While Weight Watchers reported stellar results for the second quarter, it was a subscriber decline that sent shares of the weight loss company into the red.
The company said it had 4.5 million subscribers for the second quarter, which was down from 4.6 million in the previous quarter. Even though it was a decline it was still a 27.6 percent subscriber growth year-over-year.
For the quarter, Weight Watchers reported earnings per share of $1.01, compared to the 88 cents that analysts had expected. Revenue at $409.7 million was also better than the $409.5 million that analysts had been calling for and was a growth of almost 20% year over year.
In the year ago period, Weight Watchers had reported earnings per share of 67 cents on revenue of $341.7 million.
Looking ahead, the company has also raised its full-year guidance with earnings expected to be in the range of $3.10 and $3.25. Previously this forecast had called for earnings per share of $3.00 to $3.20.
CEO Mindy Grossman stated during the earnings call, “We had another quarter of strong performance in Q2, with momentum that continued in the spring and throughout the summer, following the global launch of Invite a Friend and our first Summer of Impact marketing campaign.”
She continued, “We ended the quarter with 4.5 million subscribers worldwide, an increase of 1 million subscribers from a year ago, due to continued double-digit member recruitment growth across all of our major geographic markets.”
“And importantly, our average retention continues to be at record levels of well over nine months. These results demonstrate the global appeal of our WW Freestyle program, supported by strong, integrated marketing execution, and a robust and engaging digital platform. By presenting WW in new ways, we’re starting to attract a broader and more diverse audience, bringing in many new members who may not have considered Weight Watchers as a program for them in the past. Similar to what we saw in the first quarter, in the U.S., more than 40% of our member signups in Q2 were new to WW, an increase in the proportion of first-time members compared to recent years,” she also said.
J.P. Morgan analyst Christine Brathwaite has said Weight Watchers could see “outsized” growth still as the company adds more celebrities. DJ Khaled joined as an ambassador earlier this year and Oprah Winfrey has a promotional deal with the company that runs until October of 2020.
Winfrey is on the company’s board of directors and owns roughly 8% of the company. Since she announced her investment in 2015, the stock has seen a gain of over 1,100%.