Weight Watchers Falls After Cutting Annual Forecast
Weight Watchers International Inc. (WTW) plunged the most in almost three months after the provider of dieting services cut its annual earnings forecast, citing slower enrollment.
The stock tumbled 13 percent to $42.66 at the close in New York, for the biggest decline since May 3. Through yesterday, the shares had fallen 11 percent this year.
Weight Watchers, which is working with brand ambassador Jessica Simpson, said it doesn’t expect her role as spokeswoman to be enough to offset an anticipated weakening of enrollment trends at meetings. Slower business in June and July, hurt by economic uncertainty, is likely to continue in the second half of 2012, Chief Executive Officer David Kirchhoff said.
“We are now operating under the assumption that enrollment trends for the remainder of the year will be worse than we had originally forecasted,” Kirchhoff said yesterday on a conference call, after the company cut its forecast. “While we originally expected second-half attendances to be roughly flat to prior and for paid weeks to grow modestly, we’re now forecasting high-single digit declines in attendances and paid weeks,”
Full-year earnings per share will be $4 to $4.20 per share, compared to a prior forecast of $4.60 to $4.80, the New York- based company said in a statement yesterday. That compared to an average analyst estimate of $4.60, according to data compiled by Bloomberg.
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