June 16, 2020
As of this morning writing on June 16, WW stock (WW) is up nearly 17%, due to positive news.
WW issued an update on its Q2 fiscal 2020 trends to date, which reflects a strong digital business, courtesy of the social distancing and the company’s focus on digital transformation.
As of Jun 6, 2020, WW International had 4.9 subscribers, reflecting a 7% rise from Jun 8, 2019. This includes 3.8 million and 1.1 million digital and Studio + Digital subscribers, respectively. Notably, weekly Digital recruitment trends reverted to growth starting mid-April and have been accelerating since then. In fact, the weekly recruitment growth rate is now moving ahead of the pre-pandemic level of first-quarter fiscal 2020.
Thanks to the rise in digital recruitments, total global recruitments also reverted to growth (on a weekly basis) from mid-May. The shift in recruitment mix shows strength in the Digital business, including about 90% of recruits since mid-March. Meanwhile, the Studio + Digital business is still seeing significant recruitment declines (on a weekly basis) in comparison with the year-ago period. Management notified that member retention rate presently remains more than ten months.
Management expects to see a year-over-year jump in Digital Subscription revenues, as a percentage of the revenue mix, in the second quarter. Revenues coming from Studio subscriptions and in-Studio products remain under pressure in the second quarter due to a halt in in-person workshops and lower Studio-related revenues.
WW International also noted that it has started reopening Studio locations in a phased manner and anticipates reopening about 400 U.S. locations by June-end.
New 2020 Status Report of The Weight Loss Market Published
Marketdata just released a new 65-page report: “Status of The U.S. Weight Loss Market: Effects of The Pandemic”. ALL segments of the market are covered, with 2019 results/revenues, analysis of effects of Covid-19, and a full-year 2020 forecast. It sells for $595 and can be purchased at Marketdata’s website, report FS72.
A few findings:
- Marketdata estimates that the total U.S. weight loss market reached new highs of $78 billion in 2019. However, with shut-downs that began in March, the market is expected to decline 9% in value to $71 billion this year. Some market segments have actually prospered.
- Commercial chains… Revenues of the major commercial weight loss chains such as WW, NutriSystem, Jenny Craig, Medifast and others are forecast to dip 2.3% to $3.9 billion in 2020. WW Intl. and Medifast are expected to post the best results, while Jenny Craig may be hardest hit.
- Meal replacements (shakes, nutrition bars)… Meal replacements and OTC diet pills sales are forecast to grow by 5.4% this year, to $5.25 billion–with meal replacements growth outpacing diet pills. These products have largely escaped effects of the pandemic due to their price, easy availability at grocery and convenience stores, and MLM channels, which remained open during the pandemic.
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