Shares of Weight Watchers International Inc. (WW 7.16%) -- which rebranded itself as WW last month -- plummeted 29.7% on Friday, after the weight-loss products and services company announced underwhelming third-quarter 2018 results.
That's not to say WW's performance looked bad on the surface. Revenue climbed 13% year over year to $365.8 million, while adjusted net income climbed more than 50% to $0.94 per share. Analysts, on average, were expecting adjusted earnings of $0.99 per share on revenue of $365.8 million.
Weight Watchers was also quick to point out that its number of subscribers grew nearly 25% year over year to 4.2 million, including 2.7 million digital subscribers and 1.4 million meeting subscribers. But that's also down from roughly 4.5 million subscribers it boasted three months ago.
WW CEO Mindy Grossman remained optimistic:
As we expand our mission from being the global leader in weight management to becoming the world's partner in wellness, we marked a major milestone with our rebranding as WW. We are also enhancing our digital experience in ways that are meaningful to our members' lives, including through the launch of WellnessWins, our first loyalty and rewards program. We have accomplished a great deal in 2018; however, I believe the true impact of our bold moves will be realized in 2019 and beyond.
WW also revised its full-year 2018 earnings guidance to between $3.15 and $3.25 per share, narrowed from its old target for between $3.10 and $3.25 per share.
Of course, as Grossman teased, WW may be taking all the right steps to resume sustained, profitable growth on a sequential basis next year. But given its underperformance relative to Wall Street's expectations, and its continued subscriber losses in the meantime, it's no surprise to see shares falling hard today.