First came the low-carb diets. Then came the low-carb foods.

Both developments have been bad news for Woodbury, N.Y.-based Weight Watchers International Inc., purveyor of a group-based dieting method that emphasizes controlling calories, not carbohydrates.

There have been an estimated 1,500 low-carb products introduced in the past two years, according to Daisy Whitney, editorial director for Low Carb Biz, a Denver-based magazine. Products such as Carb Options Blue Cheese Dressing by Wish Bone and Mueller's Reduced Carb Penne Rigate pasta promise the same taste with fewer carbohydrates.

Low-carb diets, such as Atkins and South Beach, have peaked, Weight Watchers International President and Chief Executive Officer Linda Huett said during a May conference call with investors. But now Weight Watchers International struggles to compete with low-carb food products, and the millions in advertising dollars that food companies have spent on them, Huett said.

"Unfortunately, this explosion in low-carb products and the intensity of this campaign has created a perception among many that weight loss can be achieved by simply substituting some of what you normally eat and drink with low-carb equivalents. For many, that thought is enticing: 'I can lose weight without even dieting.' It's the equivalent of the magic bullet," Huett said.

"The effect of this is that a large number of overweight people have moved away from structured calorie-restricting weight- loss programs and are doing their own diet in an unstructured way, focusing on reducing carbs by eating low-carb foods," Huett said. "The truth is calories count."

The effect on Weight Watchers International is reduced attendance at weekly group meetings, the centerpiece of the weight-loss program.

Without including attendance from recently acquired centers, attendance at North American company-owned centers declined 4 percent in the first quarter of 2004, compared to attendance at the same centers a year earlier. Including acquisitions, attendance increased 11.8 percent. The company expects a percentage decline in attendance (without recently acquired centers) in the low teens through the summer.

Investor confidence appears shaken as well. From the beginning of the year through June 15, the company's stock has fallen 5.11 percent, while the S&P 500 Index has risen 2.9 percent.

Legg Mason downgraded its stock rating for Weight Watchers International from "buy" to "hold" in May because there is no "near-term catalyst" to spur company growth.

Huett said people will return to Weight Watchers when they realize low-carb foods aren't leading them to slimmer selves.

"This is a sad situation when you realize these people have little chance of achieving real weight loss since they are simply replacing their normal foods and drinks with premium-priced low-carb versions of bread, pasta, chocolate, beer, often with the same caloric content," Huett said.

"In time, when they realize that their waistlines are not shrinking, they will be looking again for a proven effective and livable weight-loss program and none has a higher reputation for providing such a program than Weight Watchers."

Taking off the pounds

New City resident Patty Trout agrees. Weight Watchers has helped her lose 40 pounds in just over a year.

"If you stick to it, it does work," said Trout, 44, who first used Weight Watchers to help her lose 80 pounds after she graduated from college.

"I kept it off for many years. Having a child and getting older, I put it back on," said Trout, a physical therapist at the Jesse J. Kaplan School in West Nyack. She said she ideally would like to lose 60 more pounds.

Trout returned to Weight Watchers last March because she was not feeling well, emotionally and physically. "I have a 6-year-old. I want to live to see him do things," said Trout, who walks 3 miles at least five mornings a week.

As part of the Weight Watchers diet plan, called FlexPoints, Trout gets 28 points of food a day, which she tracks using a checkbook-like ledger. At the start of each day, she writes down 28, then subtracts points as she eats.

The Weight Watchers diet assigns a certain number of points per food serving. A scoop of ice cream is four points. A Lean Cuisine Chicken Marsala frozen dinner is three points.

Each Weight Watchers user is assigned a number of daily points, based on their weight, and 35 points to use anytime throughout the week.

"If you want to waste them all on a 25-point dinner, you could conceivably do that," Trout said.

Trout said the better she tracks her points, the more successful she is at losing weight.

Trout carries a Pocket Points Guide that gives points for a single serving of hundreds of foods. It also has a key to help users figure out what a serving looks like. One serving of rice or pasta is about the size of a tennis ball, while a single serving of meat is about the size of a cassette tape.

As part of her weight-loss plan, Trout attends Weight Watchers meetings in Nanuet nearly every week.

Weight Watchers' meetings are held mainly at rented spaces in community centers, churches and civic organizations, as well as at storefront offices. There are approximately 18 meeting places in Westchester County, three in Putnam County and five in Rockland County.

Trout pays $8.99 for each meeting, which begins with a weigh-in, then a group discussion about weight-loss challenges and tips for success.

Trout said her next weight-loss goal is to lose 40 pounds by December. And her plans do not include lowering her intake of carbohydrates, but rather eating lower fat, higher protein foods.

"I really don't believe in the low-carb diet. I don't think people can do it on a long-term basis," Trout said.

But low-carb still has high appeal, according to Whitney of Low Carb Biz, which began in July 2003. She said the magazine conducted a study in December that found about half of all adult Americans are cutting back on their carbohydrate intake or plan to this year. "I think they are struggling because low-carb is a more appealing diet for most people," Whitney said about Weight Watchers. "You get rid of the junk and processed foods."

Fighting back

Weight Watchers International is hoping to hold onto members like Trout and attract even more users through a three-part plan Huett outlined in May:

•Improving effectiveness of marketing.

•Concentrating on service quality.

•Improving appeal of program.

Huett said Weight Watchers International will introduce a new program this fall, just about a year after its last innovation, FlexPoints. Typically, the company introduces a new program every two years.

"FlexPoints has performed well in a very difficult environment," Huett says. "But we believe that new insights upon which the upcoming new innovation is built has the potential to appeal to a wider audience. We also believe it will be able to cut through the clutter in this crowded environment."

Huett declined to offer any details about the new plan, but she did say, "Rest assured, it is not a low-carb diet."


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