Weight Watchers International Inc. raised its 2015 earnings
outlook as the company also posted better-than-expected
second-quarter earnings, sending its shares higher.
Shares rose 16% to $5.16 in recent after-hours trading.
For the year, the company raised its per-share earnings estimate
to 57 cents to 72 cents, from its previous estimate for per-share
profit of 40 cents to 70 cents.
"In the second quarter, our member recruitment trends improved,
particularly in North America where online sign-ups were positive
year-over-year," and Chief Executive Jim Chambers said in prepared
remarks Wednesday. "Late this year, we will be launching a
significant and comprehensive program innovation in all of our
major markets that we believe will return the company to
recruitment growth."
In recent years, Weight Watchers has struggled to recruit and
retain paying members, and it has been shedding members and losing
ground to apps and other gadgets that track calories.
In the latest quarter, the company's total paid weeks fell 17.6%
from a year earlier, including a decline in its online business of
18.4% and a drop of 16.5% in its meetings business. However, the
company said the trend was an improvement from the first quarter,
when total paid weeks fell 18.9%, including a drop of 21.4% online
and nearly 15.7% in its meetings segment.
Overall, Weight Watchers reported a profit of $27.9 million, or
49 cents a share, down from $54 million, or 95 cents a share, a
year earlier. Excluding early-debt extinguishment impacts and other
items, per-share earnings fell to 42 cents from 98 cents. Revenue
decreased 22% to $309.8 million. Excluding currency impacts,
revenue fell nearly 17%.
Analysts polled by Thomson Reuters expected per-share profit of
40 cents and revenue of $312 million.
Write to Tess Stynes at tess.stynes@wsj.com
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