14.02.2014 02:44:37
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Weight Watchers Shares Tumble On Weak Q4 Profit, 2014 Outlook
(RTTNews) - Shares of Weight Watchers International, Inc. (WTW) tumbled more than 20 percent in extended trades Thursday after the weight management services provider reported a 47 percent decline in profit for the fourth quarter, reflecting lower revenues and a year-ago one-time benefit.
Earnings per share for the quarter missed analysts' estimates. Looking ahead, the company forecast earnings for fiscal 2014 below Street expectations, saying that it will be a challenging year.
The New York-based company reported fourth-quarter net income of $30.8 million or $0.54 per share, down from $58.0 million or $1.03 per share in the prior-year period. In the prior-year quarter, the company recognized a net benefit of $0.07 per share from an accrual reversal associated with the settlement of a UK self-employment tax litigation.
Adjusted net income for the quarter was $30.8 million or $0.54 per share, compared to $53.9 million or $0.96 per share in the year-ago quarter. On average, eight analysts polled by Thomson Reuters expected the company to earn $0.61 per share for the quarter. Analysts' estimate typically exclude special items.
Revenues for the quarter declined 11 percent to $366.1 million from $411.1 million in the prior-year period. Analysts had a consensus revenue estimate of $357.98 million.
The company's total paid weeks or global engagement, decreased 8.5 percent over last year, with meeting paid weeks declining 10.9 percent. Online paid weeks were down 6.5 percent. Total attendance also dropped 13.5 percent from last year.
The decline in total paid weeks and online paid weeks were driven by the lower active base at the start of the quarter and lower recruitments in both of the company's businesses versus the prior year period.
Internet revenues at WeightWatchers.com decreased 5.2 percent, or 5.3 percent on a constant currency basis, while online paid weeks declined 6.5 percent and active online subscribers were down 6.7 percent.
Meeting revenues for the North American meetings business or NACO were down 15.4 percent or 15.0 percent on a constant currency basis, driven by lower enrollment volumes. Meeting paid weeks and attendance decreased 10.8 percent and 13.1 percent, respectively.
International meeting revenues decreased 9.9 percent or 11.4 percent on a constant currency basis, primarily driven by lower revenues in the UK.
For fiscal 2014, Weight Watchers reported net income of $204.7 million or $3.63 per share, down from $257.4 million or $4.23 per share in the previous year. Adjusted earnings for the year were $3.87 per share, compared to $4.16 per share last year.
Net revenues for the year declined 7 percent to $1.72 billion from $1.84 billion in the prior year.
Street expected the company to earn $3.94 per share for the year on revenues of $1.71 billion.
Looking ahead, Weight Watchers said that during the first quarter of 2014, it intends to finalize plans to resize its organization.
For fiscal 2014, Weight Watchers forecasts earnings in a range of $1.30 to $1.60 per share. Analysts expect the company to report earnings of $2.78 per share for the year.
The guidance incorporates the fact that fiscal 2014 includes a 53rd week, which bridges the last week of December 2014 and the first week of January 2015 and has an expected negative $0.04 impact on full-year earnings per share.
WTW closed Thursday's regular trading session at $30.58, up $0.90 or 3.03 percent on a volume of 1.83 million shares. However, in after-hours, the stock declined $6.18 or 20.21 percent to $24.40.
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