Thursday, weight management services provider Weight Watcher's International Inc. (WTW), said its first quarter earnings dipped from the year ago period, but came in line with the Street estimate, despite a decline in revenues. Going forward, the company said it expects full year earnings above the current Street view.
New York-based Weight Watcher's first quarter net income attributable to the company slipped to $47.3 million or $0.61 per share, down from $57.4 million or $0.72 per share in the prior year period. Five analysts polled by Thomson Reuters expected the company to earn $0.61 per share for the quarter. Analysts' estimates typically exclude special items. Excluding items, net income was down at $49.2 million or $0.64 per share, compared to $55.8 million or $0.70 per share a year ago. Net income for the quarter included restructuring charges of $1.9 million, while the year-ago period results included a $2.3 million charge associated with the adverse U.K. VAT ruling.
Weight Watcher's first quarter net revenues decreased to $390.6 million from $437.0 million a year ago, falling short of analysts' consensus revenues estimate of $395.79 million.
Commenting on the results, David Kirchhoff, president and chief executive officer said, "Our first quarter results were consistent with our expectations and were significantly impacted by unfavorable foreign currency translation, which accounted for approximately three-fourths of our revenue decline versus the prior year period and reduced our earnings per fully diluted share by $0.05."
During the quarter, Weight Watcher's meeting fees decreased to $225.9 million from $253.2 million in the prior-year period. Product sales were down at $92.5 million, compared to $110.1 million a year ago. However, Internet revenues rose to $48.4 million from $45.5 million.
Weight Watcher's total North American revenues during the quarter declined to $205.0 million from $224.1 million in the same period last year. International revenues totaled $113.4 million, down from $139.2 million in the corresponding period last year.
Weight Watcher's reaffirmed its full year 2009 earnings guidance between $2.50 and $2.75 per share, excluding restructuring charges associated with the company's previously disclosed cost savings initiatives. Analysts currently expect the company to report earnings of $2.48 per share for fiscal year 2009.
Among others in the industry, Horsham, Pennsylvania-based NutriSystem Inc. (NTRI) reported a first-quarter net income that declined 37% to $8.8 million or $0.29 per share from $14.1 million or $0.41 per share in the prior-year quarter, reflecting continued challenges in overall consumer spending. On an adjusted basis, net income was $0.31 per share, compared to $0.44 per share in the year ago quarter. Revenues declined 25% to $162.7 million from $216.5 million a year ago.
WTW closed Thursday's trading at $26.45, up $0.39 or 1.50%, on a volume of about 0.58 million shares. In after hours, the share traded at $27.50, gaining further $1.05 or 3.97%.
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