This is one crash diet Oprah won't like.
The shares of Winfrey's WW International, the weight-watchers diet company, on Wednesday fell by more than 25 percent following a slowdown in the number of people signing up to the program.
The stock ended Wednesday was lower by 24.5 percent at $24.30 per share.
The WW managers blamed seasonal shifts, saying summer is just not a good time to start in the diet industry.
Although people are asking for a pause to lose weight and wellness, our recent consumer research shows that at the moment they are also acknowledging their need to re-committing to cutting out calories, WW CEO Mindy Grossman told investors during a conference call Tuesday.
It's a sudden turnabout for the New York-based company, which had been riding high on a wave of consumers determined to shed pounds and get back into shape during the pandemic.
The stay-at home trend had also been a boon to other diet companies, including Medifast and Noom.
But Malcolm Dean of Lane Research questioned whether people were taking a break from dieting, noting that Medifast is having a great year in 2014.
In 2020, they accelerated faster than anyone expected and it's been off to races since, he said of WW's fast losing rival.
Entertainment mogul Winfrey made a private investment in WW in October 2015 and continues to hold stock. She is also company spokesperson through 2025.
Also dragging on the stock, WW provided guidance for revenue and profit growth that was lower than forecasts with revenues for the year expected to reach $1.3 billion. Analysts attributed sales of $1.39 billion to sales of analysts.