UK: Slow economy hits Weight Watchers profits

Posted by Josette Dunn on 10th May 2010

Weight Watchers International has booked a drop in earnings for the first quarter, hurt by poor weather, a slowdown in the economy and “difficult” operating conditions.For the three months ended 3 April, the company earned US$44.6m compared to $47.3m in the prior year.

First-quarter revenues also declined, by 4.5% on a constant-currency basis, to $388m.

Operating income amounted to $91.4m, a 5% decline on the prior year.

“The first quarter of fiscal 2010 proved to be one of the more challenging quarters that Weight Watchers has faced,” said David Kirchhoff, president and CEO. “The combination of residual slowness in the economy, unprecedented bad weather in our largest markets, and cycling against the new program launch last year in the US and UK created uniquely difficult operating conditions.”

The company reaffirmed its full-year fiscal 2010 earnings guidance range of $2.25 to $2.50 per fully diluted share.

“We are anticipating that improved volume trends versus our earlier expectations will likely be offset by a stronger than expected US dollar as well as the impact of higher interest expense resulting from more debt maturity extensions than originally factored into our guidance,” Kirchhoff said.

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