NutriSystem, Inc. Q2 2009 Earnings Call Transcript

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2009-07-29 15:29:21.0

Tags: Call Transcript, Business, Earnings, Citigroup Inc., NutriSystem Inc., TVs, Tv & Home Theater, Sales Strategy, Personal Technology, Home Entertainment, Sales, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Gregory Badishkanian – Citigroup.

Gregory Badishkanian - Citigroup

On the diabetic program, if you could just walk through, I know you've given some statistics, but just how big do you think this could be as a percentage of total sales.

Joseph M. Redling

It's a little early for us to forecast that. What I will say is it is having an impact on our overall mix in terms of gender, male and female, and the early indications are it could be a significant part of our business.

I look at this and if you look at the size of the market and the way it's been performing, the actual contribution to our business could be as large as our men's business because the numbers are about the same.

What we don't know to date is, we still are in the early stages. It's a launch period. So the real question is does this fall off a bit after the new news wears off. So that's what we have to monitor.

But the early response has been really strong.

Gregory Badishkanian - Citigroup

Are you currently using the recent studies that you talked about in your marketing?

Joseph M. Redling

Yes, in fact, I mentioned in the comments that we don't, in our current amortizing we had no promotional offers in our television executions or print executions, and that's because we believe the claims are so powerful that it's driving a lot of interest and it was important to establish this as a truly efficacious product out of the gate.

So we're getting a tremendous amount of interest and that interest continues to stay pretty strong and we're testing a variety of different media levels in terms of the various channel mixes to try to optimize it.

But what's encouraging is the response was relatively immediate. So as soon as we launched the program, we saw an immediate response. And it's been pretty steady for the last six or seven weeks.

So we are encouraged by it. I think it will be a pretty strategic part of our business going forward.

Gregory Badishkanian - Citigroup

With the economy clearly having an impact on the overall consumer, obviously it's had an impact on your business, is there any way to break out how or determine what the actual impact from the weaker economic environment is on your business?

 

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