Is the Oprah Effect Starting to Show Up in Weight Watchers Results?

Oprah Winfrey’s partnership with Weight Watchers International Inc. may be starting to pay off for the long-struggling company, according to a report from ITG Investment Research.

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The number of people signing up for Weight Watchers improved in the fourth quarter, ITG analyst John Tomlinson said in a report. Though some of that stemmed from favorable comparisons with the year-earlier period, Winfrey’s backing of the company may have been a factor, he said. The optimistic outlook helped send the shares up 4.7 percent to $10.81 on Tuesday.

“The improved trends can perhaps be partially attributed to the ownership deal with Oprah that was finalized in October,” Tomlinson said.

Weight Watchers generated $260 million in sales in the fourth quarter, ITG estimates. That’s above the average analyst prediction of $257 million, according to data compiled by Bloomberg. In January, new members coming to meetings appear to be up about 35 percent, ITG found.

Winfrey, 62, announced her agreement with Weight Watchers in October, saying she would buy 10 percent of the stock and join the board. Later that month, she reported that the stake was almost 15 percent, including options.

Oprah began appearing in ads endorsing Weight Watchers in December. The latest clip — which she posted with the tweet “Eat bread. Lose weight. Whaaatttt?” — focused on her love of bread.

“This is the joy for me,” Winfrey said. “I don’t deny myself bread. I have bread every day.”

Source: http://www.bloomberg.com/news/articles/2016-02-09/oprah-effect-may-be-prodding-more-people-to-try-weight-watchers
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