Fri, Feb-26-16, 09:09
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Plan: P:E/DDF
Stats: 225/150/169
BF:45%/28%/25%
Progress: 134%
Location: NC
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Oprah Hasn’t Reversed Sales, Subscriber Losses at Weight Watchers
http://www.wsj.com/articles/oprah-h...hers-1456440538
Quote:
Oprah Hasn’t Reversed Sales, Subscriber Losses at Weight Watchers
Revenue, number of active subscribers continue to fall
Oprah Winfrey’s highly publicized weight loss isn’t yet fueling big gains for Weight Watchers International Inc.
The first glimpse into the impact of Ms. Winfrey’s investment and participation in the weight-loss plan disappointed investors, who sunk shares nearly 25% in late-trading Thursday.
Shares in the long-struggling company surged in October when it disclosed that Ms. Winfrey bought a 10% stake and joined its board. Since then Ms. Winfrey has appeared in ads, touted her progress on social media and hosted a conference call with members.
Yet the New York-based company’s revenue fell 21% in the quarter ended Jan. 2 as its membership rolls continued to shrink. It was the 12th straight quarter that revenue declined at Weight Watchers.
Active subscribers, a closely watched metric among investors, dropped 4.8% to 2.4 million. Investors have been banking on Ms. Winfrey’s involvement, plus an overhaul Weight Watchers recently made to its program, to reverse its slide in members. Active subscribers had declined 12.7% in the previous quarter.
“Our trajectory is turning around,” said CEO Jim Chambers. The company said the most recent quarter was the first time since 2011 that it had a positive year-over-year global recruitment, led by strength in North America. “Recruitment is an indicator that comes before revenue and it takes time for revenue to catch up.”
Executives said response to Ms. Winfrey has been strong and Mr. Chambers predicted the company would increase both revenue and active subscribers in the current year. But Weight Watchers forecast another net loss in the first quarter.
In its fourth quarter, Weight Watchers reported a net loss of $11.3 million, including an $8.3 million charge related to Ms. Winfrey’s investment. Revenue was $259.2 million, compared with $327.8 million in the year ago period, which was one week longer.
In December, just ahead of the crucial New Year’s resolution season, Weight Watchers replaced its eating plan with a new program called “Beyond the Scale.” It revamped its eating guidelines, placed more emphasis on fitness and offered new motivation tools.
Weight Watchers offers a new way of gauging Ms. Winfrey’s sway with consumers. In January, Ms. Winfrey told her roughly 30 million Twitter followers that she had lost 26 pounds while still eating bread every day, and pushed Weight Watchers’ share price up 20% from the previous day’s close. Some 40,000 Weight Watchers members participated in a conference call with Ms. Winfrey in January, the company said, and nearly twice that listened to the replay.
Weight Watchers’ shares, which were trading below $7 before Ms. Winfrey invested and surged above $25 in November, were down $4.15 to $11.40 in late-trading Thursday.
Shares of smaller weight-loss rival Nutrisystem Inc. fell 9% after hours. Nutrisystem, whose eating plan focuses on selling meals, reported a 28% drop in profit despite higher sales,
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Good thing she can still eat her bread!, but apparently the public isn't buying it.
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