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Tags: Weight | Watchers | Stock | Forecast

Weight Watchers Stock Sheds 20 Percent on Weak Forecast

Thursday, 13 February 2014 05:32 PM EST

Weight Watchers International Inc. forecast a full-year adjusted profit far below estimates, sending the company's shares down 20 percent in extended trading Thursday.

Weight Watchers, which also announced plans to "resize," said it expects to earn $1.30 to $1.60 per share in 2014.

Analysts on average expected earnings of $2.78 per share, according to Thomson Reuters I/B/E/S.

The company said it would finalize plans to reorganize its business in the current quarter. The costs associated with the plan are not included in the earnings forecast, it said.

"2014 will be a very challenging year," Chief Executive Jim Chambers said in a statement on Thursday.

Wedbush Securities analyst Kurt Frederick described the outlook "shockingly bad."

"(Membership) trends have been bad, trends are bad now. Expenses are also not adjusted yet to reflect the declining business," he added.

The company, which faces competition from diet apps and calorie-counting gadgets, said membership paid weeks dropped 8.5 percent in the fourth quarter.

Weight Watchers, which also offers a line of diet foods, reported a 47 percent fall in profit.

The company suspended its dividend in the previous quarter.

In aftermarket trading Thursday, Weight Watchers shares were down $5.98 at $24.60. The shares rose 3 percent to close at $30.58 on the New York Stock Exchange. As of Wednesday's close, the stock was trading at a forward price-to-earnings multiple of 10.78, compared with the peer group average of 18.27.

Weight Watchers rival Nutrisystem trades at a multiple of 20.94.

© 2024 Thomson/Reuters. All rights reserved.


InvestingAnalysis
Weight Watchers International Inc.forecast a full-year adjusted profit far below estimates, sending the company's shares down 20 percent in extended trading Thursday. Weight Watchers, which also announced plans to resize, said it expects to earn $1.30 to $1.60 per share...
Weight,Watchers,Stock,Forecast
244
2014-32-13
Thursday, 13 February 2014 05:32 PM
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