Why Weight Watchers International, Inc. Surged Another 19% Today

By Seth McNew Markets Fool.com

What happened

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Weight Watchers International, Inc.(NYSE: WTW)shares have been on a steady run this year, and today rose another nearly 19% after the company released Q1 earnings that showed just how well its new program is working. The stock is now up around 112% so far in 2017.

So what

Weight Watchers reported first-quarter sales of $329 million, up 7% over the same period last year. Even more impressive is that earnings grew to $10.7 million, or $0.16 per share, compared with a loss for the same period last year, though some of that major earnings beat was due to a one-time tax benefit related to the "cessation of operations of the Company's Spanish subsidiary."

The iconic weight-loss program was revamped last year and the overhaul seems to be working, as memberships during the quarter were up 16% year over year, to a new total of 3.6 million. The new Weight Watchers program is getting some marketing muscle from spokesperson and minority shareholderOprah Winfrey, and has received various awards this year such as the"Best Diets of2017"awardsfromU.S. News & World Report. Additionally, the company has done a great job of growing its presence internationally and with online subscriber growth.

Image source: Weight Watchers International.

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Now what

Weight Watchers has finally hired a new CEO after its former one hurriedly resigned last September. Former HSN Inc. CEOMindy Grossman will now take the role startingin July. Ray Debbane, Chairman of the Weight Watchers Board of Directors, said in the earnings release that:

Weight Watchers has delivered a very successful winter season, solidifying the Company's return to growth. As the Company previously announced, I look forward to Mindy Grossman joining the Weight Watchers team and our Board of Directors in July. She is the right CEO to empower the brand and unlock its full potential.

The company raised its full-year 2017 guidance, yet again, to earnings of $1.40 to $1.50 per share compared with$1.03per share for full-year 2016.Things seem to be moving in the right direction for this brand. While the stock may be a long way from the all-time highs it reached in 2012, it could have plenty of room to run from here.

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Seth McNew has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.