Nutrisystem Inc. NTRI reported first-quarter 2016 adjusted earnings of 13 cents per share, which beat the Zacks Consensus Estimate by 6 cents and surged 30% on a year-over-year basis. Adjusted earnings exclude 4 cents of initiative expenses related to the South Beach Diet and Shake360. Nutrisystem Inc. - Earnings Surprise | FindTheBestRevenues increased 18.1% to $162.1 million and edged past the Zacks Consensus Estimate of $152 million. Revenues also beat management’s guided range of $148 million to $158 million. The impressive performance was primarily driven by new customer growth, improved reactivation revenue ($40 million) and higher revenue per customer in the direct channel.Revenues from new customers in their initial diet cycle were up over 15% in the quarter, primarily driven by increased customer starts, improved pricing, higher Shake purchases and increased sales of more flexible options that the company is marketing.Adjusted EBITDA (excluding initiative expenses of $1.7 million for the South Beach Diet and Shake360) rose 21% year over year to $9.7 million.Total costs and expenses increased 19.3% from the year-ago quarter to $158.3 million, primarily due to higher marketing (up 24.5%) and cost of revenues (up 19.3%) in the reported quarter.This March, Nutrisystem in collaboration with Walmart WMT started a twelve week roll-back campaign which successfully drove increased sales volume and awareness.However, operating income declined 16.3% year over year to $3.8 million due to higher expenses.During the quarter, Nutrisystem authorized a share repurchase program, whereby the company may repurchase up to $50 million of its common stock over the next 18 months in open market transactions.GuidanceNutrisystem forecasts second-quarter 2016 revenues in the range of $145 million to $150 million. Adjusted EBITDA is expected in the band of $27.5 million to $29.5 million. Earnings are forecasted in the range of 48 cents to 53 cents, including expense of 2 cents related to South Beach Diet and Shake360 initiatives.Full-year 2016 revenues are forecasted in the range of $517 million to $532 million, up from the previous range of $505 million to $525 million. Management now expects reactivation revenues to grow in the double-digit range for full-year 2016.Revenues from retail channel are now projected at $36 million, up almost $1 million from the year-ago quarter.Adjusted EBITDA is now estimated in the band of $66.0--$70.5 million, up from the previous range of $62.5--$67 million.Earnings are now forecasted in the range of $1.17 to $1.27 per share, up from the earlier guided range $1.09 to $1.19. The guidance excludes the expected impact of the South Beach Diet and Shake360 initiatives (14 cents).Capital expenditures are still expected to be approximately $12 million to $14 million for full-year 2016, flat with the 2015 figure. Approximately $2 million to $3 million of this capital expenditure relates to the South Beach and Shake360 capital investment.For full-year 2016, Nutrisystem expects an improvement in gross margins on a consolidated basis, buoyed by higher average selling price and effective management of food and distribution costs.Zacks Rank & Key PicksCurrently, Nutrisystem carries a Zacks Rank #3 (Hold).Better-ranked stocks include Vista Outdoor VSTA and Central Garden & Pet Company CENT. While Vista Outdoor sports a Zacks Rank #1 (Strong Buy), Central Garden carries a Zacks Rank #2 (Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CENTRAL GARDEN (CENT): Free Stock Analysis Report NUTRI/SYSTEM (NTRI): Free Stock Analysis Report WAL-MART STORES (WMT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research