Weight Watchers’ sales forecast falls short, and subscribers are down. Now it’s buying its way into telehealth


WW International Inc., the company that oversees the weight-loss program Weight Watchers, on Monday forecast weaker first-quarter sales and said sign-ups were down so far this year.

issued the forecasts shortly after the Wall Street Journal reported that the weight-loss plan provider would buy telehealth platform Sequence for $106 million. The Journal said the move would give WW access to the market for drugs like Ozempic and Wegovy that combat diabetes and obesity. The company later confirmed the deal on its earnings call.

Shares jumped 8% after hours on Monday.

The company reported a net loss of $32.5 million in the fourth quarter, or 46 cents a share, after a profit of $29.9 million, or 42 cents a share, in its fourth quarter a year earlier. Revenue fell 18.8% to $223.9 million, compared with $275.8 million in the same quarter in 2021.

Analysts polled by FactSet expected WW to report sales of $225 million, with a GAAP net loss of 11 cents a share.

For the fourth quarter, end-of-period subscribers fell 14.9%, amid a pullback in the company’s digital business.

WW forecast first-quarter sales of around $235 million, compared 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 company’s interim principal financial officer, said in a statement.

Chief Executive Sima Sistani, who took on that position last year, said she expected trends to improve throughout the year.

“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 expected to close in the second quarter. It would follow several years of stumbles for WW, including a broader shift to wellness and personalized diet plans that failed to catch on, the Journal said.

WW plans to market Sequence’s telehealth services on the Weight Watchers app, and create exercise and wellness plans for people who take weight-loss drugs, according to the Journal. Sequence had around 24,000 members as of last month, and doctors on the platform can prescribe medications like Ozempic, Wegovy and Mounjaro, the Journal reported.

D.A. Davidson analyst Linda Bolton Weiser, in a note in December, said that Sistani had helped with the company’s turnaround — strengthening the company’s technology and improving the app to strengthen connections between users 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 said.

Shares of WW are down 58.2% over the past 12 months. By comparison, the S&P 500 Index
has fallen 3.6% over that period.




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