Nov. 6, 2024
WW (Weight Watchers) reported results for the 3rd quarter 2024 today.
“For over six decades, Weight Watchers has been the trusted leader in weight management, offering a full spectrum of science-backed, proven weight management solutions. With our expanded clinical offering, iconic trusted brand, and global community of members, we are well-equipped to succeed in today’s rapidly evolving market,” said Tara Comonte, Interim CEO. “We do, however, have significant work to do to better unify our solutions and enhance our member experience. I am fully committed to leading our team through this next phase, as we seek to drive meaningful progress in these strategic priorities and return the Company to sustainable growth.”
Q3 results:
End of Period Subscribers of 3.7 million
Revenues of $192.9 million
Gross margin of 67.1%; adjusted gross margin of 69.1%
Operating Loss of $39.0 million; adjusted operating income of $35.7 million
End of Period Subscribers in Q3 2024 were down 8.8% versus the prior year period, driven by declines in the Digital and Workshops + Digital businesses reflecting year to date recruitment declines. Q3 2024 End of Period Clinical Subscribers of 78 thousand increased 71.5% versus the prior year period.
Total Paid Weeks in Q3 2024 were down 7.4% versus the prior year period driven by declines in the Digital and Workshops + Digital businesses. Total Paid Weeks benefited from growth in Clinical Paid Weeks.
Cash balance as of September 28, 2024 was $57.2 million.
The company is reiterating its following full year fiscal 2024 guidance: Year end total subscribers of at least 3.1 million; and revenue of at least $770 million.
The complete press release, with financial tables, can be found here:
https://finance.yahoo.com/news/ww-international-inc-announces-third-120000755.html
Conference Call Information
Management reported that its clinical business will not represent a significant part of their total, but it’s considered to grow and be a larger opportunity over the long term. The company now has 78,000 clinical subscribers and they generated $19 million in Q3 revenues. Management said that awareness of its clinical business is still low, and they will be working on improving that. Clinical subscribers have a lower average tenure than their non-medical clients – 7.5 months vs. 10-11 month. Management said that customer acquisition costs have been high this year, due to competition for ads by election entities and others. The company spent $44 million on marketing in Q3. Regarding plans using the GLP-1 drugs, WW added compounded drugs to their offering.
DietBusinessWatch/Marketdata Commentary
The number of clinical subscribers stands at just 78,000, far below earlier year projects of 160,000. The company basically had to add compounded weight loss drugs, since 45% of their clinical clients were being denied coverage by their insurers. They had no choice. Staying with only the high cost, brand name drugs would severely limit the number of customers they could sign up. Also, what the heck is happening in overseas markets in Europe? No information provided. The ranking of who is the largest weight loss competitor will shift again if WW generates $770 million. This will surpass Medifast’s projected $590-600 million in revenues.