Revenue drops below expectations and full-year outlook was cut
Shares of WW International Inc., formerly known as Weight Watchers, dropped further into record-low territory, after the weight management company reported disappointing second-quarter results and lowered its full-year outlook.
The company also announced a restructuring plan that will result in "the elimination of certain positions and the termination of employment for certain employees worldwide." The company expects to book restructuring charges of $12 million to $15 million in the second half of the year.
"With a rapidly changing landscape, we are taking decisive actions to navigate through this environment and completely reimagining how we operate," said Chief Executive Sima Sistani. "We are executing a significant streamlining of our operational structure, to focus and execute against our strategic pillars to expand care, expand access, and expand payment options for our members."
The stock (WW) sank 9.4% in premarket trading, which put it on track to open below the $1 mark. The stock had closed Wednesday at a record low of $1.07, to break the previous record of $1.12 hit on July 10.
The company reported income for the quarter to June 29 of $23.3 million, or 29 cents a share, or less than half the net income of $50.8 million, or 65 cents a share, in the same period a year ago.
The latest results include a nonrecurring net positive impact of 42 cents a share from a tax event and restructuring charges. Subtracting that impact would put adjusted per-share losses at 13 cents, which compares with the FactSet consensus was for earnings per share of 4 cents.
Revenue fell 10.9% to $202.1 million, below the FactSet consensus of $208.5 million, as subscription revenue declined 5.7% to $200 million. That marked the 12th revenue miss in the past 14 quarters, according to FactSet data.
Subscribers declined 6.1% and total paid weeks were down 4.9%.
For 2024, the company lowered its revenue outlook to be at least $770 million from $830 million to $860 million.
The outlook for operating losses was increased "to be at most" $180.7 million, from previous guidance for operating losses of $163.7 million to $153.7 million.
The stock has plummeted 87.8% year to date through Wednesday, while the S&P 500 has advanced 15.8%.
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