Weight Watchers (WTW), the well-known provider of solutions to those who want to shed a few extra pounds, issued Q3 numbers on Tuesday. While losing inches is always a popular activity, that doesn't mean that the company will always see growth.
According to the corporate press release, Weight Watchers saw an 8% decline in net sales. Earnings per share came in at 68 cents on a diluted basis. That was only a penny better than the year prior. Management is certainly making the most of its revenues by keeping costs and expenses down, but it is obviously disappointing to shareholders when income expansion is dependent on belt-tightening.
Other problems are detailed in this Reuters article. The business needs to bring clients in, so it's doing a little promotional activity to heighten the profile of the services offered. Thing is, promotions cost money. This translates into a not-so-rosy outlook for the next quarter.
Shares of Weight Watchers are down this afternoon on the report. It looks like many investors want to take the bear case. The bull case, of course, centers on optimism for the promotion. Gathering new clients will hopefully reap top-line rewards in the future.
As far as I'm concerned, however, this stock isn't a very attractive one to own, either for the short or long term. If you check out a five-year chart over at AOL quotes, you'll note that the graphic lacks any significant quantity of hope and excitement.
Another thing to consider is the company's dividend history. If you're going to put up with a stagnant stock price, you at least need a rising dividend, correct? Well, don't look to this entity for such comfort.
Weight Watchers may indeed be a great place to go to in order to get in shape, but I'm not sure I'm a believer in the stock's ability to increase the health of my portfolio. I won't be putting this investment idea on my watch list anytime soon.
Disclosure: I don't own any company mentioned; positions can change without notice.











Reader Comments (Page 1 of 2)
11-12-2009 @ 3:04PM
lisanie43 said...
Weight Watchers is the leader of a hoax. They advertise massive hype and propaganda materials with an intent to mislead consumers, along with the advertisement showing 'before' picts and 'after' picts and to engage in false claims that their programs help 'clients'. The truth is that all of their products are unhealthy, and they all contains transfat and sugar. Weight Watchers should have been charged with fraud. Why they were not caught is beyond me.
11-12-2009 @ 3:26PM
markebauer said...
I became a life time member of WW in the 60's and therefore had a very low "life-time" fee. As of 2009 WW no longer would honor that fee if you had gained weight and came back to lose again. They had honored that life time contract for some 40 years no matter how many times I came back. Long story short...I bought tons of product from them every single week although my weekly entrance fee was low. When they no longer wanted to honor my old contract, I quit going and quit buying. If a company can't honor long standing contracts and simply be happy that an old timers will return and will be their biggest product consumers......well bye bye customers. Greed will get a company in trouble every time.
11-12-2009 @ 3:22PM
dagberg said...
The above comment is laden with out and out lies. It represents yet another reflection of how on the Internet anyone can say anything and get away with it. Weight Watchers is an effective program that coaches people how to eat sensibly and lose weight safely. Their food products are but a small part of their overall program; they tend to be substitutes for high-calorie sweets, and in any event are never featured as the central part of a weight loss program. And as such, I don't accept that they are particularly unhealthy.
The attractivenes of WW is that, in fact, you do NOT get coerced into buying prepackaged foods, you learn how to shop and prepare your own foods in accordance with sound nutritional principles. Their many cookbooks are excellent. I personally lost 50 pounds in seven months by following the WW program. People who rail against Weight Watchers are either ignorant of the actual program or they are people who refused to actually follow the guidelines for losing weight, which includes *accurately* tracking your food intake daily.
All this does not mean that the corporation is a great financial investment, but the program itself is very good and I recommend it to anyone who is serious about losing weight and keeping it off.
11-12-2009 @ 3:25PM
Mary said...
I follow a weight loss plan where I do not have to count
calories and I burn fat 24/7. To learn more about a fast and permanent weight loss plan, visit
http://www.fatlostnow.com
11-12-2009 @ 3:41PM
reyna1007 said...
I attended w.w.meetings for a couple months when they had the $5 per meeting promotion and zero joining fee. It worked well for me, learned heathy eating habits and found a great support system. However, I stopped attending when the fees went up and if a person missed a meeting they were charged for the missed meeting the next time the person attended. I don't think that's fair, so I stopped going. I know several people in my group stopped going for this same reason.
11-12-2009 @ 4:26PM
christine said...
I was a long time weight watcher member. I had lost a great deal of weight but never reached goal. I wanted to meet my goal weight but when the young executives took over in New York and took our long time leaders away I was discouraged along with many other fellow members. Those leaders that we loved traveled from New Jersey, they were no longer permitted to travel to our Brooklyn location. I tried to switch to a different leader but never felt comfortable. It was very upsetting. I new people that traveled to where our favorite leaders of Valerie and Julie continued being leaders. It was too far for me to travel. I gave up and never went back. It was a terrible decision on the part of weight watchers. I felt very much at home on Friday evernings with these wonderful leaders.
11-12-2009 @ 4:35PM
Rob said...
They are phonies. The people in the Long Island offices in 2 towns are more interested in talking about themselves and having people listen to their boring stories, when they should be talking about weightloss. one person in Huntington is too old to be a consultant, and no clue what she is talking about. Waste of money. Stop eating you faties and start exercising. I have to laugh at the women in plainview when they come to these meetings and strip down as much as they can because they want to weigh as little as possble but are still whales.
11-12-2009 @ 4:39PM
m said...
Weight Watchers is simply the best weight loss program in the world. It's real life friendly, you eat real food & the meetings are essential. I've had a life long weight problem & only Weight Watchers works for the long run. As far as money goes, where I live, it's always been a pay for missed meetings arrangement, so I've never had any reason to feel otherwise about it. After all, when you join gyms or country clubs or anything with dues involved, they don't charge only if you show up, do they? So, it's a very small price to pay for a life time of permenant health, happiness, self esteem & control over food. Give Weight Watchers a try, it'll change your life.
11-13-2009 @ 1:22PM
sabine miller said...
I find it absolutely ridiculous to call Weight watchers a 'hoax"...What's the matter? did the program not work out for you. I know for a fact it works and it's the best progream out there according to the majority of doctors.
False claims and before and after pictures is what the other so called weight loss programs show, not WW.
11-12-2009 @ 4:50PM
Denise said...
I agree I too am a lifetime member & when they stopped the perks for lifetime members they lost me along with many others too. It was a lot to achieve that and then to take all that you earned away was a stupid thing for them to do. They lost all the people that made it through their program by cheating them of their rewards. Now they've waited to long and most would never return now.
11-12-2009 @ 5:06PM
Murray said...
Whenever I go on WW and stay on it I lose weight all the time. It's my fault and my fault only that I lose the willpower to be totally committed to weight loss. It is definitely the only weight loss plan that works. It teaches you how to eat and if you stray... weight gain does not happen immediately as in the other diets. I hope that this time it will work for me and I can finish losing. Oh, by the way, I have lost 100 pounds so far on WW. Just wish I could lose the last 50.
11-12-2009 @ 5:12PM
Zawadi said...
I have been a member for a long time now. But now that I am retired the price is hard to come by every month because a I like the monthly pass. But I've made great friends and my Tuesday evening 5:15 meeting in Massapuqua, NY is the best one around town. Elaine is one of the greatest leaders you will ever find. Linda our old leader is also great and if I can't make Tuesday then I go on Sunday morning but Tuesday is the TOPS.
11-12-2009 @ 5:30PM
bbhanks said...
Weght Watchers is by far the greatest weight loss program out there. It teaches you to change you lifestyle. Anyone that did not lose weight was just not committed or too lazy to follow the program. Of course things change over time and you have to be willing to change with them By dropping out, you were only hurting yourselves.
11-12-2009 @ 5:42PM
Lynn said...
The first time I join WW the fee was $5.00 a meeting and than went up to $8.00 a fee now we are paying between $12.00 and $15.00 per meeting. I can't afford cost about around $30.00 to join. Plus the food they selled, you can buyed nearly the same in the Super Market under another brand and its alot cheaper. So, I quick and doing on my own with there point system books. I put my weekly fees what WW charge away and buyed me news clothes after I lost 50 pounds.
11-12-2009 @ 5:51PM
parker9090 said...
I have lost 84 pounds since January 22. Doesn't feel like a hoax to me.
11-12-2009 @ 6:05PM
Smahtasz said...
It doesn't work! I wanted to lose a quick 10lbs and signed up and lost 3.5lbs the first week. Stuck to my points, didn't use 1 "flex point" stepped up my work outs and went back the next week and GAINED .5lbs! I went up and down for 4 months only to go back to the exact same weight as when I started. So frustrating and it cost me 160 bucks! Huge scam. The leaders are horrible, they say they'll work with you then end the meeting early and leave you just sitting there by yourself. They want you to use the flex points, which I ended up doing, so it will take the weight off REAL SLOW. The other people who work for them are not very nice or motivation either. They want the members to do all the talking they offer no solid advice I didn't know. I stopped WW went back to just doing what I was doing and lost 3lbs in 2 weeks, well on my way to my 10lbs!
11-12-2009 @ 6:11PM
angie said...
Sales are down because it's the end of the year. Wait til January 1 and all the new year resolutions. The meetings will be full and so will WW's pockets!
11-13-2009 @ 2:50AM
lgcarter98662 said...
I am not surprised by this
I am a three strike out, drop out at Weight Watchers.
One plan deprived you of your favorites all week, but you could splurge on weekends. the other was to count the points. When you have busy schedules, it is impossible to do. To make a long story short,I did lose some weight each time,(too hard to maintain) but I gained it back, plus more each time after I quit. I originally went on WW because I was 20 pounds overweight, I am now 60 pounds overweight. While there were other factors involved leading to the weight gain, it is a very difficult and frustrating protocol to follow to lose the weight, by trying to force yourself to eat foods you dislike.
11-12-2009 @ 7:11PM
Susan said...
It's not a hoax. I've lost 14 pounds so far and have 31 to go. It's not a quick weight loss, but I've been sticking to the plan and the weight does continue to melt off. This is the first "diet" I've ever been on that doesn't make me feel deprived. There is no food that is off limits, as long as I make accommodations for it, points-wise. So I've had pizza, ice cream, fish fry (by using my bonus points). I buy a few of their snack products simply because I like them and they are convenient and low in points. But you can do this diet without buying ANY of their products. In fact, the goal is to teach you to eat like a regular person for a lifetime. So 99% of what I eat is just regular groceries, not WW brand. You just learn to make smarter, healthier choices. I'm eating great food. You save points by choosing fresh, unprocessed foods, so think of it as eating at a fine restaurant instead of fast food. The more successful you are at choosing well, the more you get to eat. I don't know if it's a good investment from a stockholder POV, but for a middle-aged woman in a family filled with diabetics, I think it's a great investment.
11-12-2009 @ 7:43PM
Carl Van Dam said...
cost tooo much money... if it was cheaper more people would go ... if products were cheaper more people would buy