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WW Reports Q3 Results, Misses Earning and Sales Estimates

Nov. 5, 2021

WW International posted revenues of $293.5 million for the quarter ended September 2021, missing the Consensus Estimate by 7.64%. This compares to year-ago revenues of $320.7 million. The company has topped consensus revenue estimates just once over the last four quarters.

According to CEO Mindy Grossman: “In the coming days, we will launch the most advanced, innovative food program in WW’s history. We are confident that our powerful program will create excitement amongst new and existing members alike, driving significant member recruitment and accelerating operating and financial performance in 2022,” “We believe the combination of this new program — amplified in a robust marketing campaign featuring Oprah Winfrey, James Corden, and our inspiring member ambassadors — and the traditional New Year’s reset moment will spark increased interest in WW as consumers recommit to their health and wellness during the important winter season.”

Revenue came in below WW’s expectations. “In an environment that was difficult to predict, member recruitment slowed more than we had anticipated during the quarter.

  • Q3 2021 End of Period Subscribers of 4.5 million. End of Period Subscribers in Q3 2021 were down 4.3% versus the prior year period, driven by declines in all major geographic markets. Q3 2021 End of Period Digital Subscribers were down 2.8% and End of Period Workshops + Digital Subscribers were down 10.6% versus the prior year period.
  • Q3 2021 Revenues of $293 million
  • Q3 2021 Gross Margin of 61%; excluding one-time charges, Q3 2021 adjusted gross margin increased 270 basis points year-over-year to 62%
  • Q3 2021 Operating Income of $80 million; excluding one-time charges, Q3 2021 adjusted operating income was $88 million
  • New food program innovation to launch globally on November 8th
  • 9-month 2021 revenues are down about 11% from 2020, to $936.7 million. North American revenues are down 13.7% and UK revenues are down 20.7% from 2020.

Full Year Fiscal 2021 Guidance

The Company is updating its full year fiscal 2021 guidance, as follows:

  • Revenues expected to be modestly above $1.2 billion.

Conference Call Information:

The shifting consumer behaviors around weight loss prioritization of the last several months has resulted in 2021 being a more challenging year than we anticipated, said Mindy Grossman.

On Monday WW will globally launch a new food program with truly individualized plans that are custom built for each member. Each member will have a unique point budget and their very own zero point foods list based on the foods they say they love and cancel it out. For the first time since 2016, we are updating our proprietary award winning point system to account for added sugar and saturated fat, fiber and additional nutrients. Those members who indicate they have diabetes will receive a food plan specifically tailored to their unique food needs. Member retention is holding up well, at an average of 10 months.

As for the claimed industry slowdown… “When we got into Q2, after the early part, we started to see a fairly dramatic shift in what we were seeing from everything from search trends to what we were hearing from consumer. And it was pretty consistent across markets. And it really was people saying this isn’t what I want to do right now. I have been through a lot. And this is not what I’m going to focus on at the moment. And it really started after the first few weeks of Q2.”

Marketdata Commentary

WW is clearly betting that it’s new food plan innovation will spur more sales and growth in Q1 2022, coupled with an end to the pandemic and consumers returning to a more normal environment and focus again on weight loss. This remains to be seen. WW management points out, correctly, that when consumers do return from the pandemic funk, the key will be to have a plan that resonates with them, digital or in-person at the Studios. If Noom and other competitors, for example, match consumers’ desires better, then THEY will get the business and Not WW.

As usual, when analysts posed questions about the effect of competitors, WW management sidestepped and really did not answer. We at Marketdata just don’t buy the excuse by WW that consumers are taking a pause with dieting because of the pandemic. If that was the case, then Noom and Medifast would not be growing. Investors seem to agree as well, since MED stock price is at $222 and WW is just $18. Some consumer market research into what diet programs and companies consumer ARE now choosing, and why, is in order. Marketdata still has doubts about the company focus on wellness instead of weight loss.

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


For More Information About The Weight Loss Market and Competitors Such as WW…

See Marketdata’s March 2021 report (FS67): “The U.S. Weight Loss & Diet Control Market”, an in-depth 400+ page study published since 1989 that tracks ALL segments of the weight loss market, dieter demographics, trends, 2025 Forecasts and more. Marketdata provides custom weight loss market research and consulting services, and phone consults. Contact John LaRosa, Research Director and Head Consultant, for details (813-971-8080). Find details and Table of Contents for Marketdata’s weight loss reports at: marketdataenterprises.com. A $99, 46-page Overview Summary report is also available (OV4).

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