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Weight Watchers Surges as Oprah Ads Help Retain Subscribers

Weight Watchers Surges as Oprah Ads Help Retain Subscribers

(Bloomberg) -- Weight Watchers International Inc. jumped in late trading after the weight-loss company raised its full-year profit forecast, suggesting its move to highlight Oprah Winfrey again in its advertising is paying off.

  • The number of subscribers rose 1.5% to 4.6 million from a year earlier, the highest level for a second quarter, the company said Tuesday, even as it held steady from the first quarter. Profit of 78 cents a share topped the average estimate of 65 cents.

Key Insights

  • Weight Watchers, now known as WW, has rebounded after a poor start to the year, when many dieters turn to weight-loss programs. The company’s struggles to add new customers forced it at the time to issue a weak profit forecast for the year, which battered the shares, but it’s moving past that: Now the company expects full-year profit per share of $1.55 to $1.70. That’s up from its prior outlook of as much as $1.55.
  • Weight Watchers has put Winfrey, a top shareholder and brand ambassador, back in the middle of its advertising push as it seeks to add subscribers. It’s working: The company said it saw a “good response” to its spring ad campaigns.
  • CEO Mindy Grossman told Bloomberg in an interview that the second quarter often brings a dip in subscribers after diet season ends but that didn’t happen this year, marking an important win.
  • The company has been improving its technology and trying to lure more digital customers as it faces pressure from free fitness apps and diet regimens that are popular online.
Weight Watchers Surges as Oprah Ads Help Retain Subscribers

Market Reaction

  • The shares advanced as much as 14% to $24 at 4:14 p.m. in late trading. The stock had lost nearly half its value this year through Tuesday’s close.

Get More

  • For more on the results, click here.
  • For the company statement, click here.

To contact the reporter on this story: Craig Giammona in New York at cgiammona@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Lisa Wolfson

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