Weight Watchers issues weak forecast, shares fall

Weight Watchers shares tumble after hours on weak enrollment, disappointing forecast

Associated Press

NEW YORK (AP) -- Weight Watchers International Inc. warned investors Wednesday that fewer people are signing up for its weight loss programs in 2013 than anticipated. It forecast full-year earnings well below market expectations and its shares fell 14 percent in after-hours trading.

The New York-based company reported that it earned $58 million, or $1.03 per share, for the fiscal fourth quarter that ended on Dec. 29. That's compared with $63.7 million, or 86 cents per share, earned in the same quarter of the prior year. While net income fell in the most recent quarter, earnings per share were higher because a tender offer and share repurchases by the company reduced the number of shares outstanding by over 30 percent.

After adjusting for several special items, Weight Watchers said it earned 96 cents per share in the most recent period.

Its revenue increased nearly 2 percent to $407.9 million from $401.3 million. The company reported gains in its online business and declining attendance at the in-person meetings it was once known for.

Weight Watchers beat the forecasts for an adjusted 87 cents per share on revenue that $396.9 million that analysts polled by FactSet had anticipated for the period.

While the company beat forecasts for its fourth quarter, its outlook was not as bright.

CEO David Kirchhoff said that Weight Watchers' marketing has not been as effective as the company had hoped for, citing a tough economy and stiffer competition. He said the company has been disappointed by its recruitment trends thus far in 2013.

The company forecast earnings of $3.50 to $4 per share for the year. Analysts were forecasting earnings of $4.74 per share.

Shares fell $7.85 to $46.26 in after-hours trading following the earnings report. Its stock had added 17 cents to close regular trading at $54.11.

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