Weight Watchers (WTW)

IPO price:

$24

Share price now:

$29.50

Change:

23%

Volume:

13.2 million shares

52-week high:

N/A

52-week low:

N/A

Forward P/E before announcement:

N/A

Forward P/E after announcement:

N/A

THEY AREN'T THE folks you'd expect to have their cake and eat it too but, oh, what a feast it was Thursday for Weight Watchers (WTW).

Moments after Linda Huett, the diet chain's chief executive, rang the opening bell on the floor of the New York Stock Exchange, Weight Watchers brass watched as the shares of its initial public offering fattened up by more than 20%, from $24 to over $29, in a matter of minutes. The stock finished the day up 23% at $29.50. While most people may know the company from its television ads featuring the Dutchess of York, Sarah Ferguson, Weight Watchers is also something investors hunger for a moneymaker.

Last year, the company, which runs local diet centers, reported revenue of $488.2 million, according to a Nov. 9 filing the company made to the Securities and Exchange Commission. Through the first nine months of 2001, the company says its revenue rose 25% from last year and that operating income swelled 46%. The filing also outlines an aggressive growth strategy expanding in major markets, building in less-developed places like Germany and Spain, focusing on broadening its product lines and other steps. It also helps to have a popular brand. The company cites survey data that show 97% of women in the U.S. recognize the Weight Watchers name.

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"In 2000, our operating income margin was over 25%, while our capital expenditures were less than 1% of revenues," the company wrote in the Nov. 9 SEC filing. "Because we can add additional meetings with little or no capital expenditures and our members typically pay cash at each meeting or prepay for a series of meetings, we require little new capital to grow."