Weight Watchers Jumps the Most in Five Months as Comeback Builds

(Bloomberg) -- Weight Watchers International Inc. soared the most in five months after adding subscribers for another quarter, the latest sign that its Oprah Winfrey-fueled marketing and updated diet program are resonating with customers.

The shares gained as much as 27 percent after second-quarter results handily beat estimates and the New York-based company delivered a rosy forecast. The jump marks the biggest intraday gain since March and extends an eye-popping rally for a stock that previously slumped for five straight years. The shares have now more than tripled in 2017.

The optimism gives a boost to new Chief Executive Officer Mindy Grossman, who took over at the company in July after years of running the shopping network HSN Inc. Weight Watchers has been mounting a turnaround since Winfrey bought a stake in the company in 2015 and agreed to pitch the brand. An initial stock rally that year was short-lived, but the shares have come roaring back in 2017.

Ads touting Winfrey's 40-pound weight loss have helped fuel sales and profit gains -- and emboldened investors. The shares climbed as high as $41.89 on Friday.

The company now expects earnings of $1.57 to $1.67 a share this year. Two analysts tracked by Bloomberg predicted $1.27 on average.

Profit rose to 67 cents a share in the second quarter, topping the 51-cent estimate. Subscribers climbed 20 percent, helping fuel $341.7 million in revenue.

“I feel really good about what we're building,” Grossman said in an interview. “The proof is in the results, and the proof will be in the ongoing ability to execute.”

An updated diet program and a better digital platform contributed to the growth, Grossman said in a statement. The company also has revamped Weight Watchers meetings, which long served as a key part of the five-decade-old system.

“By leveraging technology, innovation and the power of community, Weight Watchers will be able to realize the full growth potential of the business,” she said.

To contact the reporter on this story: Craig Giammona in New York at cgiammona@bloomberg.net.

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Jonathan Roeder