Weight Watchers International, Inc. (WTW) has reported a 59.17 percent jump in profit for the quarter ended Oct. 01, 2016. The company has earned $34.70 million, or $0.53 a share in the quarter, compared with $21.80 million, or $0.38 a share for the same period last year.
Revenue during the quarter went up marginally by 2.74 percent to $280.80 million from $273.30 million in the previous year period. Gross margin for the quarter expanded 141 basis points over the previous year period to 51.39 percent. Total expenses were 76.21 percent of quarterly revenues, down from 76.91 percent for the same period last year. This has led to an improvement of 70 basis points in operating margin to 23.79 percent.
Operating income for the quarter was $66.80 million, compared with $63.10 million in the previous year period.
However, the adjusted operating income for the quarter stood at $67.30 million compared to $64.20 million in the prior year period. At the same time, adjusted operating margin improved 48 basis points in the quarter to 23.97 percent from 23.49 percent in the last year period.
"We've seen a great response to our fall campaign and in Q3 we achieved our highest year-over-year percentage growth in recruitment so far this year. We continue to see positive reactions to our Beyond the Scale program, and we look forward to generating even more interest in Weight Watchers with our upcoming winter marketing campaign featuring Oprah Winfrey,” said Nick Hotchkin, the Company’s CFO and Member, Interim Office of the CEO."
For financial year 2016, the company projects diluted earnings per share to be in the range of $0.95 to $1.05.
Working capital remains negative
Working capital of Weight Watchers International, Inc. was negative $98.60 million on Oct. 01, 2016 compared with negative $193.64 million on Oct. 03, 2015. Current ratio was at 0.69 as on Oct. 01, 2016, up from 0.62 on Oct. 03, 2015.
Days sales outstanding went down to 5 days for the quarter compared with 9 days for the same period last year.
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