WW International Inc. (WW, Financial) released its third-quarter earnings for fiscal 2023 on November 2, 2023. The company reported a significant turnaround in its net income and subscriber growth, despite a decrease in net revenues.
Financial Performance and Highlights
WW International Inc. reported net revenues of $214.9 million for the third quarter of 2023, a decrease of 14% compared to $249.7 million in the same period last year. This decrease was primarily due to strategic decisions to promote long-term commitment plans and wind down the company's low-margin consumer products business.
Despite the decrease in net revenues, the company reported a net income of $43.7 million for the quarter, a significant turnaround from a net loss of $206 million in Q3 2022. The company's operating income also saw a substantial improvement, standing at $30.6 million compared to an operating loss of $254.5 million in the same period last year.
We have successfully returned WeightWatchers to subscriber growth, with Q3 end of period subscribers up 6% year-over-year to 4.0 million. This is a significant achievement and a direct result of our work in reinvigorating our core product," said Sima Sistani, the Company’s CEO.
We are executing well against our strategy and are on track for meeting, and in some cases exceeding, our 2023 objectives. As anticipated, the strategic decisions to promote long-term commitment plans and to wind down our low-margin consumer products business pressured revenues in the quarter. However, as demonstrated by our record gross margin, I am confident we are making the right decisions to return the business to profitable growth," said Heather Stark, the Company’s CFO.
Key Financial Tables
The company's subscription revenues for the quarter stood at $203.5 million, a decrease of 7.8% compared to $220.7 million in Q3 2022. Product sales and other net revenues were reported at $11.4 million, a significant decrease of 60.7% from $29 million in the same period last year.
The company's gross profit for the quarter was $141.8 million, a decrease of 7% from $152.4 million in Q3 2022. However, the company's adjusted gross profit, which excludes net restructuring charges, was $142.2 million, a decrease of 6.7% from the same period last year.
Outlook
WW International Inc. expects to end the year with total subscribers slightly above 3.7 million, representing the best seasonal slope in the company's reporting history. The company is confident in its strategy and anticipates meeting or exceeding its 2023 objectives.
Explore the complete 8-K earnings release (here) from WW International Inc for further details.
