Aug. 6, 2018 - Management reported that: "Our WW FreestyleTM program is resonating globally, driving continued strong performance in all of our major markets. We ended the second quarter with 4.5 million subscribers – an increase of 1 million compared to a year ago – as our momentum continued during our first global, summer marketing campaign," said Mindy Grossman, the company's President and CEO.
"We have embarked on an exciting journey – from being the global leader in weight management to becoming the world's partner in wellness. We are looking forward to the upcoming launch of our first-ever member rewards and loyalty program and to presenting our brand in a new, modernized and culturally-relevant way.
"We delivered strong revenue growth and continued margin expansion in the second quarter of 2018, building upon the impressive results we saw earlier in the year," said Nick Hotchkin, the company's CFO. "With continued momentum expected in the second half of the year, we have raised our earnings guidance for 2018."
Q2 2018 Business and Financial Highlights
- End of Period Subscribers in Q2 2018 were up 27.6% versus the prior year period, driven by growth in all major geographic markets. Q2 2018 End of Period Meeting Subscribers were up 11.1% and End of Period Online Subscribers were up 38.8% versus the prior year period.
- Total Paid Weeks in Q2 2018 were up 27.3% versus the prior year period, driven by growth in all major geographic markets. Q2 2018 Meeting Paid Weeks increased 10.3% and Online Paid Weeks increased 39.8% versus the prior year.
- Revenues in Q2 2018 were $409.7 million. On a constant currency basis, Q2 2018 revenues increased 17.6% versus the prior year period.
- Operating Income in Q2 2018 was $127.7 million. On a constant currency basis, operating income increased 29.7% versus the prior year period.
- Cash balance as of June 30, 2018 was $167.8 million.
Full Year Fiscal 2018 Earnings Guidance
The company is raising its full year fiscal 2018 earnings guidance to between $3.10 and $3.25 per fully diluted share. Prior earnings guidance was between $3.00 and $3.20 per fully diluted share. Revenues for 2018 are now expected to come in at $1.55 billion (which would represent a % gain over 2017). NACO revenues are expected to increase in the mid-teens, Continental Europe +25%, and the UK market up in the low double digits.
The complete Press Release with financial tables can be found here:
Conference Call Findings:
The firm's Summer of Impact program was reported to be resonating with younger customers. The company's subscribers figure is up 1 million, to 4.5 million. The company expects to have 4 million subscribers by the end of the year, a 25% increase over 2017.
The Invite A Friend program has also been successful, as 70% of them signed up for the program. The company expects to spend $240 million on marketing this year, flat vs. 2017. WTW does not plan to spend any money on TV ads in Q3. By 2019, the company expects to have eliminated all artificial ingredients from their foods. A loyalty program with rewards will be launched soon.