Weight Watchers cuts profit forecast, says CEO resigns
Aug 1 (Reuters) - Weight Watchers International Inc cut its profit forecast as competition from free apps ate into its business, sending its shares down 17 percent in after-hours trading.
The weight management company also said its Chief Executive of more than six years David Kirchhoff has resigned, effective July 30, to pursue other opportunities. It named Chief Operating Officer James Chambers as his replacement.
Weight Watchers cut its full-year profit forecast to a range of $3.55-$3.70 per share from $3.60-$3.90.
Analysts on average were expecting a profit of $3.72, according to Thomson Reuters I/B/E/S.
"Our prior forecasts had assumed the recruitment trend would improve, but the opposite has transpired ... We now expect these trends to continue for the remainder of this year," Chief Financial Officer Nick Hodgkin said on a conference call with analysts.
The company said net income fell to $64.9 million, or $1.15 per share, in the second quarter, from $77.5 million, or $1.36 per share, a year earlier.
Revenue fell 4 percent to $465.1 million in the quarter ended June 29, hurt by lower volumes in its meetings business, particularly in North America and the UK.
Weight Watchers' meetings business organizes meetings to offer nutritional advice to groups of customers. It also offers weight management plans through a network of company-owned and franchise operations.
Analysts on average had expected a profit of $1.11 per share on revenue of $459.3 million.
Weight Watchers shares were at $39 after market. They closed at $47.03 on the New York Stock Exchange on Thursday.
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