Weight Watchers International Inc (NASDAQ:WW) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 05:00 pm ET


Weight Watchers International Inc (NASDAQ:WW) Q3 2019 Earnings Conference Call - Final Transcript


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Welcome to the WW International Third Quarter 2019 Earnings Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]

At this time I'd like to turn the conference over to Corey Kinger of Investor Relations. Please go ahead.

Corey Kinger

Thank you, Alison, and thank you to everyone for joining us today for WW International's third quarter 2019 conference call. At about 4:05 PM Eastern Time today, we issued a press release reporting our third quarter 2019 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 corporate.ww.com. Supplemental investor materials are also available on the Company's corporate website in the Investors section under Presentations and Events.

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, President and CEO; and Nick Hotchkin, CFO, Operating Officer, North America and President, Emerging Markets.

I will now turn the call over to Mindy.

Mindy F. Grossman

Thanks, Corey. Good afternoon everyone and thank you for joining our call today. We ended the third quarter with 4.4 million subscribers, up 6% from a year ago, demonstrating positive momentum from our second quarter where we reported end of period subscribers up 1.5% year-on-year. This is the highest Q3 end subscriber level the Company has ever had, the result of our progress in returning our recruitment trend to a positive trajectory and increasing member retention.

This strong performance drove Q3 revenue of $349 million, operating income of $95 million and EPS of $0.68. As a result of the improvements we've been making across the business across all aspects of our advertising campaigns, search, eCRM, studio engagement and more, I'm proud to say that we had positive member recruitment on a global basis in the third quarter. Sign-ups for digital memberships continued to post year-over-year gains and the sign-up trend for studio continued to improve. We expect recruitment growth to accelerate in the fourth quarter.

Our average retention has continued to increase and is now just over 10 months globally. This is