May 5, 2015 – The company reported another grim quarter of results, as its slide continues.
Q1 2015 revenues were $322.1 million, down 21.3% (16.0% on a constant currency basis) versus the prior year, with total paid weeks down 18.9%. First quarter 2015 net loss was $5.4 million versus net income of $21.5 million in the prior year.
This decrease was primarily driven by lower revenues in North America. Q1 2015 total paid weeks were down 18.9% as compared to the prior year period, with an Online paid weeks decline of 21.4% and meeting paid weeks decline of 15.7%. These declines were driven by lower active subscriber bases at the start of the quarter and lower recruitments in the quarter for both the meetings and Online businesses versus the prior year.
First quarter 2015 service revenues for the UK were down 10.8%, and Q1 service revenues for Continental Europe (CE) were down 4.7%. Why is Europe doing better than NACO, we wonder?
The company also acquired another fitness app developer, Hot5, San Francisco. This comes on the heels of another acquisition, in April, of Weilos (for single digit million $).
Marketdata Commentary – Conference Call Details
Nothing to see here folks…move along, just a train wreck. What wasn’t mentioned in the press release or the conference call is that two key managers have recently left the company: Michael Echenberg (Strategic Mktg. Mgr.) left for Care.com and the VP of North American Operations, Lesya Lysyj, also resigned or was let go. No replacements mentioned. Staff is getting off the Titanic before it sinks. CEO Jim Chambers said that the 18 month “transformation” is taking slower than anticipated, and they will not return to growth anytime soon. Also, a “new program innovation” is being planned for the 2016 diet season. So, we have to wait 8 month before we see any change. Why not roll it out sooner? News flash guys–you need help NOW, not in 8 months! So far, the firm has acquired three fitness/diet app development companies, probably for $10+ million total. Rather than jumping on the fitness app bandwagon too late, they could have spent that money on developing custom programs for various dieter types, retrained group leaders, invested in new retail partners, and more. Focus is on the wrong things. We just don’t see any improvement in the company until Mr. Chambers is gone, plain and simple.
Complete details and financial tables can be found here:
http://finance.yahoo.com/news/weight-watchers-announces-first-quarter-200500569.html