Profits Up 20% for Card & Party

The discount party supply retailer, which operates 185 stores in 20 states, posted earnings of $364,000 or 10 cents per share, up from $304,000, or nine cents per share over the same period last year.

Revenue during the quarter ending April 30 fell 2.1% to $55.7 million from $56.9 million a year ago while sales in stores open at least one year declined 4.3% during the quarter.

"We are pleased to report a substantial improvement in earnings as we continue to improve gross margins and reduce our advertising expenditures. said Gary W. Rada, the company's president and CEO. "While this performance was a meaningful improvement over last year, we remain focused on implementing merchandising and marketing initiatives to improve sales,"

Rada said the firm, which suffered from an early Easter and a challenging retail environment, plans to institute several key initiatives, including a targeted marketing campaign and a strong Halloween program, which should affect the bottom line.

Greeting card trends have shown "a definite improvement," Rada said but he admitted that competition from dollar stores is having an impact. To offset that competition, the company plans to roll out a two-tiered pricing plan with cards retailing at 49 cents and 99 cents. The company also reorganized its buying team and added three new buyers.

"We are optimistic about our opportunities in the greeting card category," Rada said of the company's aggressive marketing plans.

The once-troubled firm filed for bankruptcy in 1999 but emerged in April 2002 on more solid footing.

The Napterville, IL-based chain, which sells products that include party supplies, greeting cards, wrapping paper , balloons and other special occasion merchandise, saw its stock price drop 26.1% in the last three months with per share price closing Tuesday at $8.90, down from a 52-week high of $13.05.