WW International, Inc., formerly known as Weight Watchers, finished the year with 4.2 million subscribers, a year-end record for the company and an 8% increase year-over-year. This includes subscriber growth in all of WW’s major markets, and stronger growth in digital subscriptions versus Studio + digital subscriptions. The company had revenues of $333 million for the fourth quarter and $1.4 billion for the full year 2019. WW declared earnings per share of $0.42 for the quarter and $1.72 earnings per share for the year, compared to $0.63 earnings per share and $3.19 earnings per share last year respectively.
“2020 is off to a terrific start. The global launch of the new myWW program is resonating in every market, the WW Presents: Oprah’s 2020 Vision tour in the U.S. has been engaging sold-out crowds to lead healthier lives and is reinforcing WW’s new positioning in wellness and weight loss, and great marketing execution by the teams around the world has driven strong performance in member signups year-over-year,” said Mindy Grossman, company president and CEO, in a February 25 earnings report. “Right now, we have more than 5 million members globally – a new all-time record for WW.”
Company CFO Nick Hotchkin also commented on the company’s success in the subscriber arena.
“Subscriber growth trends improved each quarter throughout the year, a testament to our global team’s focus and efforts to improve marketing execution. Member recruitment so far in 2020 has been well above the prior year, as expected, and is reflected in revenue and earnings growth guidance for full year 2020,” said Hotchkin.
Other highlights from the earnings report include the following:
- Revenues in Q4 were $288.7 million, relatively flat over the prior year period.
- Product sales and other revenue in Q4 were $43.9 million, a 5.5% increase year-over-year.
- Total Paid Weeks in Q4 increased 5.7% versus the prior year period. Q4 2019 Digital Paid Weeks increased 13.4% and Studio + Digital Paid Weeks decreased 8.2% versus the prior year period.
- Operating income was $65.9 million, down from $80.3 million in Q4 2018.
- Net income for the quarter was $29.4 million compared to $43.8 million in Q4 2018.
The company provided the following guidance for the full year 2020:
– Revenue of approximately $1.6 billion
– Earnings between $2.15 and $2.40 per share
This guidance includes consideration for a 53rd week in fiscal year 2020.
If you haven’t checked out WW lately, it is nothing like it used to be. Rather than focusing solely on weight, weekly weigh-ins and various formulas to achieve goals, WW is now focused on wellness, of which a healthy weight is just one component. WW offers three subscription tiers: a digital-only tier ($3.22/week), a workshop + digital tier ($6.92/week), and coaching + digital ($12.69/week). It is app-driven with an online support system at subscribers’ fingertips. The most expensive tier is more customized for members and has features the other tiers doesn’t.
With Oprah as a spokesperson, the company is getting high profile press. Also, people are often hyperfocused on health at the beginning of the year, so the company is likely to see a surge in sign-ups at the beginning of the year. Knowing it wants to leverage the “New Year’s resolution” mentality, WW will invest in marketing and promotional offers to attract subscribers when they are most likely to join.
WW has gone through a major transformation over the years, and the subscription model suits it well. The company is able to offer a variety of options and pricing to meet the needs of different groups of subscribers. Their marketing and promotional efforts are engaging, and they can’t go wrong with Oprah! They may not have had a stellar 2019, but they turned a profit and look like they will build on that success in 2020.