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Weight Watchers’ gross sales forecast falls brief, and subscribers are down. Now it is shopping for its manner into telehealth


WW Worldwide Inc., the corporate that oversees the weight-loss program Weight Watchers, on Monday forecast weaker first-quarter gross sales and mentioned sign-ups have been down to date this yr.

issued the forecasts shortly after the Wall Road Journal reported that the weight-loss plan supplier would purchase telehealth platform Sequence for $106 million. The Journal mentioned the transfer would give WW entry to the marketplace for medication like Ozempic and Wegovy that fight diabetes and weight problems. The corporate later confirmed the deal on its earnings name.

Shares jumped 8% after hours on Monday.

The corporate reported a internet lack of $32.5 million within the fourth quarter, or 46 cents a share, after a revenue of $29.9 million, or 42 cents a share, in its fourth quarter a yr earlier. Income fell 18.8% to $223.9 million, in contrast with $275.8 million in the identical quarter in 2021.

Analysts polled by FactSet anticipated WW to report gross sales of $225 million, with a GAAP internet lack of 11 cents a share.

For the fourth quarter, end-of-period subscribers fell 14.9%, amid a pullback within the firm’s digital enterprise.

WW forecast first-quarter gross sales of round $235 million, in contrast with FactSet estimates for $244 million.

“Whereas member sign-ups are down yr over yr to date in 2023, that may be a results of deliberately shifting a portion of our annual advertising spend from winter into the autumn as we glance to focus our spend alongside our digital product launches within the second half of the yr, and finally return the corporate to development,” Heather Stark, the corporate’s interim principal monetary officer, mentioned in an announcement.

Chief Govt Sima Sistani, who took on that place final yr, mentioned she anticipated developments to enhance all year long.

“We look ahead to upcoming launches targeted on creating neighborhood, supporting members and enabling key behaviors, in addition to our entry into scientific weight administration,” she continued.

The acquisition of Sequence is predicted to shut within the second quarter. It will comply with a number of years of stumbles for WW, together with a broader shift to wellness and personalised eating regimen plans that didn’t catch on, the Journal mentioned.

WW plans to market Sequence’s telehealth companies on the Weight Watchers app, and create train and wellness plans for individuals who take weight-loss medication, in keeping with the Journal. Sequence had round 24,000 members as of final month, and docs on the platform can prescribe medicines like Ozempic, Wegovy and Mounjaro, the Journal reported.

D.A. Davidson analyst Linda Bolton Weiser, in a observe in December, mentioned that Sistani had helped with the corporate’s turnaround — strengthening the corporate’s expertise and enhancing the app to strengthen connections between customers and “incentivize customers to trace their factors and weight-loss progress, as these are vital components in facilitating behavioral change.”

“We predict she ‘will get it’ and has accurately recognized WW’s aggressive benefit, which is the neighborhood and accountability of WW conferences,” Weiser mentioned.

Shares of WW are down 58.2% over the previous 12 months. By comparability, the S&P 500 Index
has fallen 3.6% over that interval.

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