Nutrisystem shares plunge to 7-year lows
FORT WASHINGTON, Pa. (AP) — Nutrisystem Inc. said Friday that it is looking at a "range of decisions" that could lower the company's results for the year.
And its guidance, released Friday, was already short of analyst expectations. Shares fell to a 7-year low.
The tough economy and intense competition in the weight-loss sector have been hurting Nutrisystem's finances. Revenue has declined in two out of the three quarters reported in 2012, and had dropped in the previous four years.
The company announced earlier this week that Dawn Zier, former president of Reader's Digest Association Inc.'s international division, is joining as Nutrisystem's president and CEO. It hopes that her "outside" perspective, as well as plans for early 2013, can help revive the company.
Nutrisystem's third-quarter profit was roughly half of what it earned last year. It earned $2.6 million, or 9 cents per share, for the quarter that ended Sept. 30. That is down from $6.1 million, or 21 cents per share, earned last year. After adjusting for one-time charges, it earned 16 cents per share, in line with estimates of analysts polled by FactSet.
Revenue fell 5 percent $81.3 million from $85.6 million. That is short of the $91.5 million that analysts were expecting.
Looking forward, the company forecast earnings of 15 to 20 cents per share, before one-time charges. Analysts had forecast profit of 44 cents per share.
Nutrisystem's Chief Financial Officer David Clark said that the company is evaluating a range of decisions that could further reduce its earnings for the fourth quarter and full year. Nutrisystem did not explain further.
The company also said it expects revenue to be flat or fall slightly from 2011.
Shares fell $1.32, or 14 percent, to $8.28 by late afternoon. Shares have not fallen so low since 2005.