NutriSystem Drops 21% in AH on Lower Guidance

Shares of NutriSystem tanked 20.75% to $37.70 in after-hours trading, following the company's lowering of Q3 EPS guidance to $0.62 to $0.66, compared to its previous outlook of $0.77 to $0.82. Analysts were expecting EPS of $0.82, on average. NutriSystem cited a 7% decline in business from new customers and higher customer acquisition costs, although it still sees revenues growing 21% to $188M, which is down from its earlier projection of $200M to $208M. Analysts had forecast sales of $207M. Separately, NutriSystem said it may repurchase up to an additional $100M of its shares creating a combined buyback program totaling $207M. NutriSystem also entered into a five year $200M unsecured revolving credit facility. "We believe the new credit facility along with our current cash balances and the cash generating capability of our core business gives us the financial flexibility to make accretive share repurchases and enhance our growth by pursuing acquisitions to offer consumers a wider variety of complementary health and wellness products," commented CEO Michael Hagan. NutriSystem is scheduled to report Q3 earnings on Oct. 23. NutriSystem lost 1.4% to $47.57 during the regular session.

Sources: Press release, Reuters, MarketWatch
Commentary: Stocks With Highest, Lowest Short Interest • Seven Weight Loss Stocks To Beef Up Your Portfolio • NutriSystem Losing Weight Against a Slowing Economy
Stocks/ETFs to watch: NTRI. Competitors: WTW, HLF, DIET

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