Weight Watchers Extends Oprah-Backed Rally With Higher Forecast
Weight Watchers International Inc.’s improbable rally just got fresh momentum.
The weight-loss company’s shares surged as much as 16 percent in late trading after it topped quarterly estimates and raised its full-year forecast.
Weight Watchers also continued its streak of adding subscribers, another sign that its technology investments and marketing campaign are paying off. Key to the effort is board member Oprah Winfrey, who acquired a stake in the business two years ago and agreed to become the face of the program.
“It’s strong growth,” Chief Executive Officer Mindy Grossman said in an interview. “The team has done a really good job focusing on the quality of the numbers.”
Winfrey will once again appear in ads during the pivotal winter season, Grossman said.
The surge in extended trading sent the stock price as high as $51.98. Even before the gain, the shares had risen nearly fourfold this year to $44.80.
For the third quarter, earnings amounted to 65 cents a share, beating the 51-cent estimate. Weight Watchers now expects full-year profit of as much as $1.83, up from a previous high-end forecast of $1.67.
Grossman, 60, took over at the company in July after years of running the shopping network HSN Inc. She inherited a business that was on the rebound after years of stock declines and customer losses.
An earlier stock rally in 2015, when Winfrey bought 10 percent of the company and agreed to pitch the brand, was short-lived. But the shares have come roaring back in 2017.
An updated diet program and a better digital platform have contributed to the company’s growth. Weight Watchers also has revamped its meetings, which long served as a key part of the five-decade-old system.
“We are confident our business momentum will continue throughout the balance of the year,” Chief Financial Officer Nick Hotchkin said.