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Weight Watchers Reports Q2 2016 Results

Aug. 4, 2016 – “Our second quarter represents our third successive quarter of year-over-year member recruitment growth, keeping us on-track to deliver revenue and profit growth for the full year 2016. We are encouraged by our transformation momentum and the solid foundation we are building for 2017 and beyond,” said Jim Chambers, the Company’s President and CEO.

Revenues of $310 million and EPS of $0.46

North America business continues positive growth trend, with:

– End of Period Subscribers up 9% year-over-year

– Paid Weeks up 8% year-over-year

– Revenues up 5% year-over-year

– Global End of Period Subscribers up 5% year-over-year to 2.9 million

– Global Operating Income up 5% year-over-year to $74 million.

  • End of Period Subscribers were up 5.0% for Q2 2016 versus the prior year period, to 2.9 million, driven by continued recruitment growth in North America where End of Period Subscribers increased 8.6%, partially offset by declines in the United Kingdom and Continental Europe. Globally in Q2 2016, End of Period Meetings Subscribers were up 6.6% and End of Period Online Subscribers were up 3.8%, both driven by solid gains in North America.
  • Total Paid Weeks in Q2 2016 were up 4.2% as compared to the prior year period, with a Meeting Paid Weeks increase of 5.5% and an Online Paid Weeks increase of 3.1%.  These gains were driven by strength in North America where Total Paid Weeks grew 8.1% year-over-year, partially offset by declines in international segments.

Findings of Conference Call

Management reported that NACO performance was softer than expected, but still the best of any region. NACO revenues were up 5.7%, while the UK was down 9.4% and Continental Europe was down 9.8%. Advertising did not do well in the mid-May to mid-June period, but there was better recruitment through July. The firm had a 51.9% gross margin in Q2, up vs. 2015. WTW spent $41.2 mill. on marketing, and expects to spend $35 mill. in Q3, with total yearly spending flat vs. 2015. The company expects revenues in 2016 of just under $1.2 billion, $20 mill. less than earlier forecast. The company has $114 mill. in cash on hand, expected to rise to $150 by year-end. The meetings business has been outperforming online business. WTW has a new B2B  New York City partnership, where city employees ge the program at a reduced fee. For the year, the firm expects NACO revenues to be up in the high single digits, while the UK will be down in the low double digits and the rest of Europe down in the mid single digits.

Complete press release and financial tables can be found here:


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