Weight Watchers Disappoints Investors With Results, Guidance

Investors are not happy with Weight Watchers International Inc. (NASDAQ: WTW) after the company posted disappointing results for the fourth quarter. The company reported adjusted fourth-quarter earnings of 46 cents per share. That was far below the 60 cents per share expected by Wall Street analysts. Weight Watchers reported revenue of $330 million for the quarter, far less than the $347 million analysts expected. The company reported full-year 2018 revenue of $1.5 billion.

The company also gave a weak outlook for 2019. For 2019, Weight Watchers said it expects to generate about $1.4 billion in revenue in the coming year, lower than the $1.66 billion in sales analysts had been predicting. Adjusted earnings are expected to fall in the range of $1.25 to $1.50 per share for the full year, considerably below analysts’ predictions of $3.36 per share in earnings. New member recruitment for 2019 is expected to fall below what was accomplished in 2018.

Investors reacted to the news negatively. After the earnings release, shares of the company fell 30 percent. Its shares had fallen more than 58 percent over the last 12 months before the news.

Weight Watchers has been struggling with trying to turn into a wellness company instead of just a diet brand. Last year, the company decided to rebrand itself as WW and drop the word “weight” from its name in order to appeal to younger consumers. Studies have shown that younger consumers are more focused on eating healthy and being more mindful about what they consume than counting calories and adhering to restrictive diets.

In its plans for the future, the company will be showcasing Oprah Winfrey, its spokeswoman, investor and board member, in a central role in its new spring television and digital marketing campaign. The company is also planning to increase its focus on wellness and health. CEO Mindy Grossman said in a statement, “While we are disappointed with our start to 2019, we are confident that our strategy to focus on providing holistic wellness solutions leveraging our best-in-class weight management program is the right path to support long-term sustainable growth.”

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