Weight Watchers Becomes Trimmer, Happier Company

Jacob Harper  |

Dieting company Weight Watchers International (WTW) saw its stock rise as much as 27 percent on May 1 trading after the company reported they were expecting to gorge on profits in the coming year. Shareholders applauded the company, who worked so hard to “transform,” as CEO Jim Chambers put it, into a slimmer, more efficient, and ultimately healthier retail business.

Weight Watchers really shed the revenues, reporting a 16.9 percent drop in sales year-over-year. The company added a slimmer earnings profile to the mix, reporting that comparable quarter profits were down a whopping 50 percent. However, Weight Watchers is always one to keep an eye on the future, setting optimistic goals to motivate them to be the weight loss company they know they can be. And if they stick to the program, it looks like they’ll do exactly that.     

Trade Commission-FREE with Tradier Brokerage

The company hit a milestone with their first quarter earnings report, raising their target EPS from $1.45 to $1.70, a significant improvement over the $1.30 to $1.60 goal they had previously set for themselves. While Weight Watcher’s North American sales declined like the caloric intake of a person subsisting on their dinners, the company remains profitable and expects those profits to increase in the coming year. They plan to achieve this through an ongoing restructuring program that minimizes expenditures and strengthens their core business, and shareholders couldn’t be more proud of the work they’ve done.

Becoming a healthier company isn’t always an easy task, and it’s unreasonable to expect for the changes to happen overnight. It takes a lot of hard work and perseverance. But after reigning in the spending, Weight Watchers debuted their new look to the market’s wild enthusiasm.

It’s hard to effect change alone. It takes a village, as they say. Or in Weight Watcher’s case, increased equity in their Brazilian partnership which grew their total equity stake in that market to 80 percent, resulting in a net gain of $10.5 million for the quarter.  

But that certainly does not take away from what Weight Watchers has accomplished. Though they had an ugly 2014, watching their share’s losses balloon to 40 percent on the year, they’re fighting back, and should be proud of all they’ve accomplished.

At 2 PM EST Weight Watcher’s stock came in at $23.64 a share, up 19.39 percent for the day. Weight Watchers has previously been "watched" by Equities.com as a potential turnaorund candidate.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


Symbol Last Price Change % Change