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Weight Watchers stock soars on membership gains

Oprah Winfrey
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Oprah Winfrey

Shares of Weight Watchers gained as much as 14 percent in early trading Thursday after the company reported lower-than-expected quarterly losses and the first membership uptick in four years.

The stock closed up about 3 percent after losing some of its earlier gains.

Membership grew for the first time since 2012, up 4.8 percent from the previous year, the company said Wednesday. The number of Weight Watchers members reached 3.1 million, with 11.2 percent growth in North America. Offset by membership declines in Europe, global subscribers were up 7.6 percent. Total attendance at meetings also jumped 18 percent year-over-year.

Weight Watchers also raised its full-year earnings guidance to between 80 cents and $1.05.

"Our first quarter loss was smaller than we expected, and for the first time since 2012 we grew our total subscribers year-over-year, clearly demonstrating that our business is turning around," Jim Chambers, Weight Watchers' president and CEO, said in a statement Wednesday.

Source: FactSet

However, shares have shaved off 55 percent of their value since billionaire Oprah Winfrey's partnership with the weight-loss company. The stock is down more than 37 percent this year, adding to concern about Oprah's lasting influence on the stock price after her high-profile investment last year.

But the media-mogul's sway was clear in January. Winfrey tweeted that she lost 26 pounds while eating bread every day, leaving her wallet significantly fatter that day.


The stock jumped more than 16 percent after the tweet, earning Winfrey a reported $12.5 million. Including stock options, Winfrey raked in almost $20 million dollars.

Winfrey announced her partnership with Weight Watchers in October of 2015, more than doubling the stock price, sending it from around $7 to $19 the following Monday. She announced a 10 percent stake in the company with an option to buy 5 percent more, and is a member of board of directors.