Oprah Winfrey partnership could be an expensive choice for Weight Watchers as shares plunge on massive loss and missed earnings forecasts

 
Caitlin Morrison
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An Evening With Oprah - Sydney
Oprah Winfrey invested in the firm last year (Source: Getty)

Weight Watchers stock has plummeted by over 27 per cent in after hours trading after the worldwide dieting organisation reported a loss of $11.3m (£8.1m) for the fourth quarter of 2015, compared with profit of $4.4m in the same period in 2014 - a 359 per cent drop in income.

This brought earnings per share (EPS) to a loss of $2.2, down from EPS of $5 this time last year. Revenue fell 20.9 per cent to $259.2m from $327.8m.

Analysts had been expecting earnings of two cents per share on revenue of $257.7m.

The figures are just the second set of earnings Weight Watchers has reported since media icon Oprah Winfrey made a substantial investment in the company last October, and the group attributed the quarterly loss in part to costs associated with Winfrey coming on board.

A restructuring of the company, which saw the introduction of a new weight loss programme, was also one of the reasons behind the loss, the firm said.

Winfrey became a board member and adviser to the group when she purchased a 10 per cent stake in the company's newly issued shares, as well as becoming a fully fledged Weight Watchers member, attending weekly meetings and sharing her experiences along the way.

"The partnership with Oprah Winfrey is off to a strong start,” Chambers added. “Our transformation momentum is building, with positive recruitments this winter season setting a solid foundation for revenue growth and increased profitability."

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