The CEO at WW International, also known as WeightWatchers, told employees in a memo today that the company is on track to beat its previously offered first quarter guidance and suggested that employees disregard “breathless media coverage” and that the company’s stock price would “take care of itself.”
The battered stock dropped another 20% today to $1.87 and is down 78% year to date. Two weeks ago, the company announced that its star board member and longtime investor Oprah Winfrey would depart the company’s board in May and donate her stake in the company. Winfrey, like 9 million other Americans, said this year that she is using weight-loss medication. Winfrey joined the board in 2015 after investing $43 million in the company and agreeing to allow WeightWatchers to use her name and image in its marketing. According to the company’s disclosures, Winfrey wasn’t supposed to let any company but WeightWatchers use her name, likeness, and endorsement in connection with any other weight loss or weight management programs. She was also not to engage in any other “weight loss or weight management business, program, products or services during the strategic term and for one year thereafter.”
In a memo today, CEO Sima Sistani said the stock price doesn’t reflect the company’s performance and that tradeoffs made in the near term would pay off in the way of future growth. She also noted that the company’s long-term debt agreements would not mature until 2028 and 2029, which gives WeightWatchers “ample time” to complete a turnaround. The company has gotten itself into the weight-loss meds industry, purchasing telehealth platform Sequence last year for $132 million.
“Turning around and totally transforming a business is not for the faint of heart!” Said Sistani in her memo. “Again, I know clickbait stories and their predictable, albeit temporary, market impact don’t feel great. But take pride, because we will prove the naysayers wrong.”
The memo came on the heels of news that the private equity firm controlled by former chairman Ray Debbane, who resigned in March 2023, had made $4.8 billion over 23 years by selling the stock at $7.15 per share when Debbane exited. Marketwatch noted that WeightWatchers had tapped stars over the years including Charles Barkley, Jessica Simpson, James Corden, Jenny McCarthy and Jennifer Hudson in a bid to lure dieters to the company’s offerings.
News also broke this week that lenders had hired lawyers to negotiate debt with WeightWatchers.
Sistani tried to head that off with her note to employees today.
“As the week draws to a close, I want to take a moment to address some of the breathless media coverage that I’m sure many of you have seen,” she said. “We have strong liquidity and are not in a cash crunch.”
“These headlines are often just speculation.”