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How WW International (WW) Looks Just Ahead of Q4 Earnings

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WW International, Inc. WW is scheduled to report fourth-quarter 2019 numbers on Feb 25, after market close. Notably, the company has trailing four-quarter positive earnings surprise of 16.2%, on average.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 37 cents, which suggests decline of 41.3% from earnings of 63 cents in the year-ago quarter. The consensus mark for quarterly revenues is pegged at $331.4 million, which indicates a marginal increase 0.3% from the year-ago quarter’s tally.

WW International, Inc. Price and EPS Surprise


WW International, Inc. Price and EPS Surprise

WW International, Inc. price-eps-surprise | WW International, Inc. Quote


Key Factors

Soft margin has been a concern for WW International for a while. Any deleverage in operating costs and higher inventory reserves may exert pressure on margins. Also, higher spending toward marketing and launch of advertising campaign as well as initiatives to boost growth may lead to higher costs. In addition, decline in Service revenues and Product sales is a woe. Fall in Service revenues are driven by Studio and Digital member recruitment declines. In the last earnings call, management had guided increased foreign exchange headwinds in the latter half of the year. These factors are likely to have made a negative impact on the company’s top and the bottom line in the fourth quarter.

Nevertheless, WW International is progressing well with its marketing approach on social media platforms, which is likely to have driven traffic in the quarter under review. Its app and digital capabilities also bode well. Also, product sales are likely to have benefited from expanded line of offerings and studio attendance trends. Moreover, it expects a mix shift including digital subscriptions and improvement in recruitment trends. These factors might benefit the company’s top line to a certain extent.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for WW International this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

WW International has a Zacks Rank #2 and an Earnings ESP of +15.33%.

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Costco (COST - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank #2.

Burlington Stores BURL has an Earnings ESP of +0.36% and a Zacks Rank #2.

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