...February 7, 2024 Spencer Spirit generated strong cash flow in the 2023 Halloween season despite the holiday falling on an early weekday. Revenue this Halloween season was just under our base case because the company experienced less store traffic, leading to a modest decline in same-store sales. However, the company was able to reduce costs as supply chain pressures abated, leading to a 270-basis-point improvement in S&P Global Ratings-adjusted EBITDA margin compared with the third quarter of the previous year. As a result, we have adjusted our base case forecast and project a 21.5% EBITDA margin this year. We continue to believe that Spencer's financial performance is dependent on the Halloween season. In 2023, the company operated 1,506 Spirit Halloween seasonal stores. We expect participation in Halloween will remain strong this year, with the holiday falling on a Thursday. However, we acknowledge the risk that a decline in consumer spending could reduce future demand and lead to constrained...
