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.