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Weight Watchers Reports 3rd Quarter Results

November 2, 2023

WW reported results for its 3rd quarter.

Management reported that: “We have successfully returned WeightWatchers to subscriber growth, with Q3 end of period subscribers up 6% year-over-year to 4.0 million. This is a significant achievement and a direct result of our work in reinvigorating our core product,” said Sima Sistani, the company’s CEO. “Clinical subscribers ended the quarter at 45 thousand, up 23% from Q2. We are encouraged by the trends across our business and we expect to end the year with total subscribers slightly above 3.7 million, representing the best seasonal slope in the Company’s reporting history.”

  • End of Period Subscribers of 4.0 million
  • Revenues of $214.9 million
  • Gross margin of 66.0%; excluding the net impact of restructuring charges, adjusted gross margin of 66.2%
  • Operating Income of $30.6 million; excluding the net impact of restructuring charges, adjusted operating income of $36.6 million
  • Full Year Fiscal 2023 Guidance: Revenues are expected to be at the low end of the previously provided range of $890.0 million to $910.0 million.
  • Cash balance as of September 30, 2023 was $107.5 million

The complete Press Release with financial tables can be found here:


Conference Call Findings

Management reported that their marketing spend for the quarter was $48 million and for the full year, it’s expected to be $240 million. They also reported that subscribe activation and engagement rates were up in Q3. Customer retention period is 10 months.  Regarding the Sequence program and usage of GLP-1 medications, there are still shortages of these meds, with no significant change since Q2. Management expects revenues from this new clinical business to total $30 million for 2023 (from Q2 to Q4). Insurance denial is still a major issue, but management says that their approval rate is in the range of 30-35%, which is better than the industry average of 20-25%. The consumer products revenue, a line that’s being phased out, will be $50 million less next year. Management also said that 41% of subscribers are now choosing a 9-month plan. The B2B business, formerly called Health Solutions, is now called Weight Watchers for Business., provided by the Pathway platform.

Marketdata/DietBusinessWatch Commentary

The news seems to be slightly positive, but we wonder jut how much the new clinical business (Sequence) will contribute to company revenues. $30 million for this year only represents about 3.3% of total company revenues (granted that it’s not a full 12 months of sales). We’re just not so sure this will be the big boost many were expecting, even if drug supply shortages disappear. Will consumers interested in a medical weight loss program go to WW, or will they just go to their physicians, or the numerous medical weight loss clinic chains and franchises that have been in this market longer? That remains to be seen. In addition, the low insurance approval rate of 30-35% is another headwind that will not likely improve over the next year. The company still must grow its main, non-drug program subscribers to return to significant growth.

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