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WW International Inc., the company that oversees the weight-loss program Weight Watchers, forecast first-quarter sales that were below expectations Monday, and said member signups were down so far this year amid a shift in marketing spending.
WW
WW,
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.
Shares jumped 8% after hours on Monday.
WW forecast first-quarter sales of around $235 million, compared with FactSet estimates for $244 million.
“While member signups 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 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.
For the fourth quarter, end-of-period subscribers fell 14.9%, amid a pullback in the company’s digital business.
On a GAAP basis, 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 for 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 a GAAP loss of 11 cents a share, on sales of $225 million. They expected adjusted earnings per share of 3 cents.
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