Investing.com - Weight Watchers surged Wednesday, shrugging off the broad market slump after the health and weakness company beat earnings and raised guidance as subscriber growth steadied.
The company raised its full-year outlook, predicting full-year earnings per share in the range of $1.55 and $1.70, above consensus estimates of $1.52, sending Weight Watchers International shares (NASDAQ:WW) up about 40%.
The healthier outlook comes as the company reported mixed second-quarter performance as earnings beat, but revenues missed consensus estimates from Investing.com.
Earnings of 78 cents for the quarter, topped consensus estimates for earnings of 65 cents. But revenue of $369 million undershot estimates of $376.1 million.
The earnings beat comes as the company’s efforts to boost marketing steadied subscriber growth, which slumped earlier this year amid poor communication about the shift to a more of wellness company than a weight loss company.
Weight Watchers’ total members grew to 4.6 million for the quarter, up from 4.5 million members a year earlier. The steadier trend in subscriber growth drew praise from some analysts, though they warned that the company is not out of the woods yet.
“Shares of WW continue to track well off highs and near historical lows, as investors fret over much-weaker-than-expected member growth earlier this year,” Oppenheimer said in a note to clients. “As we examine closely the better Q2 (Jun.) results, we by no means view WW as “out of the woods.”
The surge in Weight Watchers shares to about $29.40 cut their losses for the year to about 26%. At their low of $16.71 on May 31, the shares were down 58% on the year.
The 12-month consensus target among analysts polled by Investing.com is $26.06.