What: Shares of Weight Watchers (NASDAQ:WW) fell as much as 38% today after the company reported fourth-quarter financial results that were worse than the consensus analyst estimate and gave a very bleak outlook for the full year. By 3:30 p.m. the stock was down about 35% from the previous close.

So what: Weight Watchers reported fourth-quarter revenue of $328 million, down 10% from the year-ago quarter, and about $5 million lower than expectations. Adjusted EPS of $0.07 was in line with expectations. Before adjustments, and including the impact of restructuring and non-cash impairment charges, Weight Watchers' GAAP loss was $0.28.

Weight Watchers' guidance came in far below expectations. The company expects to earn between $0.40 and $0.70 per share in 2015. The average prediction from analysts for Weight Watchers 2015 EPS guidance was $1.43

Now what: Weight Watchers is a business in decline, with a successful turnaround only hopeful at this point. While the stock's cheap valuation seems to take this decline into consideration, there is clear pressure from trendy health apps, and a growing number of digital alternatives to the company's weight-management programs.

Further, GAAP profits won't come easy for Weight Watchers. The company noted in its 8-K filing for Q4 results that the costs associated with its plans to "resize its organization" are not included in its worse-than-expected 2015 guidance. While CEO Jim Chambers said in the earnings release that its "aggressive steps to right-size our cost structure" will eventually translate to a $100 million cost-savings initiative, he admitted that things are taking longer than expected: "While we still believe in our underlying strategies, I am disappointed that we are not yet where we hoped to be and our turnaround will take longer than we had anticipated."

I'd steer clear of Weight Watchers stock until I see signs of a durable business model and customer base.