NutriSystem Inc. (NTRI)

[NovoMira]

Ahead of the Bell: NutriSystem up on distribution

NutriSystem rises following Walmart distribution; analyst touts access to products

On 8:58 am EDT, Tuesday October 6, 2009

NEW YORK (AP) -- NutriSystem Inc. shares jumped 25 percent in premarket trading on Tuesday after the company said its weight-loss program would be available beginning this week at Wal-Mart stores.

NutriSystem said the retailer will begin selling its 14-Day starter weight loss program nationwide this week at more than 3,200 Wal-Mart stores. It will mark the first time Nutrisystem's products have been available at retail stores. The 14-day program costs $148 and gives consumers access to weight-loss counseling for 24 hours a day all week. It will also be available on Walmart.com.

Janney research analyst Mitchell B. Pinheiro said the distribution in Wal-Mart gives consumers access to NutriSystem's products on a much bigger scale. "We believe NutriSystem management continues to place the company in a position to benefit ultimately from a consumer recovery, with increased exposure and improved value through Schwan's, Costco and now Wal-Mart," Pinheiro wrote in a client note.

However, Janney doesn't expect this to boost results significantly in the fourth quarter because NutriSystem isn't going to market it heavily ahead of the holidays.

Janney kept a "Neutral" rating on the stock.

Shares of NutriSystem gained $3.68, to $18.73.