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Weight Watchers Reports Q4 and 2014 Results

Feb. 26, 2015 – The news was not good, again.

Total year 2014 sales of $1.479 billion.  Fiscal 2014 revenues decreased 14.2% versus the prior year. This decrease was primarily driven by lower revenues in North America.

Online revenues (WW.com subscribers) of $437 mill. (-16.7%)

Planned $100 million cost reductions (staff layoffs).

Expected 2015 revenues to decline further to $1.2 billion.

Q4 2014 revenues of $327.8 million, down 10.4% versus the prior year period, with total paid weeks down 7.0%.

Q4 2014 revenues decreased 7.9% on a constant currency basis versus the prior year period. This decrease was primarily driven by lower revenues in North America. Q4 2014 total paid weeks were down 7.0% as compared to the prior year, with an Online paid weeks decline of 7.2% and meeting paid weeks decline of 6.8%.  These declines were driven by lower active subscriber bases at the start of the quarter and lower recruitments in the quarter for both the meetings and Online businesses.

Marketdata Commentary

We were not surprised by the poor company performance just reported. In the conference call by CEO Jim Chambers it was mentioned that the new personal coaching service launched for the new diet season had only a 3% penetration rate–not very good traction at all, as we had predicted. The price of this service is too high. This, no doubt, along with the grim forecast of another forecast double-digit revenue decline for 2015, was more than enough to beat the stock price down severely. The firm tried to cheer things up by touting the deal with Humana, but it’s clear that the company has MAJOR work to do to turn around this off-course ship. The big question is whether Mr. Chambers is the one to do it. So far, his stewardship has been a disaster.

Complete press release and financial tables found here:



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