Not Even Oprah Can Save Weight Watchers

When Weight Watchers International Inc. (NASDAQ: WTW) reported its fourth-quarter financial results after the markets closed on Tuesday, the weight loss firm posted $0.46 in earnings per share (EPS) and $330.4 million in revenue. This compares with consensus estimates of $0.60 in EPS and $346.98 million in revenue, as well as the $0.37 per share and $312.5 million reported in the year-ago period.

End of Period Subscribers in the fourth quarter 2018 were up 22.4% year over year, driven by growth in all major geographic markets. Digital Subscribers grew 32.1%, and End of Period Studio + Digital Subscribers were up 7.1% in this time as well.

Total Paid Weeks in the fourth quarter were up 22.8% compared with last year. Also, Digital Paid Weeks increased 34.6%, and Studio + Digital Paid Weeks increased 6.0%.

Looking ahead to the fiscal 2019 full year, the firm expects to see EPS in the range of $1.25 to $1.50 and $1.4 billion in revenue. Consensus estimates call for $3.43 in EPS and $1.66 billion in revenue for the year.

Mindy Grossman, president and CEO, commented:

While we are disappointed with our start to 2019, we are confident that our strategy to focus on providing holistic wellness solutions leveraging our best-in-class weight management program is the right path to support long-term sustainable growth. Looking ahead, I’m happy to say that Oprah Winfrey will play a central role in our upcoming TV and digital marketing campaign for Spring, bringing to life a clear message on how WW is the program that works.  Together with Oprah, we are also working on an initiative to galvanize and bring together communities through a series of digital and live experiences and events to accelerate WW’s impact and allow us to reach new and diverse audiences.  We will announce more details in the coming months, but anticipate the initiative will kick off later in 2019.

Shares of Weight Watchers were last seen down 34% at $19.36 on Wednesday, in a 52-week range of $19.25 to $105.73. The consensus price target is $70.36.

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