We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
WW International Inc. (WW - Free Report) is in a transition year. This Zacks Rank #5 (Strong Sell) recently lowered full year guidance.
WW is a technology company specializing in commercial weight management programs. For nearly six decades, under the name WeightWatchers, it has inspired millions of people to adopt healthy habits for real life.
It provides comprehensive tools, including expert coaches and community, to members.
A Beat in the Second Quarter
On Aug 4, WW reported its second quarter results and beat the Zacks Consensus by $0.04 reporting $0.40 versus the Zacks Consensus of $0.36.
The company said it felt revenue pressure in the quarter.
Revenue fell 10% to $269.5 million from last year. Subscription Revenue fell 8.3% to $240.4 million and Product Sales and Other also fell, by 21.9%, to $29.1 million.
End of the Period Subscribers fell 12.3% to 4.3 million from 4.9 million last year. Digital subscribers were down 16.5% to 3.4 million while Workshops and Digital subscribers was up 10.6% to 0.8 million.
WW has been transforming itself into a digital business with subscription product for several years. But the transition hasn't always been a smooth one.
2022 is expected to be another "transitional" year.
“I joined WeightWatchers with a clear-eyed vision that building a digital community around a shared interest of health and weight loss is the key to member success and subscriber growth. I am now even more confident that it is the right path forward,” said Sima Sistani, CEO.
“2022 will be a transition year while we execute on a number of initiatives to simplify the business and build a foundation for profitable growth," she added.
Full Year Guidance is Cut
Revenue was cut to the range of $1.05 billion to $1.09 billion from a range of $1.09 billion to $1.14 billion. The Zacks Consensus is calling for $1.1 billion, but that's down 9.6% from $1.21 billion last year.
Earnings guidance was also cut and that means the analysts also lowered.
5 estimates have been cut in the last 60 days pushing the Zacks Consensus down to $0.83 from $0.96 over that time. That's an earnings decline of 39.4% as the company made $1.37 last year.
Image Source: Zacks Investment Research
Shares Are Cheap But Beware
WW shares have fallen 67% in 2022.
Image Source: Zacks Investment Research
They're cheap, with a forward P/E of just 6.2. But as the earnings estimates are cut, it means that the stock could be a value trap.
In 2022, with a volatile market, investors might want to stay on the sidelines with any company that says it's in a "transition" year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Bear of the Day: WW (WW)
WW International Inc. (WW - Free Report) is in a transition year. This Zacks Rank #5 (Strong Sell) recently lowered full year guidance.
WW is a technology company specializing in commercial weight management programs. For nearly six decades, under the name WeightWatchers, it has inspired millions of people to adopt healthy habits for real life.
It provides comprehensive tools, including expert coaches and community, to members.
A Beat in the Second Quarter
On Aug 4, WW reported its second quarter results and beat the Zacks Consensus by $0.04 reporting $0.40 versus the Zacks Consensus of $0.36.
The company said it felt revenue pressure in the quarter.
Revenue fell 10% to $269.5 million from last year. Subscription Revenue fell 8.3% to $240.4 million and Product Sales and Other also fell, by 21.9%, to $29.1 million.
End of the Period Subscribers fell 12.3% to 4.3 million from 4.9 million last year. Digital subscribers were down 16.5% to 3.4 million while Workshops and Digital subscribers was up 10.6% to 0.8 million.
WW has been transforming itself into a digital business with subscription product for several years. But the transition hasn't always been a smooth one.
2022 is expected to be another "transitional" year.
“I joined WeightWatchers with a clear-eyed vision that building a digital community around a shared interest of health and weight loss is the key to member success and subscriber growth. I am now even more confident that it is the right path forward,” said Sima Sistani, CEO.
“2022 will be a transition year while we execute on a number of initiatives to simplify the business and build a foundation for profitable growth," she added.
Full Year Guidance is Cut
Revenue was cut to the range of $1.05 billion to $1.09 billion from a range of $1.09 billion to $1.14 billion. The Zacks Consensus is calling for $1.1 billion, but that's down 9.6% from $1.21 billion last year.
Earnings guidance was also cut and that means the analysts also lowered.
5 estimates have been cut in the last 60 days pushing the Zacks Consensus down to $0.83 from $0.96 over that time. That's an earnings decline of 39.4% as the company made $1.37 last year.
Image Source: Zacks Investment Research
Shares Are Cheap But Beware
WW shares have fallen 67% in 2022.
Image Source: Zacks Investment Research
They're cheap, with a forward P/E of just 6.2. But as the earnings estimates are cut, it means that the stock could be a value trap.
In 2022, with a volatile market, investors might want to stay on the sidelines with any company that says it's in a "transition" year.