Denver, CO, 02/14/2014, (Avauncer.com) - Weight Watchers International, Inc. (NYSE:WTW) saw its fourth quarter profit plummet by 47%, something that will not go well with shareholders especially after receiving the wrath of Wall Street. Immediately after posting the below par results for the fourth quarter, the company stock dropped by 18%.
Weight Watchers which provides weight management services to its global branded consumers faced increased competition in the fourth quarter from diet apps thatare becoming the hit of the market with massive use of smartphones in the world. Hard times could be seen ahead for the company, as it has already planned resizing measuresin a bid of reducing its costs of operation.
Weight Watchers International, Inc. (NYSE:WTW) in its outlook for 2014 expects earnings per share of between $1.30 and $1.60 for the full year. This is a low outlook when compared to analyst estimates of $2.78 per share. The chief executive officer Jim Chambers was not buoyed by the fourth quarter results and admits challenging times ahead, unless something is done.
Weight Watchers plans to reorganize its business in the current quarter as it strives to achieve a turnaround in the not so good results that were registered in 2013.
Weight Watchers financial outlook
Weight Watchers International, Inc. (NYSE:WTW) profit dropped by 47%, from a high of $58 million recorded in 2012 to lows of$30.8 million in the fourth quarter. The profit recorded in the fourth quarter is inclusive offourcents a share related to the sudden closureof its business in China. Weight Watchers is currently considering various strategies it can use to stop massive declines it is experiencing in its customer front.
These strategies include offering more user friendly and personalized weight loss programs as well as doing more in trying to court corporations as well as health insurance providers in an effort of trying to subsidize membership.
The fourth quarter saw the company net income fall by 7 cents to come in at 54cents, total revenue in the quarter also dropped by 11% to come in at $366.1 million. Despite the 11% drop in the quarter’s revenue, it was still $8 million above consensus estimates Weight Watchers International, Inc. (NYSE:WTW) consumer paid weeks for the fourth quarter dropped by 8.5% with online paid weeks also dropping by 6.5% when compared with the same quarter a year ago.