Dieting remains a popular trend, but diet companies have come and gone depending on the latest diet fads, as well as competition from “instant weight loss” supplements. Through it all, Weight Watchers has held on with its point system, touting its program to be the long-lasting path to maintaining a healthy weight and eschewing all the diet trends.
In September 2015, Weight Watchers signed Oprah Winfrey to be its spokesperson, and their shares doubled in a single day, according to a Bloomberg report. The company is betting on her influence to give its subscriber base as well as its stock a boost. She has a ten percent stake in the company, so she stands to gain from the success, too.
U.S. News & World Report ranks the company first in 4 out of 9 categories for the 2017 Best Diets, which bodes well in such a competitive market. While still a major player in the weight loss business, it is floundering a bit in trying to revive its brand, especially with competition from free diet and fitness apps as well as other major brands such as Nutrisystem. Plus, it’s still struggling to find a replacement CEO, and is being run by a team of executives since the former CEO Jim Chambers stepped down in September.
To help boost its appeal to new users, Weight Watchers added a new nutrition program as well as a social networking component to its app, in hopes that new members would subscribe. But they are betting the most on Oprah.
According to Bloomberg, the stock has been on a wild ride in the last year. Each time Oprah posts a video or does an ad about her success, the stock surges, but it has also dropped following some disappointing quarterly reports. There was a 20 percent increase of shares last January after Winfrey said she had lost 26 pounds while still eating bread every day, and the company’s subscribers have increased for three straight quarters in 2016.
Weight Watchers is heavily marketing Oprah’s weight loss journey, especially around the New Year when people tend to join diet and fitness programs. The company ran another campaign in late December and January, with Oprah celebrating that she lost 40 pounds on the Weight Watchers diet, and was still able to eat the foods she likes like pasta and bread. With this ad, the stock rose another twenty-five percent according to Yahoo! Finance.
The company did report earnings in November that were higher than Wall Street's forecasts, so shareholders can remain optimistic.
Still, Weight Watchers has a long way to go.
