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WW Earnings: Will Its Digital-First Strategy Work Out?

Source: https://www.similarweb.com/corp/blog/ww-earnings-insights/

WW International (formerly Weight Watchers) reports its Q4 and full year earnings on Feb. 25 after markets close.

Ahead of the print, WW shares are flat on a three-month basis. Last quarter, the global wellness company reported mixed results with a revenue miss. WW cited declines in workshop fees and overall product sales as a result of COVID-19 pressures. Investors are also anxious about up-and-coming players like weight-loss app Noom and food-tracking monitor Lifesum.

But despite the revenue shortfall, analysts praised WW’s pivot to a digital-first world. That included WW shutting down studios and ramping up digital health and wellness services (which boast higher profit margins). Plus WW’s total subscribers rose 5% in Q3 to a record 4.7M. Most impressively, digital subscribers soared 23.5% year-over-year (YoY), with eCommerce sales rising 300%.

According to CEO Mindy Grossman, “All of WW’s 4.7 million members utilize our digital platforms, with over 80% of our members being digital-only and 20% having both digital and workshop, whether virtual or physical access.” So did this strategy continue to pay off in the fourth quarter?

Using SimilarWeb’s powerful investment analysis we can track WW’s key digital data trends. Let’s take a closer look now.

Key Takeaways

Our data suggests that:

  • WW experienced a significant pullback in YoY traffic growth to its website in the fourth quarter vs. the third quarter. While global unique visitor numbers increased 18% in Q4, this represents a notable deceleration from Q3’s 27% YoY growth.
  • Taking a closer look at the monthly traffic, unique visitors to the website dropped 1% YoY in December, vs. 38% growth in October. Given the re-imposition of lockdowns at the end of 2020, it’s not surprising that there was less of an urge to begin dieting vs. the usual holiday season buildup.
  • Note that this trend also carried through into January (usually WW’s best-performing month as new year diet resolutions drive a subscription surge). Monthly unique visitors in January 2021 came in at 12% below January 2020.

  • The same pattern can be seen if we focus on just the U.S. and Germany (two of WW’s largest markets). The U.S. remains WW’s most successful market- and accounts for 66% of weightwatchers.com’s desktop traffic share, followed by France at 9%, then Germany at 8%. While Germany experienced a far greater YoY surge in Q3 than the U.S., it also saw YoY traffic growth plunge in the fourth quarter.

  • While Q4 bounce rate has stayed steady at 43% (vs. Q3), other key metrics of audience engagement have dropped dramatically over the course of 2020. In particular, average pages per visit fell 32% YoY in the fourth quarter, while average visit time was down 29% YoY. You can see the monthly trends in the chart below.

  • However, our data does show that both average session duration and pages per visit improved in January (to -9% YoY and -14% YoY, respectively). That marks a notable step-up from December’s 27% YoY pullback in visit time and 30% drop for pages viewed.

Net-net Q4 was not an easy quarter for WW, but could this create an opportunity ahead of a potential post-pandemic boom? According to Grossman, COVID has really prompted people to carry out ‘an overall reappraisal of their health.” She believes WW’s new app-based membership plan Digital 360, launched in January, will help WW boost its subscriber numbers going forward – so watch this space.

To learn more about the data behind this article and what Similarweb has to offer, visit https://www.similarweb.com/.

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Data is changing the speed of business. Investors, Corporations, and Governments are buying new, differentiated data to gain visibility make better decisions. Don't fall behind. Let us help.

DATA PROVIDER SPOTLIGHT

ForwardKeys

ForwardKeys is one of the leading travel analytics firms that provides investment firms with alternative and predictive data on the travel industry. Data is offered both on the demand and the offer-side of the aviation market.

Actual Air Reservations is an aggregation of flight bookings made via the Global Distribution Systems. Exclusive agreements make that global travel data is available, including regions that are generally difficult to track. This data contains valuable insights into the profile, behaviour, and impact of events on past, present and future air travellers.

Seat Capacity provides insights into the scheduled flights from 99% of global commercial airlines.

Financial institutions use this data for artificial intelligence and predictive models to forecast the performances of businesses. Combined, the datasets can provide insights into the financial health of businesses operating in the travel and tourism industry. This list contains companies like airlines, airplane leasing companies, oil companies, hotels and travel agencies.