Shares of Nutrisystem Inc Experiencing Two-Day Plunge

Nutrisystem Inc

Nutrisystem Inc (NASDAQ:NTRI) is the latest company to experience the consequences of a failed marketing campaign.

Launching a marketing campaign is a great way for any company to put itself on the map. This isn’t always easy, however. It takes a lot of planning, and it is vital for a company to hit all the necessary steps in order for its campaign to resonate with viewers. If it fails to do so, its business might experience a few downfalls.

If you don’t agree? Think back to the Kendall Jenner Pepsi (NASDAQ:PEP) commercial or H&M’s (OTCMKTS:HNNMY) latest advertisement. That said, it’s not just Pepsi and H&M that have gone through something like this.

What Did Nutrisystem Inc Do Wrong?

On Monday, February 26, Nutrisystem Inc. forecasted lower-than-expected profit and revenue for 2018. Its earnings were marginally in line with analysts’ expectations, but it was Nutrisystems’ full-year forecast that caused the stock to commence its current two-day decline. The weight loss solutions provider disclosed that it forecasts 2018 profit to come in between the range of $1.99 to $2.09 a share on revenue between the range of $685 million to $705 million. For perspective, the Street was expecting the company to report earnings of $2.34 a share on sales of $791.6 million.

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What Caused the Lower Full-Year Forecast?

According to CEO Dawn Zier, the brands’ diet season got off to a “slower than expected start” due to its failed marketing campaign. For those who don’t know, the Pennsylvania-based company relies heavily on New Year’s resolutions to lure customers into its brand. However, this year, customers didn’t seem to relate to Nutrisystem’s marketing campaign. It is for these reasons Nutrisystem “failed to generate more new customers.”

The Stock

After news broke yesterday, the company’s’ stock closed at $39.90. It then dropped as much as 27% in after-hours trading. Nutrisystem might have been hoping that today’s trading session might be a little different, but as of right now, a turnaround does not appear to be on the horizon. Currently, Nutrisystem is trading at $31.06. This puts the stock down $8.85, or 22.17%.

The Takeaway

I think we can all take a lesson away from Nutrisystem’s failed marketing campaign. If you hit the nail on the head, your company is likely to reap benefits. However, if your campaign raises questions or doesn’t resonate with viewers, you’re bound to see some sort of downfall.

It could just be me, but I think there will be a number of businesses reviewing their advertising strategies today.

Featured Image: Twitter