The stock market was little changed on Tuesday amid doubts that President Trump will be able to push forward his promised tax reform. In addition to rebukes from Democrats after a draft bill introduced last week revealed plans to sharply reduce corporate income taxes, some Republicans have voiced opposition over the proposed repeal of deductions on state and local income tax payments.
Today's stock market
|Index||Percentage Change||Point Change|
Financials stocks led today's declines, with the Financial Select Sector SPDR Fund (NYSEMKT:XLF) falling 1.4%. But consumer goods stocks rebounded after a difficult start to the week, sending the Consumer Staples Select Sector SPDR ETF (NYSEMKT:XLP) up 1.1%.
Weight Watchers gets a boost
Shares of Weight Watchers climbed 13.6% today after the weight-management services specialist announced strong third-quarter 2017 results and increased its full-year guidance.
Weight Watchers' quarterly revenue climbed 15.3% year over year to $323.7 million, helped by a 20% increase in total paid weeks and 18% growth in subscribers to 3.4 million exiting the quarter. That translated to 29% growth in net income to $44.7 million, and 23.7% growth in earnings per share to $0.65. Analysts, on average, only expected earnings of $0.51 per share on revenue of $319.4 million.
CEO Mindy Grossman noted that Weight Watchers' performance was strong across all major geographies, adding that the company is excited for both the winter season and the launch of its new program, "which has received highly positive and enthusiastic feedback in consumer trials."
"Our solid financial performance continued with year-over-year revenue growth, gross margin expansion, increased profitability, and strong cash generation," added CFO Nick Hotchkin. "We are confident our business momentum will continue throughout the balance of the year, and therefore, we are raising our earnings guidance for the full year 2017."
Weight Watchers now expects full-year 2017 earnings per share in the range of $1.77 to $1.83, marking a significant increase from its previously expected range of $1.57 to $1.67.
TripAdvisor disappoints investors
Meanwhile, shares of online travel site TripAdvisor plunged 23.2% after the company posted a mixed quarterly performance. Quarterly revenue rose 4.3% year over year to $439 million, as a 3% decline in hotel revenue (to $312 million) was more than offset by 26% growth in non-hotel revenue (to $127 million), led by growth in attractions and restaurants. That translated to adjusted earnings of $50 million, or $0.36 per share, down from $78 million, or $0.53 per share in the same year-ago period. By comparison, consensus estimates predicted adjusted earnings of $0.35 per share on higher revenue of $451.8 million.
Nonetheless, CEO Steve Kaufer insisted the company is "making progress" on its 2017 initiatives, particularly as it invests for longer-term revenue growth by improving shoppers' experience and shifting marketing resources to brand-building channels.
In the meantime, CFO Ernst Teunissen elaborated that finding near-term growth within the hotel segment has proven "more difficult than expected," leaving the company to rely on expense management and the relative outperformance of its non-hotels segment. As such, TripAdvisor now expects low-single-digit percent revenue growth for all of 2017, marking a significant reduction from previous guidance for mid-single-digit growth.