Nov. 2, 2020
According to Mindy Grossman, the company’s President and CEO: “We ended the quarter with 4.7 million subscribers, marking a new record for a third quarter close. We accelerated initiatives that were already underway to create a truly differentiated, tech-enabled, member experience. Building on the massive success of the m yWW food program, we are thrilled for the upcoming launch of our newest innovation myWW + which offers even deeper personalized insights and new app features to deliver an enriching and fully interactive member experience.”
- Q3 2020 End of Period Subscribers up 5% year-over-year to 4.7 million, an all-time Q3-end high
- Q3 2020 End of Period Digital Subscribers up 23% year-over-year, an all-time Q3-end high
- Q 3 20 20 Revenues of $3 21 million, down 8 % , or 9% on a constant currency basis, year-over-year due to anticipated declines in the Studio + Digital business
- Q3 2020 Gross Margin of 59.3%
- Service Revenues in Q3 2020 were $282.3 million. Product Sales and Other in Q3 2020 were $38.4 million. Cash balance as of September 26, 2020 was $204.4 million.
For the first 9 months of the year:
- Total revenues were down 2.4% to $1.05 billion
- Digital subscription revenues were up 17.7% to $541.8 million
- Studio and digital fees were down 21.8% to $360.2 million
- North American revenues were down 3.1% to $749 million
- Continental Europe revenues were up 4.3% to $224.6 million.
- UK revenues were down 9.5% to $72 million.
The complete press release and financial tables can be found here:
Conference Call Findings:
In a conference call with analysts, WW management said that it will launch the new Digital 360 program using artificial intelligence in December in the U.S. and UK, based on Oprah’s 2020 vision tour. They will use a new generation of coaches catering to Millennials, with premium content, podcasts and videos. The program will be rolled out to all markets next Spring. In 2021 WW will introduce a personal coaching program as well.
Digital revenues are now twice that of Studio revenues. WW has 80% margins on its digital business. Q4 marketing spend will be $50 million higher than the same period of 2019. The firm has a $100 million cost saving plan in place. WW acquired the Arizona franchise during the quarter. Virtual workshops will be available 24/7. The number of retail studio sites has been cut to 650 (from 800), as WW shifts to a more variable operating model and reduces it real estate footprint. The company will be forming life-stage and Spanish speaking groups.
Management further reported that it will partner with CVS via a Welltouch program. The firm gets about $60 million from its Health Solutions business (employer healthcare programs). Marketdata Note: This business has been stuck at the $60-75 million level for at least five years that we know of, focused on the affiliation with Humana.
The new marketing program highlighting changes for 2021 will begin on Dec. 26th. The current pandemic is anticipated to continue hurting the Studio business, with an estimated $50 million headwind in 2021, and no 2020 full-year guidance is being given.