Photographer: Michael Nagle/Bloomberg

Nutrisystem, Weight Watchers Rally as Dieters Flock to Programs

Updated on
  • Nutrisystem 2017 profit, sales forecasts top projections
  • Oprah Winfrey helps Weight Watchers post subscriber gains

Diet season is looking very good for Nutrisystem Inc. and Weight Watchers International Inc.

Shares of the two companies surged Tuesday after Nutrisystem’s earnings forecast topped analysts’ projections and subscribers grew for the fourth straight quarter at Weight Watchers, a program backed by Oprah Winfrey.

The period following the holiday season is pivotal for the companies because that’s when dieters often make resolutions to lose weight.

Nutrisystem, which also posted fourth-quarter profit and sales that beat predictions, rallied 19 percent to $46.50 in New York, the biggest one-day gain since July 2015.

The company “delivered a strong fourth quarter, exceeding our estimate on every metric,” Mitchell Pinheiro, an analyst at Wunderlich Securities who has a buy rating on the stock, said in a research note.

Shares of Weight Watchers climbed 9.9 percent to $14.39 percent in New York. The rally followed an 8.1 percent gain Monday after a report from M Science said the company has had success pulling in new customers. The two-day gain was the biggest in more than a year for the company.

Oprah Effect

Weight Watchers jumped again in late trading after the company released fourth-quarter earnings, climbing 8.4 percent to $15.60. The company issued a better-than-expected profit forecast for 2017 and said it added subscribers in the fourth quarter. Weight Watchers was struggling before announcing in 2015 that Winfrey was buying a stake and had agreed to act as a spokeswoman for the brand.

Last year was the first time since 2011 that the company added new members over the course of a year, buoyed by its close relationship with Winfrey, said Nicholas Hotchkin, Weight Watchers’ chief financial officer.

“It’s a combination of people responding well to the strategy and some really good marketing execution,” he said in an interview. “It’s really starting to fuel the financial results.”