Weight Watchers 3Q beats expectations
NEW YORK (AP) — Weight Watchers International Inc.’s shares jumped in after-hours trading Monday after the company reported that third-quarter earnings fell but still easily topped expectations.
The company is increasingly seeing its business shift from in-person meetings where members weigh in publicly and get tips on weight loss to an online service and forum.
Weight Watchers said that it earned $67.4 million, or $1.20 per share, for the period that ended Sept. 29, versus $80.7 million, or $1.09 per share, in the third quarter of last year. The company’s total revenue was nearly flat at $430.6 million versus $428.4 million. Online business improved — with the number of active online subscribers up nearly 20 percent to 2.05 million — but that was offset by pressure on its meetings business in North America and the U.K.
Higher costs for marketing, interest and selling, general and administrative expenses crimped profits in the latest period.
But results still beat analysts’ expectations for profit of $1.05 per share on revenue of $422.8 million, according to FactSet.
Shares of the company jumped $5.08, or nearly 11 percent, to $52.56 in after-hours trading. Its stock had fallen 35 cents to close regular trading at $47.48.
Weight Watchers said that Superstorm Sandy and recent investments to help promote its business ahead of the key New Year’s weight loss season would impact its fourth quarter. The company cut the top end of its 2012 earnings guidance range to $4.10 per share, versus a prior range of $4 to $4.20 per share.
Analysts, on average, are expecting earnings of $4.11 per share for the year.