Weight Watchers (WTW) Stock Gains Following Earnings

Weight Watchers International, Inc. (NYSE: WTW)

Weight Watchers is having a strong day in the market today, and for good reason. The company reported earnings for the first quarter, beating expectations and boosting its guidance. Today, we’ll talk about the details of the report, how investors reacted to the news, and what we can expect to see from WTW moving forward. So, let’s get right to it!

WTW Reports Strong Earnings & Guidance

As mentioned above, Weight Watchers is having a strong day in the market today after reporting earnings from the first quarter. Here’s what we saw from the report…

  • Earnings – In terms of earnings, WTW produced positive results overall, even though a loss was realized. In the first quarter, it was expected that the company would report a loss of $0.18 per share. However, the company actually reported a loss of $0.17 per share, $0.01 narrower than analysts expected to see.
  • Revenue – While earnings came in slightly ahead of expectations, revenue came in below expectations. During the first quarter, analysts expected that WTW would generate revenue in the amount of $308.9 million. However, the company missed expectations; reporting revenue in the amount of $306.9 million.
  • Guidance – Up to this point, earnings and revenue were a wash. However, there was one aspect of the report that really excited investors. That is guidance. For the full year, analysts are expecting for the company to generate earnings in the amount of $0.87 per share. However, Weight Watchers announced that is it expecting to generate earnings in the range between $0.80 per share and $1.05 per share, causing quite a bit of investor excitement.

As you can see from the information above, the earnings report from WTW was positive overall. In a statement, Jim Chambers, the CEO of the company had the following to offer with regard to the results…

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…”

How The Market Reacted To The News

As investors, one of the first things that we learn is that when the news is released, we can expect to see movement in the market. Positive news surrounding a publicly traded company will lead to gains in the value of the stock associated with that company while negative news will generally lead to declines. When it comes to WTW, the news that was released today was overwhelmingly positive. As a result, we’re seeing strong movement in the market surrounding the stock. Currently (11:24), the stock is trading at $13.05 per share after a gain of $0.53 per share or 4.23%.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion with regard to what we can expect to see from Weight Watchers. While the company has struggled in the past, it’s clear that Oprah Winfrey’s involvement in the company is doing positive things overall. For the first time in years, WTW realized year-over-year user growth, which is incredible. Not to mention, revenue guidance came in well ahead of expectations. All in all, signs seem to be pointing toward growth on this one!

What Do You Think?

Where do you think WTW is headed moving forward and why? Let us know your opinion in the comments below!