Weight Watchers International Inc. (WTW), the weight-control program provider endorsed by celebrities Jennifer Hudson and Jessica Simpson, fell the most since its market debut after saying profit this year will be less than previously forecast as it struggles to recruit members.
Weight Watchers fell 19 percent to $37.99 at the close in New York, the biggest drop since the company went public in November 2001. The shares have retreated 27 percent this year, compared with a 20 percent gain for the Standard & Poor’s 500 Index.
Per-share profit this year will be $3.55 to $3.70, less than an earlier projection of $3.60 to $3.90, the New York-based company said yesterday in a statement. The average estimate of seven analysts surveyed by Bloomberg was $3.70.
The revision reflects “continued softness in the meetings business and slowing growth online,” Robert L. Craig, an analyst at Stifel Financial Corp., said in a note to clients today. Second-quarter sales fell 4.1 percent to $465.1 million as North American meeting revenue slid 7.4 percent.
Separately, the company said David Kirchhoff resigned as chief executive officer and from the board effective July 30 to pursue other opportunities. He was replaced by Jim Chambers, who previously was chief operating officer.
“Current business conditions are challenging,” Chambers said in the statement. “The 2013 recruitment weakness means that we’ll start off 2014 with fewer active members and therefore a lower earnings base.”
Second-quarter profit excluding some items was $1.39 a share, topping analysts’ $1.11 average estimate. Net income fell 16 percent to $64.9 million, or $1.15 a share, the company said.
To contact the reporter on this story: Lauren S. Murphy in Toronto at firstname.lastname@example.org
To contact the editor responsible for this story: Robin Ajello at email@example.com