Weight Watchers Sinks After Hours; Q2 Net Off 18%
Weight Watchers International (NYSE: WTW) shares trended down sharply in the after-hours session after posting sizable declines in both second-quarter profits and revenue.
Despite this, the company beat top-line expectations and raised its outlook to above Street views.
Chief Executive James Chambers acknowledged the downturn but said the company's "transformation plans remain on track."
Revenue fell nearly 17 percent mainly on weak results in North America. Total paid weeks for the weight-loss program fell more than 14 percent, driven by lower subscriber bases and weaker recruitment, the company said.
North American revenue plunged about 20 percent to $209.1 million; U.K. revenue fell 12 percent adjusted for currency to $31 million while continental Europe fell an adjusted 0.4 percent to $65.7 million.
Weight Watchers net earnings declined nearly 18 percent to $54 million or $0.95 cents a share, from year-earlier profit of $64.9 million or $1.15 a share. Revenue dropped to $397.5 million, from $470.9 million.
Wall Street expected earnings of $0.77 a share on revenue of $387.7 million.
After hours, Weight Watchers changed hands recently at $21.01, down 3.6 percent.
The company raised its fiscal 2014 earnings outlook to between $1.65 and $1.85 a share, from its previous forecast of $1.45 to $1.70. Wall Street expects 2014 earnings of $1.63 a share.
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