Nutrisystem Plunges After-Hours (NTRI)

Shares of Nutrisystem Inc.

are plunging in the after-hours trade following the company's Q4 earnings release; shares are off over 31%, trading at $13.80. They closed the regular session higher by 1.51%, trading at $20.20. Nutrisystem reported Q4 EPS of $0.25 on revenues of $87.9 million; revenues declined 16.7% year over year. This compares to the Street's expectations of $0.25 per share on revenues of $100.6 million. The company also issued guidance for Q1, saying that it sees negative EPS of $0.30-0.35, due to charges. For fiscal year 2011, it sees EPS of $0.40-0.50, whereas the Street was looking for $1.32 per share. Joe Redling, Chairman and Chief Executive Officer said, "2010 was a challenging year, with two very different stories. We enjoyed strong sequential revenue and new customer trends in the first half, followed by softening customer demand and deteriorating year-over-year comparisons in the second half.” He added, “As we moved into 2011, a major new product launch in the commercial diet industry impacted our January sales. We reacted quickly and our price rollback promotion had an immediate positive impact on customer starts, but at the expense of gross margin. To preserve profitability and cash flow, we are taking the immediate hard action needed to further reduce costs. Longer term, it is clear that we need new product offerings and new sales channels to re-energize top-line growth going forward, and to that end we plan to invest in new product development efforts in 2011." Nutrisystem, Inc. is a provider of a weight management system based on a low-calorie, portion-controlled, prepared meal program. The customers purchase monthly food packages containing a 28-day supply of breakfasts, lunches, dinners and desserts, which they supplement with fresh dairy, fruit, salad, vegetables and low-glycemic carbohydrate items.