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WW Reports Q1 2021 Results

May 6, 2021

Weight Watchers reported its 1st quarter performance yesterday.

“…WW had a strong start to the year, ending Q1 with 5.0 million subscribers, record Digital subscribers, and member retention remaining at an all-time high of over 10 months,” said Mindy Grossman, the Company’s President and CEO. “…Our continued digital transformation to a personalized, technology experience company was clearly evident in our first quarter results with our high-margin Digital membership growth driving performance and positioning us for subscriber, revenue and profit growth over the balance of 2021.”

  • End of Period Subscribers in Q1 2021 were down 1.5% versus the prior year period, driven by declines in End of Period Workshops + Digital subscribers, partially offset by increases in End of Period Digital Subscribers in all major geographic markets. Q1 2021 End of Period Digital Subscribers were up 16.0% and End of Period Workshops + Digital Subscribers were down 47.1% versus the prior year period.
  • Total Paid Weeks in Q1 2021 were down 3.5% versus the prior year period, driven by declines in Workshops + Digital Paid Weeks, partially offset by increases in Digital Paid Weeks in all major geographic markets. Q1 2021 Digital Paid Weeks increased 15.8% and Workshops + Digital Paid Weeks decreased 50.1% versus the prior year period.
  • Revenues in Q1 2021 were $331.8 million. On a constant currency basis, Q1 2021 revenues decreased 19.7% versus the prior year period.
    • Subscription Revenues in Q1 2021 were $279.8 million. On a constant currency basis, these revenues decreased 16.5% versus the prior year period, primarily driven by declines in Workshops + Digital Fees as a result of the closure of studios and reduced operations related to COVID-19.
    • Product Sales and Other in Q1 2021 were $52.0 million.
  • Q1 2021 End of Period Subscribers of 5.0 million
  • Q1 2021 End of Period Digital Subscribers up 16% year-over-year to an all-time high of 4.2 million
  • Q1 2021 Revenues of $332 million
  • Q1 2021 Gross Margin of 58%; excluding one-time charges, Q1 2021 adjusted gross margin increased over 700 basis points year-over-year to 60%.

The complete Press Release and financial tables can be found here:

https://finance.yahoo.com/news/ww-announces-first-quarter-2021-200100511.html

Conference Call Information

We achieved year-over-year digital end-of-period subscriber growth of 16% in Q1, reaching a new all-time high for Digital subscribers of 4.2 million and our seventh consecutive quarter of double-digit digital subscriber growth.

Member retention continues at all-time high levels of over 10 months.

Digital subscribers now at 85% of the firm’s member base.

Adoption of the new Digital 360 membership offering has been strong. “To remind you, D360 is the firm’s new mid-tier membership vertical. among D360 sign-ups who are first-time members, almost 50% are millennials or younger. In the last few weeks, we introduced D360 in Germany, France and Canada. And the early response has been strong.”

“It is clear that many members are craving in-person community and are eager to return to workshops as the environment evolves. In fact, for the last 2 weeks, our U.S. in-person weekly workshop attendance surpassed our virtual workshop participation. “

“As you would expect, workshop trends were still challenged, particularly given lockdowns in several countries. Workshop member sign-up trends are now trending positively year-over-year in Q2 as we cycle against the onset of COVID last year.”

“…we’ve significantly reduced our WW-branded studio footprint. In some cases, we were able to renegotiate favorable terms, including month-to-month arrangements. Therefore, we now expect to have approximately 450 studios in the U.S. at the end of 2021, which is up from our prior expectation of about 400.”

“…we believe our Health Solutions business will be a key strategic growth lever over the long term. The business is on track for double-digit revenue growth in 2021 and is positioned for accelerated growth in 2022 as we ramp up with our health care aggregator partners and our physician referral initiative.”

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