with our pleased prototype. and to next-gen as the continue We innovate producing the

digit remodeled control their are In averaging sales compared stores our percent to of stores. mid-single increase fact, a

remodeled tenant improvement allowances. is is only after capital forma pro for store current $XXX,XXX it Our spend approximately and a $XXX,XXX

sales. get lower In strength formats when payback an continued assortments, from roughly period in committed lift, addition, more we carry more beyond. performance each store types rollout generating on we of aggressive curated to shoppable and $XXX,XXX still the less the in less norm, our the store and generally we XXXX vary plan next-gen the to higher shelf of X allows while assumptions Even inventory years. see than Based remain in us

Next, being obsessed. celebration occasion

plan ranging this Each across of resets of increases. major relevancy. on from plan the as delighted this update to with are innovation lifts all be of remain meaningful strengthen this categories double-digit are and in have mid-single our produced to customers We year the the year we believe unprecedented introducing performance will strong we our year category of We categories level changes an major committed making. to all

As all with becoming we we're continue for consumers, to building increasingly grow trust celebrations. their our relevancy in destination things

and critical metrics our Our learnings is across our data of improved increased ability of we're to that growth demonstrate end, key a that into needs understanding accelerating relevancy. processes focused and consumer our To stronger execute. integration on

associates. but not ability improves achieving inventory in Our driven plan. and and the key The greater on customer, seasonal curated for efficiency shop improved These on improvements are inventory teams as staying gross resulting improved lean by and which XXXX focus invest categories also returns on while disciplined our exceeding inventory turns are merchandise and management functions. significantly store sell-throughs in are inventory now items only planning improved we more sales assortment, margin for

North Finally, focusing on vertical our America model.

improved American model, ongoing chain, increased North vertical integrated to our streamlined centers. and our making in in distribution leverage capacity to plants throughput improvements continue including manufacturing our We supply our

are headwinds are you chain broadly industry. there supply discussed the aware, across As

albeit insights seen and improvements disruption to relative minimal from in season, challenges. finding a important the category. new innovation including this we have quality year. importantly, working are Most last last year in substantial of receipt some, between stores alternatives through expect ready delays, expectations currently and Halloween We important XXX Halloween increase we leveraging stores, City current are XX and the with we While the for in

In our remains environment of outlook, the operating dynamic. terms

them managing forecast. now Rising raw our not are formal at inflationary the our a along for of labor economic broader The level So are costs, are wages and XXXX. providing freight full with landscape in we're incorporated we year part of increasing every and material business. headwinds outlook

retail power us in pricing wholesale price costs allows Our the mitigate to meaningfully both adjustments. with rising appropriate markets and

marketplace pricing category broad protocols our discuss. and as at These highly will Our and distribution, given each in learn analytics are us detailed advantage of allow point capabilities make Todd our with intensifying imported pricing basket, point, to inflationary the knowledge of elasticity along decisions. each including and of test important SKU price role increasingly the pressures, and

and by the pleased results our So of in acceleration we're strong was and quarter second underway online, encouraging very at wholesale. recovery a well at highlighted quarter with retail trends sequential summary, and The business.

and demonstrated We well growth focus transformation near on term. is execution to strategy to that strength have long in X position the consistent of our and quarters, last which us a and demand and the categories over relevancy disciplined core testament everyday for stride continued our resulting the our capitalize continued

As are and environment back and dynamic, inventory the from to of prepared Halloween season of for are an remains a we year, for assortment we perspective. positioned while variety the the half well demand the upcoming scenarios look

turn and excited outlook and detail. refined marketing, I'd focused go-to-market to the elevated now in to discuss capabilities. greater are second XXXX results teams omnichannel Todd Our And improved over and like we the our position about to are quarter call our

I'll discuss XXXX. quarter and key we're how Thanks, our approaching then focus Brad, good of second of the and everyone. I'll fiscal performance the morning, Today on rest highlights

our to on the slides, For Investor press section available our and accompanying which website. regarding full refer financial details are results, the our release please of Relations earnings

XXX%, our and sales business including saw core brand the categories. XXXX, pleased year with in second up the Brad driven As quarter. revenues the period. categories. strong we in primarily broad-based are Brand in the XX%, discussed, XX% core Consolidated prior increased Versus increase we versus comparable sales approximately strength XXX% by our acceleration the performance comparable increased approximately a in were very

revenue Wholesale in of second quarter represented increased of online an XX% versus Additionally originated the of that of operations for basis versus sales e-commerce COVID-XX second points XX.X% This in our XXXX, primarily the percent significant the increase quarter approximately the of mix, delivered first XXXX. growth strong international and the quarter offset the our was impact prior XXXX. the divestiture in period. of by year increase pandemic portion due to partially XXX a our

the the year prior wholesale the versus XXXX. divestiture, X% or Excluding revenues impact increased XX% of versus period

Importantly, subside. to the second franchise we independent were by the trends restrictions sales quarter as we in our delivered to improving customers COVID-related pleased and continue

in primarily and by Adjusted second the in we revenue more $XXX for a year and focused gross favorable the basis expenses offset normalized Adjusted early primarily the and points driving costs of mix, basis the growth. sales operating we're place million, prior levels. business that fixed still expense $XX period versus on prior year approximately increased it's driven Although period increase and wholesale by points were expanded our delivery driven are rate encouraged million XXX an from basis the leverage X,XXX from XXXX, growth strategies have by X,XXX overall services. product of margin on improvement, by cost and in sales quarter point recovery, partially resulting

in of period loss share $X.XX per loss $XX EBITDA earnings million a prior result, an adjusted $XX year XXXX. quarter QX $XX share per million operations the year operations of Adjusted million million adjusted and from EBITDA income earnings And of second $XX of XXXX million compared and operations in million to was per adjusted second $XX an was XXXX. share in quarter XXXX. a adjusted in adjusted compared in to adjusted to $XX last from and compared $X.XX of $X.XX in of from loss was As adjusted income the

inventory primarily sell-through driven to to items was in-season approximately international excluding balance quarter inventory, the in was cash divestiture. flow. decline of million by Turning less year-over-year, Together, the of as well year-over-year sheet for discussed, previously order Inventory resulting these in the approximately international sold that higher disposal seasonal inventory XX% and $XXX carryover our namely as of as the and inventory that strategic X items. in annual a of reduced items of business drive these down part X accounted we've XXXX fourth X%,

prudently manage and second through we ongoing flow Year-to-date, year to the levels. continue million improved operating our net pleased operating at availability. We million, with capital of liquidity, cash inventory income. expect $XX improved approximately were and opportunities which cash $XX in the working ended quarter, $XXX improve to primarily versus sales period, million and our by also higher approximately comprised revolver We of million $XXX prior quarter

million was $X.XX our of period billion. net addition, principal lower the In at approximately cash, $XXX than year balance prior of debt,

throughout trends growth. the turn Now our remain our my prospects We and economic continued business the about let comments to me for outlook. optimistic

high the not We specific providing that of earnings also current given trends. and and level a Therefore, we're recognize annual a uncertainty, guidance. has inflation COVID-XX still environment sales macro

earnings increase XXXX or we to period comparable comp period the quarter. versus and However, outlook In approximately versus sales did mid-teens $XXX consolidated third a to be the percent our digit our range XX-week the provide increase in million we million earnings today's sales the sales high-single expect third in comparable with $XXX release, quarter, for in the the XXXX. brand in percent

the to Lastly, million expectations quarter. to range in we EBITDA to few relative are note million. $XX There expect a adjusted of QX $XX to for elements our be the third

metrics. operations with of the revenue on in our financial is our First, of January there XXXX, international sale other impact reminder, an a and as

As generated of approximately million amount $XXX international we previously, in shared XXXX the an with revenue business immaterial in profit.

third that it international is However, revenue purposes, business for the of to the important and quarter EBITDA modeling note during of the third approximately million XXXX. quarter $X generated in $XX divested million

in inflationary Second, industry, our we on the freight including impacts heightened and experiencing cost like many labor are business, headwinds.

global is we actions rates are that facing costs all also we stock With support supply positioned chains, freight high team higher to to the our nearer We season. logistics holiday but end term. over Halloween confident our continued challenges ensure expect taking well our prudent for the incur fully to strategies, feel

plans, quarter earlier that fourth offset to quarter results have We quarter also the pricing to by estimated is are while limit well guidance additional a dynamic. million $X to taking pricing of mentioned includes net of to expect to on other Based our It is more overall third our inflation important efforts $XX significant be but quite nature actions, Brad benefit the to profitability. overall as still actions mitigation as impact our headwinds, on to note we cost impact third as actions of our inflation our the million. current mitigation some

$XX divestiture is and our international business headwinds million. inflation the together, $XX impact of Taken EBITDA expected QX by our to to million

million, expectations capacity with of up of $XX related full the $XX to increase to of of million, investments range million year in the the CapEx growth. XXXX, from $XX primarily for support expect million terms now to the in In CapEx $XX spend Anagram's we previous

and performance of remain summary, in our we encouraged really pleased So business. second financial are the the with momentum operational underlying and by quarter

call of execution over session. to turn Our the for growth half the team's on has operator us of I'll start back to business with our priorities the to the the And in that, year. disciplined received opportunities the Q&A the positioned key capitalize

Instructions]. [Operator

question first from The Stephens. comes Nelson Rick from

sales, to ago, to a they're the about year So pre-pandemic tracking single-digit mid-teens commentary compared XXXX. versus follow-up the high compared I'd like on July how to

QX digits our our or and you'll if the versus QX XXXX was last trend XXXX. QX our we're XX% and July should the in single in -- I comps, the high in say, -- remember And Yes. in

demand I be business really in strategy sales. as as As to sales we put that my continues wholesale our across the our as and X that well of remarks, broadly and the strong -- business, in said we've as retail of strong top to follow consumer top addition we've back digital segments seeing coming really strong, our that And said, retail, XXXX. place the at transformation XXXX seen would July trend of retail very we anticipated to both have we as of into we strong that's as on attribute now wholesale overall underpinnings on our all intuitively continues

You an of thinking remainder you next rollout also acceleration next-gen discussed is and guess they're year discuss next. around what rollout? some for of the the sounds mentioned performing I what now the year. financials plan you had stores. well. you're like accelerating plan The It think for that rollout, And the about this keeping could I you from in for

we've And the momentum relocated to a positive results, a we new opening. or as store building remodel been continue a it's store, see Yes. store whether

we been -- We'll built And execute momentum those continue piloting in make our refinement we our in our are momentum building XXXX, so going that to the because ongoing. -- we've after on XXXX. some we built every ability prototype to build into

it better as from We categories continue to the to we're assortments associates capacity and in well to find even operating both our our those. continue to ways ensure make tweak maximizing consumer as an for that the

we're So bullish. extremely

beyond. for number as well We as we the at new opportunities store we're to an of remodel Obviously, opportunities haven't pegged ahead look as XXXX. XXXX exact and all looking

Our upgrade years. several over is of continued desire majority to the the next chain the

we can. So we'll as be as aggressive

that. thinking Finally to wholesale you, give the how customers outlook insights could as operation are about if you Halloween? the through ask Can Halloween, for planning for I you're any your what

Halloween. of lot talk not thinking We're it fourth -- directly in influence as to quarter. about falls going the factors to obviously Halloween a we're how Yes. that There's into

prior We learnings data years. and customer have lot insights and to more relative a

last a over that this teams executing and months that -- are going really merchandising are well, and and with important leading had ready that to Halloween the have store to to up new built XX get excited We season. fun

our -- merchandising all on in level content, our in the our believe the as our all techniques improving sort have a any made our assortment, volatile fronts and time. to will investment ready we strategies go-to-market store, continue certainly improve real our dynamic We in product in and progress over past for digital increase of of a demand which of our marketing are relevancy We're and Halloween. I still

everybody to consistent like are is stable, to we'll Our but is participation same what consumer see is looks have in it wholesale Halloween, outlook as relative the feeling sort Halloween of ready. and we

question Bank from William next The comes Reuter from America. of

The first $XX million impact million, quarter Or third product inflation of was that include question to was on costs? the higher $X the freight on impact. that just the itself? Did

pressure go. was base costs did That and I'll as any pressures us include the as that we're product Yes. that impact materials just is seeing, supply really inflation the chain freight seeing. everybody's on raw that or all really well -- biggest for

look on with contracted you for generally regard this Can that Yes. imagine And you the fourth at to number times, have point the are second you share year? quarter. the would you number are market? purchasing might that freight your given pretty might half I look lead guess Or And then spot what guys what like like? I of good the perspective for

QX chain building we're front this supply we're it's the the guidance, but think I on during fair to have say been not seeing the giving year. pressures at So that point,

year. to the And expect with everything continue would inventory match rest up of way flow. see we works, that our the to costs we the our So through

those So in flow-through to costs see little Halloween, are given a bit the more QX. from timing going you of

We those some have QX. in to better with we pricing action opportunity said should mitigate of also costs

coming we quarter. of together things into net fourth X to the both So as get out of those kind

container from the In really a a managing shortage perspective, terms is versus acute of ship perspective. contracts, from

we're hearing or well is and what same from a you're So be have are fairly seeing. what the you retailers facing that's not, going most that whether contract we to pressures

chain a ways still where a position a place, perspective in and really for us, feel a fortunately us strong able we're to put contracts been team for that's goods the Halloween where even good well get to there's from and to have season. feel alternative bring we in though have but about supply in position positioned structure, look and product for are for we we that We we in good of in-stocks good ahead our cost that need

Okay. just And then me. lastly for

to would right by like impact the higher -- well. continues Would second I sales on revenue percent you now? an during Meaning out demand be your quarter, you much July you inventory as if guidance is strong as that guess had mentioned stocks of Given go X from third would there quarter currently?

well constraints as the supply our those Listen, pandemic, in experienced not there spotty. July and and in we volatility little itself in and through to business supply even to one that those. categories. have well has we've very of a And impact QX the our constraints been may chain one see interesting results -- relative we QX our height that or any are out It's They're the certainly another across and of recovers in negative bit, shortages came sustained but because market QX. and category be do challenged relative

The next Group. comes Telsey Feldman from from Joe question Advisory

to person other product sense, that are makes are there areas and a where you that like you things get But you there's a opportunities $X I basically. that XX-pack like to the innovation price big -- which tableware, mentioned lot can right down share wanted can there with about some ask us now? of $XX, targeting managed like and there you you are to other

and our eliminated So that talked that in boy's We and gaps product I of gain nonproductive the in favors may instances. in replaced, items with have. what candy. feedback, curated data we consumers and in from allowed gleaned new some girl's some thereby be looking understanding sales assortments of SKUs, like some old product the Those where I said, consumer product that birthday consumer just relevancy insights and front new we these primarily consumers really some that really for, focus the us with we the the were friction -- they're in of the or putting introductions groups, product were as well points made to many really the as and about

adjustments As at quality, opportunities finding without And we're doing our adjustments, to and our are can neutral we and improve to margin either for they're price improve category, any margin places data the impacting it that we cost or we opportunities that price new know value higher are every that therefore it's based and cost elasticity we good or for our and and news look these do modeling when single enhancements, you tell pay on willing accept I to the quality. we the finding in they're a the the innovation, if getting price consumer innovation have is is quality.

So they've extraordinarily well received. been

We how this a assortments, we teams relevancy. some really just how in in think build our mindset merchants our the and is have product their pipeline development operate opportunities and and to about

actions more a little ask, share on in planning a I the in? planning confused to And helpful. that by to pricing statement and the Was you're take wanted that I was or mentioned what areas to I quarter. you that meant guess taking say That's can color up you Or do little prices you're to down? third that then you're

work and aware. make poor So our to down being price level in where analytics be smart do include most practices stating it competitive When as instilled decisions. taking us and XXXX to barrier answer did category elasticity stabilize I retail we level initiatives data prices to it talked that lowering a price around let to appropriate. really That and extremely the cases. about showed to perception analytics as me increases by our basket start pricing was included consumers. outlined really relevant we allows analysis more at SKU But with our to also that we've the the be And price often performance, in our

a the as So that headwinds we cost use those view have related and remarks, a our constantly, headwinds based way like mitigate that, prices to test-and-learn broad address to said approach makes long-term just to of in sense goals. customer on as growth we a to we'll prices we our And in adjust do our I changing market.

we the elasticity power understand the us we pricing have price supply allow And right find throughout will as the that category-defining to pricing the have really ability equilibrium. brand, to So chain.

Got it.

Okay.

just So others front. have particular then continue are and makes are the pressures regard there or asked the any maybe those on areas? optimize seeing chain categories with sense. alternatives That those to that that what about, pressures that supply where can you're then on to in -- And you

-- has we've And where would manufacturing through supply best very capacity them base. those our capacity our demand about needs. to I way to meet our or is think our they're and own demand shifted, the to shifted ability get product sourcing

we where through high So up capacity we're pressure ramping and demand have so is really coming demand changes.

therefore places of where we're driven are So you talking highest level highest to the by the the really working demand. on of performance, capacity categories we're the can having that level continue maintain that in the tell about, to demand

Goldman comes Sachs. Giannelli question Jenna from from Next

just inflation year, the that if for quarter. about how remind talk headwind of headwind is a helium. about I'm one first for hedging on how just and the The a 'XX? any that could is balance of follow-up we specifically, assuming But for think much should that helium early includes the on us the we outlook, third

Sure.

cubic cost just helium. level there back and put that as move per increases us rates playing got for We've if in in contracted wrapping much into are more QX, XXXX. in right a XXXX, on field. helium QX you for foot Any we look helium we're line helium, headwinds we our But our there. on some were versus around So at QX with

expect not and So would we're there not go XXXX we inflationary either. as pressures really really seeing any see to any into

amount on feeling price gone place. So couple we of have we're partnered that, with long-term the We have secure at. and of have out a supply the contracts and actually directly. based wells with we we And even have put in that it

for Great. a I important such it's just driver. the want because If then we traffic about to minute. about balloons in And ask that an can Okay. just store talk

merchandising, retail just this Specifically, in compare store, XXXX. how how seeing And to balloon compare some category back checkout, here you're et relative as Basically might in whether now service, customer working I'm and through you're customer curious cetera. upside in-store. maybe the sales and the experience that we location, that be there opportunity still trends

continues strong. ongoing XXXX throughout in we the is demand XXXX, love a as of And of as the had the to our strong and balloon our balloon into XXXX -- it your seeing see year to sales in and we've very question now demand. highlights sales QX talked as driver be experience this around to well stores. Our and Relative about, like

the which both come for in online for and to items continue those the experience is in as delivery, and experience parties adjusted focus degree quantities and in available bouquet which and the to July, pickup waiting in Also consumers are time, a their personalize the the well in time that We're relative make balloons walk-in our is some store the key whether occasions. of capacity consumer seasonal sales buy we bouquet them for as pick sales adequate the innovations to as make we changed around that to them. about larger have very adequate own those are the preorder associates to market are marketplace drive both numbers ensuring have happening product brought of has the well. balloons to we topical those and balloons, items the come that focus. them things build for the larger that doing for to their driving to at Many Xth of consumer, that's letters balloon The and sales graduation, onset We of of with and assortment have we types and now stores lot premade up for -- in-store and consumers, ready ahead well parties. as that with consumers a for as standup that our on of seamless into

from from Hale question Holden comes The next Barclays.

that Can that to stores Halloween questions. I XXX just to us remind had City… how you're that Halloween planning, two you compares XX XXXX,

XXXX, XX. we In XXXX, XXX. And had we in had approximately

if changes it more across you country. perhaps might any July since if COVID talked wondering pretty there was be regionally there I about are the then performance or outbreaks seen had through And even was U.S. the you -- where

Yes.

areas are As over have to like of of overall XXXX place in business areas, certain seen South. strong. seen geographies we've increase We've the areas that Deep impact the the a restrictions put have in in in watched bit sales California, increased being in been and our increase slowdown Florida, in these closely areas, an still cases to very are not but those

Karru The Instructions]. comes Jefferies. Martinson [Operator question next from from

back on circle inventories. I just Halloween the to wanted

the ready season, so just so that fully that you feel in-stock you're in Halloween either in are your for we're or that clear you goods or the your stores and have So warehouses in you transit correct?

Yes.

supply have products place have we we in of So a the chain. every view

We have products in our stores.

our in DCs, products have We product and on water. have the we

as so at we years, to look relative solid XXXX, in And can XXXX, at we look prior position. we're a our in-stocks

customers' on I all, portion you of wholesale read And mean that your produce that in get good do Like times? terms for you needs of order traffic? terms Okay. to in advanced then when long a how do the

our of approximately wholesale January majority of November orders the for from Halloween the year. come So anywhere in prior and February to

Okay.

already is done. that So

read on a have correct? And so good that, you

Absolutely.

Okay. our And some down the uses? cash prioritizing to positive You you talk at the this of Anagram, adding kind Where are when calculation we Can full you of year, flow in debt. you then uses cash in free paying should mentioned be capacity look here? year.

paying can that debt. sure we on making Absolutely focused down be

foremost, has to initiatives. operational growth internal and First come funding

So have to list should but capital for from doing we're down pay the be. and is a working the we sure right of top capital of making debt business, pure of levels course allocation perspective, continue the and that that

JPMorgan. comes Michael next Coppola The from question from

one Just there any regarding any much question COVID. is remaining? all rents sort update been of on done that during repaid? how is not, Or if deferred Has

Absolutely.

is out there. So most were we still that We haven't be scheduled course -- the off really over of announced to of XXXX. paid

half. QX. have in mostly another million be the million paid we really will And another $XX $XX the left over of course we second So that

happening? Great. color any guys sort that parties that Have kind just are gives second question. the Understood. to as you size a And that? to of of Or as of anything seen changes

Yes.

of analysis average in parties, can sizes there our larger see being that product quantities in of breadth in we're pleased that that we places the we well are and of quantities the seeing order return which value certainly, some of obviously to for a have We purchased bodes which basket and basket, the is a with.

This over concludes Weston like to our for turn closing the to question-and-answer remarks. Brad session. back I would conference

the ongoing our in In closing, business. momentum we're with pleased

and consumers inventory and expand. to our product As our with we improve position, celebration assortments continues relevancy update

forward-looking for our well and customers on our easy Our as joy data insights create unforgettable make consumer and focus are improving inspire both relentless it and decision-making to performance-based ability to memories. informing as our

and strategic progress an and half will to As want we performance. to in thank of this the look we in make drive you continue Sachs I we to some us conference of the our excellent for there. day. back initiatives participating joining retail the our into year, morning, forward further be seeing let will September Have Goldman you on move know to you

has Thank you. today's Thank attending for The presentation. conference now concluded. you

You disconnect. may now