WW International Sinks Most Since 2019 as Member Growth Slows

(Bloomberg) -- WW International Inc., the health and wellness company formerly known as Weight Watchers, posted its biggest decline in more than two years after disappointing second-quarter results and a weaker-than-expected outlook.

Shares plunged as much as 29%, erasing about $625 million of the company’s market value, which stood at $1.63 billion in late morning in New York. The stock is on track to suffer its worst one-day drop following earnings since the fourth quarter of 2018, while trading surged 700% above its three-month average.

Second-quarter results were a surprising miss, according to Truist Securities analyst Michael Swartz, who described the report as a “punch to the gut.” WW International delivered earnings per share and revenue that trailed the average analyst estimate, and it said online subscribers declined versus the year-ago period. The company also provided full-year forecasts for profit and revenue that fell short of analysts’ projections.

WW Sinks as Guidance Cut Shakes Investor Confidence: Street Wrap

“The lowered outlook has shaken our confidence in revenue cadence and near-term momentum,” Jefferies analyst Stephanie Wissink wrote in a note, downgrading the stock to hold from buy. Wissink said the new forecast has left many questions unanswered, and she now assumes a more typical seasonal arc in memberships.

Still, Morgan Stanley analyst Lauren Schenk said Tuesday’s postmarket plunge seems a bit “overdone.” She sees the potential for shares to move higher through the remainder of the year now that expectations are reset, and that the company has a new September marketing plan and new food program approach set to launch in November.

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