Weight Watchers International, Inc. (NYSE:WTW) Q2 2018 Earnings Conference Call - Final Transcript

Aug 06, 2018 • 05:00 pm ET

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Weight Watchers International, Inc. (NYSE:WTW) Q2 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good afternoon, and welcome to the Weight Watchers Second Quarter 2018 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Corey Kinger, Investor Relations. Please go ahead.

Executive
Corey Kinger

Thank you, Brian. And thank you to everyone for joining us today for Weight Watchers International's Second Quarter 2018 Conference Call. As of 4:15 P.M. Eastern Time today, the Company issued a press release reporting the second quarter 2018 results. The purpose of this call is to provide investors with some further details regarding the Company's financial results, as well as to provide a general update on the Company's progress.

The press release is available on the Company's corporate website located at weightwatchersinternational.com. Reconciliations of non-GAAP measures disclosed on this conference call to the most directly comparable GAAP financial measures are also available as part of the press release. Before we begin, let me remind everyone that this call will contain forward-looking statements. Investors should be aware that any forward-looking statements are subject to various risks and uncertainties, that could cause actual results to differ materially from those discussed here today. These risk factors are explained in detail in the Company's filings with the Securities and Exchange Commission. Please refer to these filings for a more detailed discussion of forward-looking statements and the risks and uncertainties of such statements.

All forward-looking statements are made as of today and, except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Joining today's call are Mindy Grossman, the Company's President and CEO; and Nick Hotchkin, CFO. I will now turn the call over to Mindy.

Executive
Mindy Grossman

Thanks, Corey. Good afternoon, everyone, it's great to be speaking with you today. We had another quarter of strong performance in Q2, with momentum that continued in the spring and throughout the summer, following the global launch of Invite a Friend and our first Summer of Impact marketing campaign. We ended the quarter with 4.5 million subscribers worldwide, an increase of 1 million subscribers from a year -ago, due to continued double-digit member recruitment growth across all of our major geographic markets. And importantly, our average retention continues to be at record levels of well over nine months. These results demonstrate the global appeal of our WW Freestyle program, supported by strong, integrated marketing execution on a robust and engaging digital platform.

By presenting WW in new ways, we're starting to attract a broader and more diverse audience, bringing in many new members who may not have considered Weight Watchers as a program for them in the past. Similar to what we saw in the first quarter, in the US, more than 40% of our member signups in Q2 were new to WW, an increase in the proportion of first-time members compared to recent years. On a year-over-year and constant-currency basis, revenue was up 18%, gross margin expanded 430 basis