Due To Weight Watchers Loss In 4th Quarter Revenue...Oprah winfrey Loses $29 Million
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| Due To Weight Watchers Loss In 4th Quarter Revenue...Oprah winfrey Loses $29 Million |
Weight Watchers International had hoped Winfrey's collaboration could help boost subscription numbers and sales.
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| Oprah Winfrey |
As a result, the paper value of Winfrey's stake plunged by about $24 million, Reuters reported. However, she has still gained almost $75 million since she made her investment, the news wire added.
The earnings report marked a sharp turnaround from October, when billionaire mogul Winfrey — who has had very public ups and downs with her weight over the years — came aboard.
The stock price doubled on the news. She took a 10% stake, with options to purchase 5% more.
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| Oprah Winfrey |
When Winfrey tweeted a video last month saying that thanks to Weight Watchers, she had whittled away 26 pounds even while eating bread every day, shares leaped more than 20%.
Despite the steep stock drop, at least one analyst said that he was heartened by the company's financial projections and progress.
“The market may have been looking for a more pronounced 'Oprah effect' in 2016, likely explaining today's pullback,’’ R.J. Hottovy, an analyst with Morningstar, said in an investor's note Friday.
But the full-year projections of revenue growth in the low single digits, and adjusted earnings per share between 70 cents and $1.00 “is consistent with our expectations for a more gradual recovery.
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| Wight Watchers |
This guidance strikes us as realistic when factoring in structural industry changes, including mobile apps and other technologies disrupting industry wide pricing power.’’
He added that “we see encouraging signs, including strong reception to Oprah Winfrey-led marketing efforts, “Beyond the Scale,’’ platform enhancement, and increased levels of digital engagement.
We’ve consistently stated that 2016 will be a transitional year for Weight Watcher and that it will take time to build consumer awareness of recent platform changes.’’
Winfrey often promotes Weight Watchers on social media.
In January, after she tweeted a video saying she lost 26 pounds on the diet program while still eating bread every day, company stocks rallied more than 16 percent and she made $12 million.
— Oprah Winfrey (@Oprah) January 26, 2016
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