WW International Inc., the corporate that oversees the weight-loss program Weight Watchers, on Monday forecast weaker first-quarter gross sales and stated sign-ups had been down up to now this 12 months.
WW
WW,
issued the forecasts shortly after the Wall Street Journal reported that the weight-loss plan supplier would purchase telehealth platform Sequence for $106 million. The Journal stated the transfer would give WW entry to the marketplace for medicine like Ozempic and Wegovy that fight diabetes and weight problems. The firm later confirmed the deal on its earnings name.
Shares jumped 8% after hours on Monday.
The firm 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 12 months earlier. Revenue 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.
“While member sign-ups are down year over year so far in 2023, that is a result of intentionally shifting a portion of our annual marketing spend from winter into the fall as we look to focus our spend alongside our digital product launches in the second half of the year, and ultimately return the company to growth,” Heather Stark, the corporate’s interim principal monetary officer, stated in an announcement.
Chief Executive Sima Sistani, who took on that place final 12 months, stated she anticipated traits to enhance all year long.
“We look forward to upcoming launches focused on creating community, supporting members and enabling key behaviors, as well as our entry into clinical weight management,” she continued.
The acquisition of Sequence is anticipated to shut within the second quarter. It would observe a number of years of stumbles for WW, together with a broader shift to wellness and personalised food plan plans that did not catch on, the Journal stated.
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 medicine, in response to the Journal. Sequence had round 24,000 members as of final month, and docs on the platform can prescribe drugs like Ozempic, Wegovy and Mounjaro, the Journal reported.
D.A. Davidson analyst Linda Bolton Weiser, in a notice in December, stated that Sistani had helped with the corporate’s turnaround — strengthening the corporate’s know-how and bettering the app to strengthen connections between customers and “incentivize users to track their points and weight-loss progress, as these are critical factors in facilitating behavioral change.”
“We think she ‘gets it’ and has correctly identified WW’s competitive advantage, which is the community and accountability of WW meetings,” Weiser stated.
Shares of WW are down 58.2% over the previous 12 months. By comparability, the S&P 500 Index
SPX,
has fallen 3.6% over that interval.
Source web site: www.marketwatch.com
