February 20, 2009, 12:00 AM

Revenue at diet products retailer NutriSystem drops 11.4% in 2008

Revenue fell 16.5% in the fourth quarter, and the company attributed the disappointing results to consumers cutting back on discretionary spending as the economy worsened. Nearly 80% of its orders in 2008 came from the web, the retailer says.

NutriSystem Inc., a retailer of meal plans for dieters that sells mainly through the web, reported double-digit decreases in revenue for the fourth quarter of 2008 and the entire year.

For all of 2008, revenue decreased 11.5% to $687.7 million from $776.8 million in 2007. Net income declined to $46.3 million from $104.2 million, including a $9.5 million write-down of an investment in water-filtration system ZeroWater.

For the fourth quarter, revenue came in at $114.6 million, 16.5% less than $137.2 million in the same period a year earlier. The company reported a Q4 net loss of $3.3 million, including $6.8 million of the ZeroWater write-off, compared with net income of $10.5 million in Q4 2007.

“2008 was a tumultuous year for the economy, which clearly impacted consumers’ discretionary spending,” says chairman and CEO Joe Redling. “While 2008 full year revenues declined, this was compared to a record setting 2007 and we remain confident in the long term viability of our business, our brand and our business model.”

Redling told analysts during a conference call this week that the retailer had revamped its web site in 2008 and that consumers were staying longer and converting more frequently on the new site. He said close to 80% of the retailer’s orders last year came from the web, “so that really is our core transaction vehicle.”

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