Freestyle fueling stock growth of Weight Watchers

Weight Watchers International’s new Freestyle program, which lets members eat as many beans and eggs as they like, is giving it an edge over rival Nutrisystem Inc.

The weight-loss company backed by Oprah Winfrey posted stronger-than-expected earnings last quarter — and gave an upbeat forecast for the coming year — after the Freestyle rollout attracted more customers. That sent the stock up as much as 10 percent to $77 on Wednesday.

Nutrisystem, meanwhile, is facing headwinds after a marketing flop during the key diet season. Advertising that ran after the New Year’s holiday was hurt by lower ratings on CNN and Fox News. The company’s shares had slipped 40 percent this year through Tuesday, pulled down by an earnings forecast that fell well short of Wall Street expectations.

The Weight Watchers comeback began when Winfrey bought a stake in the company and agreed to pitch the brand in October 2015. In addition to the marketing boost from the media mogul, upgrades to the Weight Watchers program are helping drive the turnaround, Chief Executive Officer Mindy Grossman said in an interview.

“We’re moving from just talking about weight to all of health and wellness,” she said. “That’s very different than just selling things to people.”

Earnings amounted to 37 cents a share in the fourth quarter, excluding a tax benefit. Analysts had projected 31 cents. Revenue came in at $312.5 million, compared with an average estimate of $309.5 million.