Weight Watchers pops on earnings beat, raised guidance

Oprah Winfrey
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Weight Watchers reported quarterly results Thursday that beat analysts' expectations. Its shares popped on the news, as the company aims to become the next turnaround story success.

The diet brand benefited from its partnership with media star Oprah Winfrey, announced in mid-October.

"In December, we will be launching a comprehensive program innovation as we expand our purpose from weight loss alone to more broadly helping people lead healthier, happier lives," CEO Jim Chambers said in a statement. "The response to our groundbreaking partnership with Oprah Winfrey has been terrific. I am thrilled about the impact it will have on accelerating our transformation."

Weight Watchers posted third-quarter earnings per share of 39 cents on $273 million in revenue. Wall Street had expected profit per share of 29 cents on $266 million in revenue, according to consensus estimates from Thomson Reuters.

The company's shares surged more than 17 percent in extended trade.

Oprah Winfrey
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Weight Watchers also raised its full-year earnings guidance to between 64 cents and 74 cents per fully diluted share on an adjusted basis, from between 57 cents and 72 cents a share.

Although revenue beat forecasts, it was still down 20.8 percent from the year-earlier period.

Shares of Weight Watchers when media mogul Winfrey announced she would take a 10 percent stake in the struggling company, worth $43.2 million.

Winfrey plans to publicly document her experiences on the program and appear in advertisements. She will also join Weight Watchers' board of directors.

On the conference call, Chambers said the company is proud to partner with Winfrey. As part of that partnership, she will share her personal experiences with members and will offer executive insight as a board member.

"This is a long-term strategic partnership," he said. Winfrey will be a part of the company's upcoming winter season marketing initiative.

Weight Watchers soars after Oprah buys in
Weight Watchers soars after Oprah buys in

The Weight Watchers website has seen increased visitors after the news, Chambers added.

The company has suffered from a shift in what U.S. consumers consider to be healthy, as shoppers increasingly choose natural foods over diet programs. Consumers' embrace of calorie-counting apps on mobile phones, and the popularity of wearable fitness trackers, have also made it hard for Weight Watchers to stand out, particularly among younger people, analysts said.

Before Winfrey's announcement, stock was down nearly 68 percent from the start of the year.

— Reuters contributed to this story.