Weight Watchers Rally Extended Thanks to Higher Forecast

Shares of Weight Watchers surged by up to 16% in late Monday trading after the weight-loss company beat estimates for the quarter and raised its forecast for the full-year.

Weight Watchers continued adding new subscribers, which is one more sign that investments in technology and its marketing campaign have been paying off. Important to its effort is Oprah Winfrey, who sits on the board, and acquired a stake in the weight loss company in 2015 and agreed to be the face of the program.

CEO Mindy Grossman said that the quarter showed strong growth as the team has been successful in focusing on quality of numbers. Winfrey will appear once again in advertisements during the company’s all important winter season, said Grossman in her prepared statement.

The steep increase in stock price during extended trading sent shares up to a high of $51.98. Even prior to the surge in price, shares in the weight loss company had increased close to fourfold during 2017 to Friday’s close of $44.80.

For its third quarter, earning per share reached 65 cents, beating the estimated 51 cents per share on Wall Street. Weight Watchers is now expecting profit for the full year to be as high as $1.83 per share, which is up from its previous forecast’s high end of $1.67.

Grossman, who is 60, took the reins of the company this past July after she had run HSN Inc., the shopping network for years. She inherited a company that was trying to rebound after suffering declines in customers and stock prices for years.

In 2015, the stock rallied when Winfrey acquired a stake of 10% in the weight-loss company and entered into an agreement to push the brand. But, the rally did not last long. However, in 2017 shares have roared back to the levels seen during the 2015 rally.

A new and updated diet program as well as a better platform online has helped to contribute to the growth of the company. Weight Watchers also revamped its meetings that have long served as an important part of the system that is now five decades old.

CFO at Weight Watchers Nick Hotchkin through a prepared statement said that the company was confident in the momentum of its business and believes that it will continue for at least the remainder of 2017.

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