Weight Watchers shares tanked nearly 14 percent Thursday after the company said the number of subscribers had declined for the second quarter in a row and its third-quarter earnings and revenue missed expectations.
The company reported third-quarter net income of $70.1 million, or $1 per share, up from $44.7 million, or 65 cents per share, in the year earlier. Excluding a gain from a reversal of a tax reserve, the company earned 96 cents per share, 5 cents below the the 99 cents per share expected by analysts surveyed by Refinitiv.
Weight Watchers, which has rebranded to WW, posted revenue of $365.8 million, well short of the $379 million analysts polled by Refinitiv had expected.
The company reported a record 4.6 million subscribers at the end of the first quarter, helping to send its stock price to a record intraday high of $105.73 on June 20. That number slipped to 4.5 million in the second quarter and fell to 4.2 million this quarter.
Shares closed at $68.49 on Thursday.
While down from the previous quarter, the 4.2 million subscribers is still a 25 percent increase from the 3.4 million subscribers the company had at the end of the third quarter last year. However, investors want to see WW deliver on its vision to keep customers longer.
“We have accomplished a great deal in 2018; however, I believe the true impact of our bold moves will be realized in 2019 and beyond,” CEO Mindy Grossman said in a statement.
For the full-year, the company narrowed its forecast to a range of between $3.15 and $3.25 per share from between $3.10 and $3.25 per share.