Shares of Nutrisystem, Inc. (NTRI) plunged more than eleven percent in extended trading on Tuesday after the weight management products company provided earnings and revenue guidance for the third quarter below Street view. The company also trimmed revenue forecast for the full-year 2014, while raising annual earning outlook.
However, the company reported a profit for the quarter that increased from last year, reflecting double-digit revenue growth. Both earnings per share and quarterly revenues topped analysts' expectations.
"We are pleased with our strong performance in the second quarter of fiscal 2014, as we exceeded our earnings per share and adjusted EBITDA expectations. Our continued efforts around our four-point plan have enabled us to deliver our third consecutive quarter of year-over-year double-digit revenue increases fueled by our growing direct and retail channels," President and CEO Dawn Zier said in a statement.
Zier noted that the company is making progress on e-commerce, pricing and retail initiatives in addition to a double-digit increase in new customer growth.
The Fort Washington, Pennsylvania-based provider of weight loss programs in the U.S. reported net income of $8.70 million or $0.30 per share for the second quarter, higher than $6.36 million or $0.22 per share in the prior-year quarter.
On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.26 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter grew 14 percent to $111.05 million from $97.47 million in the same quarter last year, and topped four Wall Street analysts' consensus estimate of $109.43 million.
Gross profit for the quarter increased 14 percent to $56.9 million from the year-ago quarter. Total costs and expenses grew to $97.81 million from $87.66 million in the prior-year quarter.
Looking ahead to the third quarter, Nutrisystem forecasts earnings in a range of $0.12 to $0.17 per share, on projected revenues between $85.0 million and $90.0 million. Analysts expect the company to report earnings of $0.22 per share on revenues of $93.70 million.
For fiscal 2014, the company raised earnings guidance to a range of $0.60 to $0.68 per share from prior forecast range of $0.57 to $0.67 per share. However, the company trimmed revenue forecast to between $392.0 million and $407.0 million from the previous projection between $397.0 million and $407.0 million.
Street is currently looking for full-year 2014 earnings of $0.61 per share, on annual revenues of $400.23 million.
The company's board of directors also declared a quarterly dividend of $0.175 per share, payable August 18 to shareholders of record as of August 8, 2014.
"Looking ahead, we remain focused on the successful execution of our strategic initiatives and expanding the breadth of our brand." Zier added.
NTRI closed Tuesday's regular trading session at $17.94, down $0.27 or 1.48% on a volume of 0.78 million shares. The stock plunged a further $2.01 or 11.20% in the after-hours trading.
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