Weight Watchers Experiences the Winfrey Effect


Shares of Weight Watchers were climbing more than 15 percent in premarket trading Friday, after the New York-based company reported earnings that topped Wall Street expectations and raised its outlook for the full year.

Ever since Winfrey associated herself with the brand back in 2015, Weight Watchers has been going up and up, following years of declines.

"There's no doubt that the Weight Watchers' long-term collaboration with Oprah Winfrey has certainly accelerated the company's progress since October 2015 with high awareness of her success and happiness with the program sparking interest and excitement," CEO Mindy Grossman said on Thursday's earnings conference call.

"I'm personally looking forward to partnering with her as we transform the brand and business."

The diet program's subscribers climbed 20 percent in the second quarter, helping drive sales 12 percent higher, to $342 million, from a year ago.

Earnings came in at 67 cents per share, adjusted, topping analysts' estimates of 51 cents, according to Thomson Reuters. And Weight Watchers now anticipates earnings per share to fall within $1.57 to $1.67 for the full year, "reflecting continued momentum."


Grossman just began leading the company in July, coming over from an 11-year stint at shopping network HSN. On Thursday, she told analysts and investors that more and more of Weight Watchers' customers are viewing the company as a "lifestyle-oriented, more modern and relevant brand."

Notably, Grossman has experience working with other big-name brands Nike, Ralph Lauren and Tommy Hilfiger.

Now Weight Watchers' biggest cheerleader, Winfrey bought a 10 percent stake in the diet company back in 2015, when the stock was trading around $6 apiece. Shares closed Thursday at $33.08.

As of Thursday's close, shares of Weight Watchers have climbed a whopping 189 percent since the start of the year. The stock is up about 51 percent over the past three months.

On Thursday, Grossman said the company's better performance of late has been fueled by improved digital offerings and freshening the Weight Watchers meetings experience. CFO Nicholas Hotchkin added that the business is focused on growing both its online and meetings segments in coming quarters.

"Based on our business momentum, we now expect full-year 2017 revenue to approach $1.3 billion, a double-digit increase over the prior year, reflecting improvements in all geographic markets versus our prior expectations," Hotchkin said Thursday.

With Winfrey still on board and boasting her more-than-40-pound weight loss via Weight Watchers on TV advertisements, the diet program doesn't show signs of slowing down anytime soon.

Original article: www.cnbc.com

Written by: Lauren Thomas

InsightsShana Grossman