Boston, MA 05/01/2014 (wallstreetpr) – The weight management company Weight Watchers International, Inc. (NYSE:WTW) reported Q12014 earnings results that fell short of the performance a year earlier. However, the stock is surging in the current session. The surge in the stock is linked to the upbeat estimates that the company has issued for the current fiscal year.
However, despite decline in profit and revenue in the latest quarter compared with a year ago, Weight Watchers International, Inc. (NYSE:WTW)’s performance exceeded Wall Street expectation. The stock dropped in recent times following concerns over the company’s competitiveness in a market that is increasingly becoming dominated by startups offering free technology services.
As to whether Weight Watchers International, Inc. (NYSE:WTW) has a future in business, the CEO Jim Chambers stated the company is doing all that is possible to turnaround its fortunes while keeping a closer eye on technology and personalized services. However, he admitted that the company has a long journey to travel to achieve real transformation.
While a return to the former big profit and revenue numbers might not happen overnight, the executives at Weight Watchers International, Inc. (NYSE:WTW) seem to be very optimistic about the company’s future prospects as their strong guidance can show.
Strong guidance
Weight Watchers International, Inc. (NYSE:WTW) updated earnings guidance for the current fiscal year. The company expects earnings per share for the full-year to come between $1.45 and $1.70. It previously guided earnings per share between $1.3 and $1.6. The earnings upgrade suggests improving conditions in the company and the market.
Analysts on their part expect the company to earn $1.44 per share on $1.4 billion revenue for the full-year 2014.
Weight Watchers International, Inc. (NYSE:WTW) reported 56 percent profit decline in the latest quarter. Therefore, profit came in at $21.5 million as the company took reactionary measures to attract and retain customers through price reductions. As a result, profit margins suffered leading to a massive drop. Adjusted EPS in the quarter was 31 cents compared with 87 cents in the same period a year ago. Nonetheless, the results were better than 9 cents per share that Walls Street estimated for the quarter.
Revenue in the quarter was $409.4 million, down almost 17 percent but better than $399.2 million Street estimation.
Brazil saved the day
Performance in the latest quarter was supported by a strong contribution from the Brazilian stake. Weight Watchers International, Inc. (NYSE:WTW) benefited from additional of stake it made in its Brazilian partnership. It gained $6.4 million or 11 cents per share in Q1.
A strong Brazilian market coupled with internal transformations should help Weight Watchers International, Inc. (NYSE:WTW) to grow profits and revenue.
