Call it the Oprah Effect.
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Oprah Winfrey, who owns a 10% stake in Weight Watchers (NYSE: WTW) led the brand to new heights in 2017. Her management skills probably helped, as she is a board member, but it was her public role that helped the company's weight-loss program make major membership gains.
Through nine months of its fiscal year, the company has increased its paid membership ranks by 18.4% globally and 19.1% in the United States. Online subscribers were the key, with that number growing by 24.4% through the first three quarters of the year.
In the most recent quarter, revenue rose to $324 million, up 15%, and earnings per share climbed to $0.65, from $0.53 in the same period a year ago. CEO Mindy Grossman celebrated those numbers in her remarks in the company's Q3 earnings release.
"We are excited about the upcoming winter season and the launch of our new program, which has received highly positive and enthusiastic feedback in consumer trials," she said. "We have a tremendous opportunity to continue to evolve Weight Watchers into a global, healthy living brand."
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When Winfrey first bought her stake in Weight Watchers in October 2015, the company saw major stock gains. For most of 2016, however, the numbers were up and down. In 2017, Winfrey's influence as a spokesperson took effect.
That sent shares in the company on a steady ride upward. After closing 2016 at $11.45, the company ended 2017 at $44.28, a 286% gain, according to data from S&P Global Market Intelligence.
Expect more of the same now that Winfrey has rebuilt the company's reputation. In addition, Weight Watchers has added DJ Khaled as a spokesperson, which should help it increase its appeal to men looking to lose weight.
The company clearly expects its growth to continue, having raised its EPS guidance to a range of $1.77 to $1.83 versus prior guidance of $1.57 to $1.67. Weight Watchers has changed its model to one that makes sense in a digital era. It has both in-person and online meetings, allowing members flexibility and positioning the company for further success.
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