Party City Holdco (NYSE:PRTY) reported first-quarter earnings that were as bad as one could expect during the coronavirus pandemic, but said it had negotiated a deal with some of its bondholders to raise $100 million while simultaneously cutting its debt load by 25%.

The party supplies retailer saw its stock lose 40% of its value over the past three trading days, dropping 24% just on Thursday. But in pre-market trading on Friday after announcing the deal, shares of Party City were soaring 30% higher.

Group of people releasing balloons

Image source: Getty Images.

Get the party started

The company said it closed all of its stores on March 18 and launched a curbside pickup initiative a week later. But revenue dropped 19% to $414 million and comparable-store sales collapsed 17% for the period.

E-commerce comps also declined by more than 15%, but when adjusted for the curbside pickup, delivery, and buy online-pickup in store programs, comps were down just 6.9%.

Party City reported a GAAP net loss of $541.5 million, or $5.80 per share, though on an adjusted basis, the loss was $26.4 million, or $0.28 per share, compared with profits of $1.1 million, or $0.01 per share, last year.

What apparently has investors in a party mood was Party City's deal with 54% of its lenders that hold the company's 6.125% senior notes due in 2023 and 6.625% senior notes due in 2026. The agreement, which was first announced on May 28, would deleverage the balance sheet by approximately $450 million while raising $100 million in new capital.

Party City's stock still trades 82% below its 52-week high hit last November, just before it reported disastrous third-quarter results that resulted in the stock losing 60% of its value in one day.

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