May 2, 2024
Management reported that:
“We delivered solid performance in the first quarter with end of period subscribers of 4.0 million, improved retention and engagement in our core business, and continued strong growth in our clinical business with 91 thousand end of period clinical subscribers,” said Sima Sistani, the Company’s CEO. “We continue to expect to end the year with total subscribers in the range of 3.8 million to 4.0 million, including between 140 thousand and 160 thousand subscribers to our new WeightWatchers Clinic. We are executing on our plan by returning WeightWatchers to profitable growth while transforming our business model for the future.”
“We are maintaining our revenue guidance for 2024, including a return to year-over-year growth in subscription revenues,” said Heather Stark, the Company’s CFO…”
Revenues in Q1 2024 were $206.5 million, topping analysts’ expectations. On a constant currency basis, Q1 2024 revenues decreased 14.9% versus the prior year period. Subscription Revenues in Q1 2024 were $204.1 million. Gross Profit in Q1 2024 was $137.8 million, compared to $119.5 million in the prior year period. Gross Margin in Q1 2024 was 66.7%, as compared to 49.4% in the prior year period. Net Loss in Q1 2024 was $347.9 million compared to net loss of $118.7 million in the prior year period.
Maintaining previously provided revenue guidance range of $830.0 million to $860.0 million, reflecting a $55 million year-over-year headwind from the strategic decision to wind down the Company’s low-margin consumer products business.
Operating loss is expected to be in the range of $163.7 million to $153.7 million;
Conference Call Information
Management said that they want to grow their B2B business with employers and large healthcare plans, with the goal of WW being a covered benefit. The firm spent $90 million on marketing in Q1. The retention rate for subscribers is now more than 11 months. Not much else new to report.
Marketdata/DietBusinessWatch Commentary
Regarding the goal of growing the B2B business, we’ve heard this many times before. At it’s peak, this segment generated about $75 million per year. With some effort, we think this level can be reached, probably more. Since the GLP-1 drugs cost so much, there has been a lot of pushback from insurers. But if the non-medical WW program were to be a covered benefit, this would be a significantly less costly option for employers and insurers, and thus attractive to them. Unfortunately, WW does not report what’s happening in its European markets any longer. It would be nice to know if the situation there is any different than in the U.S.
For More Information About The U.S. Weight Loss Market…
Marketdata LLC has just published a new analysis of the weight loss market: “The U.S. Weight Loss Market: 2024 Status Report & Forecast”, March 2024, 107 Pages.
Some findings:
- Obesity medications.. This market for prescription drugs in the U.S. more than doubled in 2023, from an estimated $5.1 billion in 2022 to $11.9 billion in 2023 as demand continued to soar for drugs such as Novo Nordisk’s Saxenda, Wegovy and Ozempic, as well as the entry of new drugs such as Mounjaro and Zepbound into the market.
- Medical weight loss programs and services were estimated to be worth $21.0 billion in 2023. This is the highest share of the market posted since 1989. Medical programs are provided by independent physicians (incl. bariatricians), clinics, hospitals, and medical weight loss franchises.
This new Marketdata report presents a wrap-up of 2023 performance for the U.S. weight loss market during the obesity drugs market explosion and a forecast for 2024. The value of the total market is estimated to have grown to a historic peak of $90 billion in 2023, boosted by soaring sales of the popular prescription GLP-1 weight loss drugs. This is a paradigm shift to medical programs, and a major challenge for competing commercial diet companies, which lost $1 billion in revenues since 2022.
GLP-1 drugs are a game changer in terms of the number of medications now on the market, plus others to come in the next several years. They have affected dieter behavior and how commercial diet companies operate. Nearly all non-medical segments of the market have felt the pain of declining sales, and 26,500 weight loss coaches have lost their jobs. However, more physicians are adding weight loss to their practices, bariatric surgeries are hitting new highs, and caseloads/revenues at medical weight loss franchises and at bariatricians are growing.
The report includes in-depth analyses of: 2020-2023 market/revenue performance, recent competitor and market developments, current dieter trends, diet company advertising spending, and a new analysis of the number and salaries of weight loss coaches in the industry. Special emphasis and analysis on the obesity drugs market, risks, what could derail the market, and why there is a wild west environment emerging – problems with using cheaper compounded drugs that are not FDA-approved.
Individual Status Reports and the Effects of the obesity drugs boom on operations and revenues, for ALL major weight loss market segments… diet soft drinks, artificial sweeteners, health clubs industry, commercial weight loss chains, retail meal replacements and retail appetite suppressants, medical programs (physicians, hospitals/clinic programs, prescription diet drugs, bariatricians, weight loss surgeries), and low-calorie dinner entrees.
Includes profiles/updated outlooks for: WW, NutriSystem, Jenny Craig, Medifast, Herbalife, Glanbia (Slim-Fast), Noom, Simply Good Foods (Atkins), HMR Boston, Lindora, and Profile by Sanford. Marketdata analysis of company strategy, conference calls.
Order This Report
Go to marketdataenterprises.com, Choose Buy Reports tab on home page for online store, go to page 4 of store listings to find this study, add to basket and pay, checkout. Price: $895. Or, call us at: 813-971-8080 and charge it. Table of Contents available at the Studies page, choose Services tab on home page, then Diet Market – Our Specialty.