Nutrisystem 2Q Sales, Earnings Skyrocket

HORSHAM, Pa.—Nutrisystem Inc. (NASDAQ:NTRI) reported huge gains for its second quarter, including more than tripled revenues and quadrupled earnings. Revenues jumped to $132.6 million from $40.9 million sold in 2Q a year ago; earnings soared to $19.8 million or $0.53 per share from $4.3 million or $0.12 per share earned a year ago.

“We’re excited about the progress we’ve achieved thus far in reaching the male market, and the men’s segment represented over 21 percent of all new customers in the second quarter,” said Michael J. Hagan, chairman and chief executive officer (CEO), noting second quarter is usually a slow season. “This has exceeded our expectations, and with the recent announcement that Hall of Fame quarterback Dan Marino has joined our team, we’re even more optimistic about our ability to further penetrate this largely untapped market.”

Management reported the company (www.nutrisystem.com) tripled its marketing spending during the quarter while maintaining a high level of cost effectiveness. “We believe marketing of the men’s program raised our overall customer acquisition cost in this quarter; but, we generate more revenue per customer from men, more than offsetting the higher customer acquisition cost,” explained James Brown, chief financial officer. “For female program customers, we believe the customer acquisition cost was lower in the second quarter this year than the same period last year.”

Despite the huge gains, shares of NTRI fell 15 percent following the July 24 announcement that George Jankovic has resigned as president and chief operating officer, citing personal reasons. Hagan will assume the additional title of president.