Today's story stock is NutriSystem Inc. (Nasdaq:NTRI). NutriSystem lowered its third-quarter forecast yesterday evening and the stocks has lost just about 1/3 of its value just this morning alone. 
The company had previously forecast that it would earn 77 to 82 cents per share in the third quarter, now it expects 62 to 66 cents per share. The company also lowered its revenue estimates from $200-$208 million down to $188 million. The average analysts estimate was for 82 cents per share in the quarter and $207 million.
NutriSystem cited a decline in business from new customers as the reason for the earnings warning. If you watch television very much at all, you certainly know that it isn't because NutriSystem doesn't run enough television ads. Constantly I am seeing ads with Dan Marino or Don Shula advertising the NutriSystem weight loss program.
Where does the company go from here? It's very hard to say. The company has been growing at a very quick pace for the last couple years, but it is now clearly showing a slowdown in growth. This will either be the sign of the company growing into a more mature company that has slower growth, or just the sign of a company that has become a fading diet fad. Given the fickle nature of dieters there certainly has to be some great concern about the future at NutriSystem.
Do you think the company will bounce back or do you think this is just the first sign of serious problems at the company?
To signup for a daily RSS feed from GrowYourFunds click here.
» Flat day so far for stocks from GrowYourFunds
The first half of today's trading has been very uneventful. The major indices all sit just a couple points above breakeven for the day. The Dow, Nasdaq, and S&P 500 are all higher by 2 points.The usually quiet utilities group is... [Read More]
Tracked on: October 4, 2007 11:09 AM | Permalink to Trackback