Advertisement

Jenny Craig Reports Loss; 30 Weight Centers to Close : Fitness: The company sustained a $15.3-million operating loss in the third quarter amid signs that Americans are shunning diets and exercising less.

Share
From Times Staff and Wire Reports

Jenny Craig Inc. reported a third-quarter operating loss of $15.3 million Friday and said it will close more than 30 company-owned Jenny Craig Weight Loss Centres.

The Del Mar-based company said the loss for the quarter ending March 31 includes a $12.9-million pretax expense related to closing the centers. In the third quarter of 1993, the company had an operating profit of $17 million.

For this year’s third quarter, the company reported a net loss of $8.7 million on revenue of $96 million, contrasted with a $10.5-million profit on revenue of $130.8 million in the same quarter in 1993.

Advertisement

Closing the centers is part of the company’s ongoing review of its cost structure and represents a commitment to be more efficient, said Ron Iori, a spokesman for Jenny Craig.

Founded in 1983, it is one of the largest weight management companies in the world with about 800 company-owned and franchised centers in the United States, Australia, New Zealand, Canada, Mexico and Puerto Rico.

But Jenny Craig’s fortunes have been sliding for at least a year, amid signs that Americans are shunning diets and exercising less. In December, the company reported that the number of new participants enrolling in its weight loss programs declined by half.

The company is viewed on Wall Street as a possible takeover target.

On Thursday, CNBC’s Dan Dorfman reported that Arthur Goldberg, chief executive of Bally Manufacturing Corp., bought 350,000 shares of Jenny Craig for about $2.4 million, or $6.86 a share.

Dorfman said those shares represent 1.3% of shares outstanding. He said Goldberg told him that he isn’t planning to try to take over Jenny Craig and that Goldberg bought the shares in part because he thinks the stock’s price might double in a year.

Jenny Craig’s shares closed at $7.25 on Friday in trading on the New York Stock Exchange.

More than 60% of its stock is controlled by founders Sid and Jenny Craig.

Advertisement