Weight Watcher’s subscribers dip may have led to an overreaction

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CEO: Weight Watchers name now a misnomer

Is the Oprah Winfrey halo staring to fade from Weight Watchers?

Weight Watchers shares fell practically 15% Tuesday after the corporate reported a decline in subscribers between the primary and second quarters.

However the market could also be overreacting to a calendar downside.

For the previous few years, Weight Watchers (WTW) has reported an identical dip in subscribers throughout that interval. The rolls develop once more because the yr progresses, which is sensible.

Individuals are typically gung-ho about exercising, consuming higher and shedding pounds proper after the winter holidays. However New Yr’s resolutions will be onerous to take care of within the spring and summer time.

Though some subscribers drop out within the first few months of the yr, complete subscribers are literally approach up since Winfrey joined. The bottom grew 28% from a yr in the past to four.5 million.

Within the third quarter of 2015, the corporate had fewer than 2.6 million subscribers.

Regardless of the large drop within the inventory Tuesday, the corporate’s newest earnings really topped forecasts, and it raised its outlook.

Shares within the firm are up practically 80% this yr and have skyrocketed greater than 1,000% p.c since Winfrey first invested about $43 million.

Weight Watchers has accomplished a rare job over the previous few years of constructing the corporate’s applications extra thrilling for a broader base of individuals, significantly since Mindy Grossman — previously of HSN — took over as CEO final yr.

The brand new Weight Watchers Freestyle program permits you to eat a greater diversity of meals. Weight Watchers has additionally partnered with meditation firm Headspace to supply unique content material on the Weight Watchers app to its subscribers.

It is all about wellness, not essentially what number of kilos you have misplaced.

Grossman mentioned throughout an earnings name with analysts Monday night that starting subsequent January, no synthetic substances will seem in any Weight Watchers-branded merchandise. And he or she quoted Winfrey, who mentioned at a Weight Watchers occasion in February that “wholesome is the brand new skinny.”

Associated: Oprah Winfrey has made a killing on Weight Watchers inventory

Along with Winfrey, who can also be a board member and the corporate’s third largest investor with a 5% stake value about $450 million, Weight Watchers has introduced on actor Kevin Smith, music star DJ Khaled and celeb chef Eric Greenspan as “ambassadors” for the corporate.

So there is not any points with Oprah’s halo. Weight Watchers nonetheless seems fairly wholesome.

CNNMoney (New York) First revealed August 7, 2018: 11:13 AM ET

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