Weight Watchers International Inc forecast full-year earnings below Wall Street expectations as attendance at its diet meetings remained low so far this year, sending its shares down more than 15 percent after the bell.
The weight management company expects mid- to high-teen declines in attendance in the first quarter.
The company said its marketing strategy has not been effective in an increasingly competitive environment with its diet meetings business losing steam in North America and the United Kingdom.
"Consumers saw their paychecks shrinking by mid-January. Suffice it to say the timing was less than ideal for us," Chief Executive David Kirchoff said on a conference call with analysts.
He said a new program launched in early December failed sustain momentum in 2013.
The company was also weighed down by higher marketing expenses related to first-time TV campaigns in several countries and online ads targeting men in the United States.
"Our January ads lacked the persuasion we needed," Kirchoff said.
The company, which competes with Nestle's Jenny Craig Inc, Nutrisystem Inc and Medifast Inc, said it expects full-year earnings of $3.5 to $4.0 per share. Analyst on average were expecting $4.75 per share, according to Thomson Reuters I/B/E/S.
However, the company reported fourth-quarter results above expectations, with earnings of $1.03 on revenue of $407.9 million.
Analysts had expected earnings of 87 cents on revenue of $397.6 million.
Shares of the company closed at $54.11 on the New York Stock Exchange on Wednesday.
(Reporting by Juhi Arora in Bangalore; Editing by Don Sebastian)
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