Weight Watchers International Q4 Earnings Report: Share Weight Gain?

The Q4 2016 earnings report for small cap dieting stock Weight Watchers International, Inc (NYSE: WTW) is scheduled for after the market closes on Tuesday (February 28th); but despite how widespread obesity is, small cap dieting stocks have generally caused investor portfolios to loose weight.In early January though, shares gained weight when U.S. News & World Report ranked the diet as #1 in four categories while in December, shares also gained weight when Oprah Winfrey said shed lost 40 pounds using the program.

A technical chart for Weight Watchers International shows conflicting trend lines:

A long term performance chart shows small cap weight loss or dieting stocks Weight Watchers International and Reliv International, Inc (NASDAQ: RELV) still underperforming whileNutriSystem Inc (NASDAQ: NTRI) and Medifast Inc (NYSE: MED) began taking off early last year:

In early November, Weight Watchers International reported that revenues increased 4% on a constant currency basis to $280.8 million as Service revenues increased $232.6 million (driven by growth in North America of 8.0%, which was partially offset by declines in international markets) and Product Sales and Other revenue increased 0.1% to $48.2 million (driven by growth in North America of 6.3%, which was offset by declines in international markets).Key business metrics included:

End of Period Subscribers for Q3 2016 were up 10.1% versus the prior year period, primarily driven by continued recruitment growth in North America where End of Period Subscribers increased 14.5%. Global Q3 2016 End of Period Meeting Subscribers were up 10.4% and End of Period Online Subscribers were up 9.9% versus the prior year period. Total Paid Weeks in Q3 2016 were up 6.8% versus the prior year period, with a Meeting Paid Weeks increase of 7.7% and an Online Paid Weeks increase of 6.1%. These gains were led by growth in North America where Total Paid Weeks grew 10.4%.

Net Income was $34.7 million compared to $21.8 million. The CFO stated:

“We’ve seen a great response to our fall campaign and in Q3 we achieved our highest year-over-year percentage growth in recruitment so far this year. We continue to see positive reactions to our Beyond the Scale program, and we look forward to generating even more interest in Weight Watchers with our upcoming winter marketing campaign featuring Oprah Winfrey.

The Chairman added:

“The search for our next CEO is progressing well. We are pleased that the Members of the Interim Office of the CEO are deeply involved in the business and providing strong leadership during the transition. They, together with our management team, continue to advance the Company’s transformation progress and momentum.”

Finally, here is a quick recap of small cap Weight Watchers Internationals recent earnings history along with EPS estimate trends from the Yahoo! Finance analyst estimates page:

EPS Est. 0.02 -0.18 0.46 0.45
EPS Actual -0.03 -0.17 0.46 0.53
Difference -0.05 0.01 N/A 0.08
Surprise % -250.00% 5.60% N/A 17.80%
EPS TrendCurrent Qtr. (Dec 2016)Next Qtr. (Mar 2017)Current YearNext Year
Current Estimate 0.18 -0.07 1.02 1.15
7 Days Ago 0.18 -0.07 1.02 1.15
30 Days Ago 0.18 -0.08 1.02 1.13
60 Days Ago 0.19 -0.08 0.99 1.14
90 Days Ago 0.19 -0.08 0.95 1.14

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