Weight Watchers Rallies By 15 Percent After Better-Than-Expected Q1 Report

Weight Watchers
Weight Watchers logo in Waterbury, CT (Photo: Mike Mozart / Flickr.com)

Following its latest earnings report, which revealed better-than-expected figures, Weight Watchers stock prices jumped by as much as 15 percent after the markets closed Wednesday. The health products and services firm's relatively good first quarter results also boosted its forecast for the upcoming quarters for 2019.

Weight Watchers increased its full-year earnings forecast to a range of US$1.35 and US$1.55 per share. This was a marginal increase from its previous forecasted range of US$1.25 and US$1.50. The companies expect their revenues for the year to reach US$1.4 billion. Despite the recent surge in its stock prices, overall shares of the firm have dropped by nearly 48 percent since the start of the year.

Investor confidence was boosted by the company's reduction in losses for the quarter. The previous forecast for its loss for the quarter was pegged at 26 cents, but the company reported a loss of only 16 cents. Meanwhile, Weight Watchers reported revenues of US$363.2 million, which was around the same area as the initial analyst forecast of US$365.9 million.

Over the past few years, Weight Watchers has been trying to transition into a health and wellness brand as opposed to being a diet-focused firm. In line with its goal, the company overhauled its marketing and branding, calling itself WW as of last year. Unfortunately, the company's efforts fell flat with its consumers as it failed to immediately jump into the keto diet trend last year.

Earlier in the year, Weight Watchers reported slowed growth in its recruitment of new members. The report immediately sent the company's stocks downward. The company then announced that it would be changing its tactics this time around, leaning more on its iconic weight loss products and services and on the marketing efforts of one of its board members, Oprah Winfrey.

The company made good with its word and released a new television advertisement that featured Oprah front and center. Oprah promoted the company's new app, which was heavily pushing to members. Around a third of the company's 4.6 million members are digital-only members. 

The firm also launched its spring campaign, which also featured Oprah as its central figure. According to the company's CEO Mindy Grossman, the company will still be sticking to its previous rebranding. The firm apparently spent a lot of time and money in coming up with its rebranding program. Grossman explained that it just needed to clearly explain to its clients the concept of the new brand, which it has announced to be both "WW - Weight Watchers Reimagined" and "WW - The New Weight Watchers."

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