Tags: Weight Watchers | Oprah Winfrey | diet | Nutrisystem

Weight Watchers Surges as Oprah Ads Attract Dieters to Programs

Weight Watchers Surges as Oprah Ads Attract Dieters to Programs

 Oprah Winfrey (Dreamstime)

Wednesday, 01 March 2017 11:51 AM

Weight Watchers International Inc., the diet company backed by Oprah Winfrey, surged on Wednesday after the company issued a better-than-expected profit forecast for 2017 and added subscribers for the fourth consecutive quarter.

The shares jumped as much as 28 percent to $18.49 in New York, the biggest intraday gain since November 2015. The stock had already gained 26 percent this year through the close of trading Tuesday.

Weight Watchers had struggled before announcing in 2015 that Winfrey purchased a stake in the company and agreed to act as a spokeswoman for the brand. Since then, the media magnate has buoyed the company’s volatile stock by discussing her weight loss on the program in tweets and television ads.

While Weight Watchers had almost $2 billion of debt at the end of last year and the stock is heavily shorted, the Winfrey-driven marketing push has drawn new subscribers to its programs. Last year was the first time since 2011 that the company added new members over the course of a year, said Chief Financial Officer Nicholas Hotchkin.

“It’s a combination of people responding well to the strategy and some really good marketing execution,” he said in an interview. “It’s really starting to fuel the financial results.”

Weight Watchers expects to post profit of as much of $1.40 a share in 2017, while analysts had estimated $1.17. Despite the Oprah optimism, Weight Watchers faces an uphill battle. The company, hit hard by the rise of fitness apps, has seen its stock drop in each of the past five years, with a 50 percent decline in 2016. So far, Winfrey has only managed to boost the shares on a temporary basis.

Nutrisystem Inc. also posted positive results this week, with fourth-quarter sales and earnings topping estimates. The period after the winter holidays, when many consumers make resolutions to lose weight, is key for diet companies.

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Weight Watchers International Inc., the diet company backed by Oprah Winfrey, surged on Wednesday after the company issued a better-than-expected profit forecast for 2017 and added subscribers for the fourth consecutive quarter.
Weight Watchers, Oprah Winfrey, diet, Nutrisystem
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2017-51-01
Wednesday, 01 March 2017 11:51 AM
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