Weight Watchers share price soars 40% on positive outlook

Last week, the weight loss and health services company saw its stock soar more than 40% after recording a surge in subscription growth, driven by celebrity endorsements and expansion into new markets.

Weight Watchers Source: Bloomberg

Last week, Weight Watchers reported a strong set of second-quarter (Q2) results that not only saw it beat analysts’ expectations but allowed the business to upgrade its full-year guidance.

Over the course of last week, the company’s stock climbed as much as 49% to $31.44 a share, with it closing 8% down on Monday to $28.65.

Weight Watchers beats analysts’ expectations

Weight Watchers beat estimates in its Q2 results, with the company posting earnings per share (EPS) of 78 cents a share, compared to the 64 cents predicted by forecasters, according to analysts surveyed by Bloomberg.

Its results allowed the company to raise its full-year earnings guidance to between $1.55 and $1.70 a share, up from the $1.52 analysts had previously forecast.

However, the weight loss company fell short of the market in terms of revenue, with the business generating $369 million as opposed to the $376.1 million forecast by analysts.

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Subscription growth fuels share price gains

The company’s earnings and share price benefited from strong subscription growth over its first six months of trading, driven by celebrity partnerships and ad campaigns involving Oprah Winfrey, Kate Hudson and Robbie Williams.

In fact, Weight Watchers ended the second quarter with 4.6 million subscribers, representing a 1.5% increase over the same period a year ago and the highest level the company has ever recorded in its second quarter of trading.

‘We are focused on building momentum and look forward to launching our new program innovation later this year, which we believe will accelerate subscriber growth in 2020,’ Weight Watchers CEO Mindy Grossman said.

‘We are still early in our journey as a global holistic wellness company with the best-in-class weight management program, and we see tremendous opportunities ahead to drive growth in 2020 as well as over the long-term,’ she added.


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