Weight Watchers International (WTW - Free Report) soared 25% in morning trading on Friday after the diet company reported better-than-expected second quarter fiscal 2017 results.
The company reported earnings of $0.67 per share, beating our consensus estimate of $0.50 per share. Weight Watchers also reported revenue of $341.7 million, representing an increase of 12% year-over-year.
Subscribers to the company’s program rose 20% year-over-year to 3.5 million. Total paid weeks also rose, with meeting paid weeks increasing 9.7% and online paid weeks increasing 22.6% year-over-year.
CEO Mindy Grossman attributes Weight Watchers’ collaboration with Oprah Winfrey as a major factor in the company’s growth. In Thursday’s earnings conference call, Grossman said, “Winfrey has certainly accelerated the company’s progress since October 2015 with high awareness of her success and happiness with the program sparking interest and excitement.”
Winfrey bought a 10% stake of Weight Watchers in 2015. Since then, the stock has gone from $6 per share to closing at $33.08 on Thursday. “I’m personally looking forward to partnering with her as we transform the brand and business,” Grossman said
WTW remains a Zacks Rank #3 (Hold), with a VGM score of ‘A.’ The company raised its 2017 guidance to a range of $1.57 to $1.67 from the prior guidance of $1.40 to $1.50.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>