(Reuters) - Weight Watchers International Inc (WTW.N) shares fell as much as 21 percent after the weight management company said it expects recruitment trends to deteriorate through the year as customers increasingly turn to free apps and electronic monitors.
Weight Watchers cut its full-year profit forecast on Thursday and announced the resignation of Chief Executive David Kirchhoff.
“The company offered little in terms of its plan for the 2014 marketing campaign, offering no basis to assume recruitment trends improvement,” Credit Suisse analyst Glen Santangelo wrote in a note on Friday.
The brokerage cut its price target on Weight Watchers’ stock to $45 from $54.
Weight Watchers’ shares were down 18.5 percent at $38.35 on Friday, their lowest in more than two years.
Attracting new members was the key challenge, Chief Financial Officer Nick Hodgkin said on a post-earnings call on Thursday.
“This has been the case in meetings for some time and during the quarter we experienced heightened pressure in our WeightWatchers.com business.”
The company’s membership plans help individuals manage their weight through group meetings that offer nutritional advice and support. Members can also follow the company’s plans online.
Hodgkin cited a “sudden explosion of interest” in free apps and activity monitors for falling interest in the company’s offerings.
“For 2014, we expect the meetings active base will be even lower than it was at the start of this year, down in the mid- teens range,” he said.
Reporting By Maria Ajit Thomas in Bangalore; Editing by Joyjeet Das