Shares of Weight Watchers crashed 30% following a disappointing fourth quarter result and a poor outlook for 2019. Its adjusted fourth quarter earnings were 46 cents per share, versus a market estimate of 60 cents per share. Revenue reached $300 million versus a Wall Street expectation of $347 million. For 2019, the company expects to generate revenue of about $1.4 billion whereas analysts expected $1.66 billion in sales for the year.
CEO Mindy Grossman explains that Weight Watchers has been focused on improving member recruitment trends in light of the fact that their Winter Campaign did not recruit as expected. This year, they plan to introduce new creative with a stronger call-to-action to further optimize their media mix.
Under Grossman, WTW has shifted from a being a diet company, dropping ‘weight’ from its name and rebranding as WW last year. Younger customers tend to focus less on calorie counting and more on mindfulness of what they are eating.
The rebranding is also in-line with a long-term goal that expects that being a wellness partner the company will still have more to offer after customers have achieved their weight loss goals. In fact in 2019, they will focus on providing holistic wellness solutions that will retain their customers even after their initial weight loss.
Oprah Winfrey, who currently owns 8% of Weight Watchers, is its spokeswoman and board member. She is set to play a central role in the company’s spring television and digital marketing campaign.