WW - Earnings call transcript Q3 2019 | WW International, Inc.

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Operator

Welcome to the WW International Third Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

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. Eastern third we quarter PM release a X:XX our reporting XXXX about Time issued today, press At results.

are in as the The to purpose the website corporate.ww.com. on Events. Company's financial Company's regarding is press update located at the provide is the section to materials results Company's Investors corporate available investors with progress. Supplemental a of some also further on this general on well the under as call Company's available Presentations release website provide The details investor corporate and

non-GAAP Reconciliations of to measures the comparable disclosed are of most financial release. measures call on this GAAP part press the conference also as available directly

aware everyone this to are me we statements here contain and that subject let to Before various be from that materially call today. results any that actual begin, could cause risks forward-looking forward-looking remind discussed will those uncertainties differ should statements. Investors

are Securities and detailed Company's forward-looking explained such a the more and in discussion in Commission. These statements. these of for to risks the Exchange risk refer statements and factors filings detail the uncertainties of with filings Please

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

Operating Joining today's call North America Officer, and CFO, President, are and and Markets. Hotchkin, President Mindy Grossman, Nick Emerging CEO;

Mindy. to I over will now the turn call

Mindy Grossman

and thank afternoon for Thanks today. everyone Corey. our Good you joining call

QX result up has end subscriber million our subscribers progress trajectory Company X.X% a recruitment ever quarter year demonstrating from member trend ago, returning with our period our We second the to This the positive had, ended is level a the reported we positive third subscribers, the in highest year-on-year. increasing and up from of X.X retention. end X% quarter where momentum of

$XXX QX This revenue strong of $X.XX. of of million and million, EPS income drove operating performance $XX

that all across for global the I'm continued search, we improve. positive to studio advertising memberships trend we've basis and year-over-year on aspects the and sign-up had gains campaigns, been of Sign-ups the continued say business result third making eCRM, improvements a recruitment studio to quarter. digital of member As more, across for the engagement to our post in proud a

We in expect recruitment growth fourth to the quarter. accelerate

Our each our for months providing and to our retention This average has increase a had, day. now intense is members have studio ecosystem over continued our and the experience focus reflecting significant business a with on that on just market-leading engage we improving milestone brand, both XX is globally. digital

new hold retention be trends confident the during our can engagement by these choppy gains during strategy a While that will season. program retention winter launch, we're driven

of five As brand. our been had WW and studio retention objectives we future strategy experience; discussing areas are They align priority throughout recruitment, we've key the key the innovation; all with global activation. that community XXXX have personalization; execution and elevating and marketing, for year, strategy; XXXX and

improving the subscriber year trends. done have of results are sequentially up in and execution enhancing teams showing the at and start since marketing a Our job the our our tremendous revenue

global September in advertising Our by fall major year-over-year with so all being marketing our month across markets. best bolstered TV this campaigns our recruitment drove year, far momentum markets our

XX the WW their of home visiting sharing creative US Our stories. advertising featured of in Winfrey and experience Maui our Oprah members

in driving increased digital globally. and Social were effective traffic also highly

is injecting audiences. our our fun well some The creative resonating into also and power science of with

conversion. drive nimble to in and We traffic to real-time and mix both continue our adjusting be flexible, efficiently

content in we're more our driving email enhanced engagement touch to capabilities our differentiated which retention. marketing, include is Across member our doing monthly rates. In click-through driving We've an and points, to focused with communicating of excellent recruitment-focused our improves teams member user experience now are job current and which marketing all on addition members, measurement. newsletter personalized and greater is

and Members personal to respond content. more appreciate

members experience scenes social sharing newsletter, family August as monthly a a a behind life personal well also I the sharing my my as So my peek my launched at member, and life, at I as live WW in giving how WW what's and life. happening

on and addition, member a I an members am fantastic through directly communicating In with frequently this authentic been for social community. ability WW the of keeping Connect Having channels. other has being pulse and

in email efforts visibility social also for marketing. increased and program, app Our loyalty both member in rewards our and marketing WellnessWins, and

of expanding drive current is and incentives. food Our during holiday rewards activity catalog member focus help even our and increased to busy season tracking the

top showcasing WW the effect providing community the positive and close to wins to paid raising launch WW year impact continues reinforcement initiative fresh Donations X.X million. need, to fruits redeemed prizes, the in to families $X.X be in where provide with we social and the journey. stay have of members on vegetables earned Since billion to wins. one ago, our a forward their Good, are members These our and motivation

We obsessed, relevancy have consumer brand been logo as monitor of continues markets, perception Weight Watchers maintained as awareness. the WW, continuously elevating and grown perception most Across winter, on relevance WW new always or since the has brand we to improve. of brand and and focus we and of awareness

and of as perception among We recognized plan are particularly focusing me. being maternity a members on WW brand for elevating prospective

are nicely Trends gains in new our experiences notable satisfaction, our innovation studio are make markets. positive launch program digital both position geographic which areas and for customer those NPS, a metric soon, in a believe in our is to in good our across we for With we coming XXXX.

that in-person the in provides for member value members. Our app experience tremendous community high experience continues marks our touch, to receive digital with combination demonstrating high across base,

million continues In logging to XX over of million created tracking percentage and weight, a and likes. who XX solid QX, be Connect our used with fitness members million in the members posts, nearly engagement are strong members syncing comments food, September app X trends nearly Member and using alone, in X Connect gave million device.

up in an Community of heart the was do. we X.X at quarter. each year-ago engagement members from device are the month million in number The syncing and X.X everything activity approximately over of QX, million

on more even we healthy family the greater a it the points and friends, they person, their creates their The and spreading creating the ripple impact when continue have one to likely are has, touching change. effect, life And success. habits of and more member journey lasting touch

to So discuss our come I'll for I'll call now our finish plans discussing priorities and hand the financials Nick over outlook to then XXXX and back and to

Nick Hotchkin

Thanks Mindy.

strategy year-over-year, I on and subscribers, million quarter our Before the experience, expectations. ended studio and review with I'll outlook. an of year X.X our financials our around third update initiatives provide We our future QX discuss our ahead up X% full

subscribers year-over-year period in XX% gain a subscribers to up from QX X.X year-over-year an improvement million, X.X the XX% improvement QX. down X% from of were then digital a decline of were million, to studio End and period an of X% in

fall Total for a in trends of global winter the our staying prior us launch innovation which good season. September for October, strong positive our with starting with QX, accelerating we campaign recruitment start was in position and marketing and versus puts believe

XX% for such channels effective continued first-time a attracting Purchase joined through two Recruitment channels. and QX, well Invite these In recruits as members. in Friend our us global of about In-App to highly are and work

Digital revenues total Europe revenue was million, currency. segment prior. $XXX was basis. revenues quarter down XX% best X% with and studio currency year-over-year on X% X% our performing a increased Continental third increasing the in decreased revenue subscription year-over-year versus constant on Total constant

down on down million, as was income reach lower XXX Operating margin for to the reserves on XX% ago. winter on currency, points the driven currency revenue, Gross lower operating year launch, as deleverage $XX higher was basis period. constant prior due year-over-year primarily versus a inventory XX%, by preparations year constant well revenues versus year-over-year

quarter. Our GAAP rate EPS XXXX. $X.XX, EPS had we EBITDAS of lower compares $XXX in million the to in compared was anticipated. QX XX%, QX to $X.XX than in tax GAAP this was million was which $XXX QX was previously QX year-ago

turning to our outlook. Now,

to We in QX. expect momentum to trends continue our business gain

We half continue expect billion, XXXX exchange the to foreign of year. back $X.X least revenue despite to be at in full-year headwinds the increased

assumes our trends now and towards recruitment August our million continued the estimated and we This guidance in an $XX negative in anticipates call to million $XX the of further digital May subscriptions QX. foreign anticipated a revenue assumes also exchange $XX mix on million Our improvement guidance compared call. impact on shift

in studio of attendance improving product While we product to positive we expect turn and benefit sales Overall, year-to-date, our we as XXXX. from offerings subscription been QX down about have trends. revenue revenues sales XX% in of line be expect expanded our to total

in on basis. down Europe North and revenue be expect currency year-over-year a we revenue basis digits UK up expect constant Continental year-over-year to and on the to continue slightly We be a to full mid-single full the year now year currency America constant

shares $X.XX the outstanding has increased year full guidance guidance Our year. range assumes million to and to this GAAP XX full $X.XX EPS for

midpoint year rest on constant the to EPS range I'll For basis. comments, full speak my the our and of a of currency

margin XXX to by approximately We basis margin to investments reflecting We expect about decline rate gross points, program support basis full-year upcoming XXXX. gross XXX to for the decrease estimate launch. the points QX upfront

XXXX approximately be expected is in expense to million. Marketing $XXX

in and continue after TV north G&A approach, will $XXX produce advertising XXXX winter launch our initiatives be in will campaign our We expense flexible to slightly expected of agile behind that Christmas. results million. be we investing is to and

finalization rate on we interest rate of of approximately effective tax and is high Pending that foreign income, in our which year full reflected guidance XX%. end could a be range. impact line, full tax of year the $XXX million tax Below XX%, expense to now as the as could EPS year our regulations assume low approximately the be full

studio approximately the and capitalized expected be $XX to in For is driven million. $XX spend, tech software network expect and million primarily be year, we D&A improvements, CapEx, range by the to

our our minutes I'd to capital spend cash a talking structure generation. Now like and few about

cash in year's is we $XX million revolver. and liquidity improving $XXX trends million in loans, this term voluntarily to prepay early of another million. strong. $XXX cash elected had total we undrawn Our position and voluntary QX $XXX generation, an to With strong bringing million end prepayments business At QX

the approximately strong We generation. full cash $XXX our for EBITDAS of expect driving continued year, million

X.XX any net debt-to-EBITDAS term was basis ended at structure lien Note We are a ratio end ratio leverage a the times. covenant-light calculations of lien that a have first prepay loan flexibility our and to leverage X.XX leverage credit time. QX on with We first QX net in debt agreement and debt-to-EBITDAS consolidated times. our the our used at

highly also a the in cash business invest will the that to to business our and drive we debt levels, operate continue have With reduce and flexibility not the resources initiatives growth. model, only our generative to but

Vegas digital into our of may investments the recently October. acquisition and capabilities also franchises product completed in direct M&A select Last Beyond and technology and the pursue business, franchise such we as

Looking more a subscription XXXX. the modest translates nature of expect subscribers tail given ahead, we which into year-over-year, to model XXXX with wind revenue our end business entering

the launch, in with are revenue recruitment factoring XXXX. from upcoming before point, initiatives this year. not And specific and starting providing expected next a recruitment, our while member momentum more we our only given new combined increased benefit program today, profitability year, we planning is this and deliver are to higher and revenue that Note growth successful in XXXX subscribers guidance

back the strategy. turn to expect I'd call initiatives discuss trends to led around has year strategy Before QX. start recruitment studio Mindy, we experience. the over the to since consistently growth of and our during and is studio on studio the future the an improving turning year-over-year of business to to Intense positive our focus Returning business like our part important

of studio our subscription and components. to of growth, outpace has the expect since Despite though strategy we digital to subscription business studio is actions, digital to on even growth long-term a be our studio continue drag these revenue studio that price near-term continues twice metrics both and

engaged December kicking attendance through another this term, In keep workshop great momentum to challenge earlier intend we're to saw and the our the and success into holidays. off going XXXX. stay encouraging in challenge, November attendance the immediate year We members summer

recognition member are more These and that celebration the moments adding are powerful motivators to we addition, are In awards. integral member journey. milestone

have members inspiration people On to every are fortunate we coaches and and provide very the day. who passionate and of to a side encouragement guides engaged group

are our from our we will studios. members. leverage only have look hiring believe members our who now digital coaches to new just attract and as this our we in engaged digital further well we recruited as in We're as beneficial passionate and environment studio from a coaches Historically, be as audiences also approach and

enhancing our always we for the more studios and on studio local US attendance of these members. now pathway a near expanded have and the a awareness. term engaging community studio of and a with enrollments retail and experience, with complete are full-time, and full In selection actions, members, we experiences experience high reimagining fit volume see a that needs variety an driving manager addition XX time demands to

store early has to opened is members our Illinois, from partner locations, enrollments with We're drive like been the and helping also in recently in members. new and from a Dekalb, and Kohl's pilot testing studio digital-only within studio positive upgrades studio feedback

To this have and week. presence third-party test speak enhance to a And call time, only where locations our few at shops where we communities reach will learn pop-up we'll customers to can winter, we in where leverage host traffic about footprint seasonal ads a the coach. studio brand WW locations, same have with flexible meetings we continue a which high we more

as into members And fits life. launch for in coaching very in multiple other to plan a with and group their providing whatever well we excited ways members about we're currently coaches, more broader piloting format We're finally, in virtual engage it as markets. our later XXXX,

it to Mindy. back And with I'd that, to like turn

Mindy Grossman

Nick. Thanks

As human and program program in a a I our members experience, sustainable globally. by Innovation that purpose-driven we that a next we to new delivers and on organization, focused powered very week with deeply will are excited with launching announce science-based be results. personal technology a providing foundation effective am

preview, As pattern December to our loss be will was significant of to customized Innovation ever, details a XXXX. full leading this loss clinically reminder, eating. announced November weight XX. and on be The last plan healthier will program a Monday, most new in weight program our But

and We this to and more We're our we launch. our forward customized are a approach. looking to members are constantly community program listening excited know want

off WW. on be will foods limits no always, as And

for XXXX our member delivering are understand we're and WW we especially focused each personalized, innovation, on making continuously so of them, them feels experience the that them. food Beyond we more know a we program

a be well sessions, our launch excited Leading have up new pending been guides to with to of the intensely about the the for program. engaged knowledgeable learning and studio support in-person teams training launch. and we've advocates coaches and are innovation live combination Through our our virtual and teams, our trainings ensuring micro prepared

While weight just amplification our success what's be new of loss we the our WW full winter executing about campaign, around a will program focused This the force is the of results launch such stories Christmas. messaging and program, the corner, commence post will individual highlighting marketing and members across and many will including Helene TV, as and loss who Sam the program, robust Hudson, of on Tamela Mann, new celebrity have a Kate Robbie successful weight Segara, PR. social, those This WW be global campaign Williams, digital Armytage, our ambassadors integrated more.

with also to will along our Canada host in featured is speaking Oprah Winfrey new be US and for you. the members, campaigns program customized have of a WW

number about initiative activations, is a reach one content kicked diverse As WW and experiences. Day galvanize across of key and priorities of around events talked events, events markets. other this new wellness Fest, we've off and our communities our events Essence to with audiences through Global We at Wellness Good special previously,

in together will a Focus, opportunity fostering community Oprah's do bring the and in WW of XXXX health We to Winfrey in a starting extraordinary with and best, Your full will and wellness. and bring Life do new both will beyond, day January we bringing And wellness to shared Oprah in WW there to presents be goal activate event XXXX nine Vision: ways. cities US. continue what across people together communities Together

is to and XX response nationwide. has incredible with and more mentions. far are impressions sold tremendous, radio the the XX% Oprah's Vision We the Press XXXX online already yielding thrilled WW million and million coverage tour out broadcast XX tour nearly been so presents than

of presents weeks. XXXX in in Oprah's announcing bring ripple will Year. a and coming the more special New Vision effect with in We're attendees and We XXX,XXX than more larger WW the to to tour look this tour the excited that be details guests forward significantly

to out it in for fulfilling and experience reaching diverse creative, and such in-person many offering events wellness, is with inspiring our partner Creating accessible now WW. Harnessing of the incomparable empowering are world's the experiential, making global all. community connect it power WW People is them an and to community having extending a essential new and one of as experiences. seeking ways audiences, and is

that We've the Kitchen, and across want we to content also own experiences. Healthy articulated food, products,

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Apron, in Blue also Sur WW as the La And an classes now offering defining partnering are to with impact make cooking meals addition we in Table, Kitchen we to healthy our Healthy more most fill WW with upcoming rates We're retail thrilled the than on with class locations. classes cooking the XX far. in being class with of WW with popular so their the favors Asian early look

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great a to opportunity larger seeing and in a the of we engagement see come. have years roster significantly are greater clients, We

longer-term We in more will be for detail and this the in opportunity speaking about XXXX. business near

will There we our With and teams real in all. drive XXXX vision our energized around on wellness in and on a are trends inspire as excitement our focused is and that tremendous to improving for amongst habits teams and the of XXXX. life on the leadership countries, our execute new to energy stronger world healthy priorities deliver many executing

the trajectory our return clearly a in profitability. on strategies elevating plans expanding for WW in confident to restore our diversifying growth and third growth our and our long-term ability track XXXX. is to our business presence summary, delivering audience, brand, and quarter I'm in results demonstrate momentum In and sustainable our to

momentum studio accelerated We experience. Innovation launch, supported into the and by robust reimagined a XXXX, new our excitement increased engagement campaign heading will program and upcoming have winter by our across

the WW season. message presents our enthusiasm our addition Your In Vision: and will In Oprah's throughout community Life amplify and winter foster XXXX tour Focus

us Thank to the Q&A. on And with today. you now that joining call for turn call the for operator we'll the

Operator

question The today first KeyBanc Capital Instructions] go Yruma ahead. Please come [Operator Edward from of will Markets.

Edward Yruma

contribution guess quick how know thought I little around member frame of when margins on least financial I obviously have - there perspective, couple is two, the year the first, be process XXXX cause but bit upswing recruitment for to opportunity. the at on discuss a guidance, the know me. from been lots a from kind XX% any would a So innovation ones providing new been program. the on of you're you've one? range. giving of historically And thanks I that to in plus then the not next different,

you maybe As would a maybe perspective, extensive you. the a you kind and you how differ financial guys uplift from is the Thank more think this us can program, and this from about into leading we it? how in what think did launch tell of 'XX launch about maybe from should

Nick Hotchkin

high in on and got the XXXX. same with growth firstly we've that had and very business Ed, model the incremental Look, great always expect certainly we economics, margins we've

Mindy Grossman

not broad environment customization. a program, the On us gives the which base, who for to of new are will in spectrum and very we this what existing personalization to customization that the definitely more lapsed program excited and that customers, program our people only looking innovation, but appeal of going appeal to to the is nature where is and because about we're feel of very appeal

program. trials be to significant areas that all results of clinical to going we're the with deliver across and And able efficacy

see efforts are I our think platforms across you consistent. marketing

able through our clear messaging program feel be marketing that we'll to Innovation So launch will all into channels XXXX. and we our going very be

Operator

of next Please question Our today Craig-Hallum Alex go come Group. will Fuhrman from ahead. Capital

Alex Fuhrman

earlier or of busy how your launched then I'm interesting spill little of was more you be how you the it initial just couple how that's thinking you're program launch early curious bit if ask ago. just and been by into time program in thinking piloting month just that might like of in give having the learnings next diet a rollout looks adjust, timing there's to curious than new couple couple Wanted little will the to a about from more the in years two? of it a a gone, then of like any a season Freestyle, the when smaller things, coming your if to bit that And people broadly, up calendar the that looks or it's rollout. new markets,

Mindy Grossman

a to wanted was Alex, Yes, and disciplined test make sure activating certain to structured our all messaging. in very launch we've the to markets clearly taken approach pilots our and technology

the So very on you'll world that every about. going see with one some Monday, we're live of around globally excited which clearly

As and been this further ahead timing, on teams the far for a are we time very have as working long been. we've than

efforts, So base felt our of scale including marketing real into and mass certainly the member broad going to being really existing after our efforts But galvanize our we is marketing occurs Christmas. positive. able market thrust a

Alex Fuhrman

Mindy, recently then, the on And you've think mentioned to able hang remarks hang on through that to that increases to the be winter you'll in pretty to that able you're season. to that you're in be going seen those retention prepared you I confident

Just from, numbers in you're or today rolling confidence it comes is also wondering if soon? new is where you related can that seeing something that the out elaborate to program the on

Mindy Grossman

every our mindset, think of speak that. in on about to really I people time program engaging a it's we maniacally and and I'm of contributed efforts in nutrition, all the we've hear lot tracking delivered digitally; aspect important, have the community and and community and what the and WellnessWins across Yes, ecosystem physically business; that to really activity, of retention, measure engaging as focused you every I engagement and

that will is lot productivity of the gives the measure and and a all-time seeing of of of we that. have program noise that engagement the that about So an high new we're have fact the we with us the kind at along confidence

Operator

today ahead. come America. question Tong of will from go Olivia of next Please Bank Our

Olivia Tong

test First, KPIs on what come that performance the can the there, about some with there's be the are influence any then And measure just of changes your innovation? you how if little you going new talk market, to to of a pricing bit decisions. sort

Mindy Grossman

know a efficacy program, So, we we're the the - of of right. the lot things testing our

you we're really of testing, what if world, could globally our the imagine So around all changes. technology

So be that's sure experience new they going on-boarded people into we're will program. to making a that for seamless whatever that be

So really efforts, most being to paid the very really the which is of execution of pleased attention with seeing. the launch what program, But marketing not we're necessarily forward. going we're

operate truly think be we we'll global talk that that our from virtual in a tests you've a lot I Now organization, globally. now coaching rolling group as heard us out markets about

we're is example this leveraging to of and great really our another accelerate test, So roll and that. capabilities out,

Nick Hotchkin

on like no change - to Olivia, And change side, - broad price our the no no price there. strategy

that's and more to brand heard plan our them we'll have to members to to attract this on is longer you've value us winter. and As say really delivering the focus our people many what to stay times, do

Olivia Tong

two doing there, does the things talk bit to launch. you biz. prop Just in first any on if prepare does you it that What surprised quarter was and prepare a about as that could follow-ups sort challenged was it you're mean that accelerate that for of dramatically. up. you as the And meetings way to you influence I how I guess that meeting how this

Mindy Grossman

say, least time. of a period the was deceleration very long Yes, to so, in just this

in that studio great business to we growth. feel and we've returning So progress our making we're said see that we that

clarify So need I that. just to

Nick Hotchkin

but sign-ups, QX. that still down fall Studio and mind in during recruitment it's happened QX, constant QX September. campaign a quarter and XX% down revenue, was in in single-digits the marked in year-over-year, currency the in improvement and Bear yeah, from

strongest decent our down QX. we from of QX improvement got and in some XX% month, So revenue in that a

to the So shout lot here that new going delighted focus, a on studio to program in business, good but have about obviously we're a of Monday. we're progress

Olivia Tong

have shortage so of of food, The a pharma. far that haven't one partnerships. partnerships, it's whether in that external thing There Just workouts, last lifestyle is one you you is external partnered area Amazon, terms services, etcetera.

So overall what's partnerships and your there going thought forward?

Mindy Grossman

health on or mentioned it recruit. to call, our I solutions our is as the I call which so BXB Yes, BXBXC business, business

doing of particularly we're of other there in and lot So a areas diabetes areas. work

at moving continue XXXX. we to look everyone those with forward partnerships into the be across sharing and that So be spectrum with we'll will

Operator

from Our Jason ahead. Please English go will Sachs. Goldman next come of question today

Jason English

in. couple me I of spot Olivia to a had. wanted come guess to I for Thanks back questions

First, meeting you've seen quarter topics. meeting off what what an guidance based that the the on growth correctly, on based the the far quarter, subs year-on-year bring? are new is that for fourth building expectation heard the program of subs, I in if is The this or so it will on

Nick Hotchkin

Yes.

quarter. So to the fourth turn we during positive expect studio recruitment year-over-year

Jason English

And translate is you that year-on-year? or being up that recruitment is would - expect that to into overall subs

Nick Hotchkin

recruitment. talking we're No,

turn to program as during positive. quarter, the anticipate we Sorry, sometime new we launched

Jason English

helpful. it. Got That's

Mindy Grossman

mentioned, is across Nick to today's they business. The a need, the whole, what on want in support. campaign thing And they are. discussion improvement saw I as Nick their talk business they the to as giving we with one support want people on talked studio really focused we're it where environment, in and them the obviously his very the how And sequential meeting about

So, our every member digital has we have experience.

some And we while in we at want looking experience and still studio Nick the the Kohl's have of opportunities have our still who like customers, to face-to-face we're that with physical approximately the pop-ups that be DeKalb one-third that that but do to we support exposing them, doing also want brand we'll of to new members and that mentioned.

and group now, group be What physical virtual together, XXXX experience a coaching, digital of experience, then we're so and also coaching, give lastly, very excited activation. community the we'll the able the about launch a want, they virtual if people in to one-on-one is coming coaching,

best are how So, able the need and feel to support. we'll they people really be where they meet they

Jason English

when So, at here sub question. sounds outpacing One and bit mix and cut meetings, see we it pricing sort you a continues the on I last abatement. revenue quite that. appears be a per suggesting the we year-on-year. sub half, a look we're there even the rev per that per that driving But I to comps meetings? of really component meetings. strategy the exciting. seen we quick fall is that pricing to not digital it as topic for know just follow-up What's But this that mentioned the of that an and the quarter of was user back call comps an for understand on actually compression too at ease or should through revenue pricing abatement in promo what look

Nick Hotchkin

Yes.

right, price you on it. - changes you a compare of the retention our look to - focus it initially You're on a people QX. sign But is good Jason, in realization studio, if side up the paid of real strategy, for at plans. longer-term that's driving promotional per No versus revenue key that some see to driver weeks studio driver

Operator

will next Linda come Our Bolton go of Weiser from Please ahead. DA question Davidson.

Linda Bolton Weiser

you above for are line know, are and to with sales how they us or just of Tour, in I give on kind wanted can any sign what or expectations going color Oprah up or rather the ticket the --

Mindy Grossman

Yes.

Linda Bolton Weiser

And…

Mindy Grossman

markets. much the what touching more. are We've expectations. amplification about They about delivering very people very of and response. of as across thousands but that incredible be is had excited excited will much markets experience I'm it those it. we sorry. I we're are ahead messaging We're those be will to to very press People of conversations the said hundreds And

we're very pleased. So

Linda Bolton Weiser

sort this competition, ordering kind question is and of do like or then in of the And you is the because have bit on my the you some anticipate do you for last landscape threat less competitive some you a or you. Thank or mentioned of issues diet if how that example. diet you can with ahead season anything there better versus get the is just anything in competitive little as Are to are landscape, sort anticipating of competitive upcoming that of had threatening season, rank threatening competition, Keto? there Keto, Noom rank like how was that second

Mindy Grossman

Yes.

and they doing and that competition, focused is is only named are going be competition what to how able we're there thinking not healthy is they're aware we business doing So would our what always what say do, be I and to and of people who to are acutely get accelerate themselves. can but is, we differentiate on, competition we what for

Innovation that that trial to We all program assets we've we're very we we on be a all in us efforts as going enhancements don't been with feel are that around and think fill pleased it's excited that currently seeing the the exists our the working clinical today, new science our teams heard about clearly articulate need increased through our very a we're been because of you've making which about, talk results that. engagement able to result we'll we've digital

going open, not season into I and distinct we I So we about the think is have that think what very differentiated. wide we're eyes are - but clear

Nick Hotchkin

having ecosystem, double-digit right. I digital like over seeing each recruitment I'd end to of those but think that's returning segment versus response shows months the of digital global a this many quarter, assets. milestone, growth, reaching to the period, increases digital about subscribers to obviously folks our market-leading response prior things retention XX

Operator

go from Please today next Michael come Lasser will And UBS. our ahead. of question

Michael Lasser

growth the the full So given with? disappointed is there of get be fact meetings momentum to few that the the of going subscriber new market be growth assuming there you didn't next is growth, and a would subscriber the to achieve you the that had that look out or you you're you back launching over business, but program, if level that the already, Mindy, business within would is number be as a both quarters disappointed with you will

Nick Hotchkin

not than saying recruitment program. great obviously look, about tailwinds profit next into we've We're heading this on XXXX. but subscribers retention, this growth Michael, year on and not only excited new revenue definition in on Certainly guidance next momentum, providing success, recruitment year. any other got based today Hi, we're has of like

Michael Lasser

Is in And launches you goal? couple there sustainable years this of question to program that the launches. towards eye now just of is, you having program do drive independent are my how follow-up trying more bit by where will make a and cycle any innovation business an you new growth achieve are every that

Mindy Grossman

technology we're but we're Yes, based innovating, whether Michael. and of Certainly applied innovation we we on to food great consumer have is and behavior something continue on known innovation is feel in And and seeing a that science That for the sleep, that what we in areas business, goes focused things pilots question. a program. and we're doing beyond we're there, many around doing science that activity of it's other we're to the have what mindset.

the is side to the weight how we engagement absolutely. and constantly results able enhanced to So us although of delivering critical and But loss. nutrition have continuous that innovations not the team's know to be flow key for focus greater is a to recruitment; for is be create just innovation,

Michael Lasser

from where just if think Without have we're and you year at year you'll specific you'll that guidance, now, food do constant we're side? not - point on when now providing just coming not a innovation talking talking a or be obviously the from

Mindy Grossman

about what of certainly This the really the I've that's in our business. focused we're area business. of Well, our one on goal is first had and different conversations health solutions

last think on of tech that mentioned a have hub and areas created in other third I AI. we business that servicing personalization that the and we is call Toronto

we're constantly I the So segments think important in our innovation on all iterating business. to going of that's be and

Nick Hotchkin

excited there like on can emerging on That's grow demographics, so why It's we're Like what that plan focused solutions. markets go Mike. too. partnerships, of just you at year and retention. Mindy question, the innovation that's levers, shown a second growth health we've multiple we're and food recently look, in focused great about so mentioned, We're a why new XXXX, engagement

Operator

Our question go will Nagel Please Oppenheimer. next come Brian of ahead. from

Brian Nagel

want new to ask first innovation. the - product the a is I got I've on question So,

what launch flexible The could into next how a I the for you've you and and you've lot it's how getting It's week in response with year launching not better I'm are dealers the this ways you Mindy, discussed many pull question you end prepare test. with pleased is you're here. expected maybe year? underperforming, levers next have or is sure tweak of soon, seen tested, it you've it obviously you're the there or you if the is there that So, could - the early part

Mindy Grossman

through itself, this. thousands gone people and of The innovation have thousands

works. it So

So and about the we program concerns the itself. no have innovation

that's the is new clear program, extremely the very program very the a efficacy and itself what it amplifying we're we how well. does to always constantly If clear, into will has and the believe received asking very things That's that XXXX, message it's But the resonate. ease, we're simplicity what So the going been be of about iterating and results. you're think important. clear, it, one that I simple, tweaking. excited it's we're But

Brian Nagel

That's helpful.

did correct, The question nitpick, not I Nick, down, have, I the of excess it's more points. basis I the in be product in second guess sort were X,XXX a if to the math margins but for quarter

as QX? some had the you there think - so margins guided to call to out were I product here particularly there why Is XXX. weak in

Nick Hotchkin

- a in answer Brian. well, couple me Yes, like couple let of ways,

the Within in I the pretty foreign QX, as overall not, negative expectations in would despite hoped have much context, business way exactly saw our ahead performed POS if of frankly the you our exchange.

sales reserve product we've real basis was then, down improvement. been the expect of half we and driven going sequential be points on first gross side, to side, said And year. XXX year-over-year XXX consumer of the So, changes. in spot They've weak the inventory on that a year-over-year margin the by about

consumer people hands So new trajectory and also to get growth assortments. return on we're QX. think QX down in in feel good forecasting sales their I consumer to pretty product sales as product X.X% broad our about the

Mindy Grossman

you give our created reformulated, the Yes, just sales all we on context if of and products. of expanded product remember some side, XXX% to

So January our you in products. studios and starting are e-commerce new channels our what all the saw in distribution of

assortments scale year. with So to first and of the had globally those starting we've the expand

sales work and able and of see own platforms that's are, products we're in to an new now So are and those opportunity did exciting the each where can as Nick increases we what's that's products we the now outside where because what have mentioned, actually our market. distribute we in and the product we'll

Operator

next SunTrust Michael Please question ahead. will Swartz our Humphrey. today from Robinson of come And go

Michael Swartz

to on then time. Mindy, national or the a you program wanted clarification. in rate above how in And at television the touch started Is the television regards did come the response you maybe how there well year ad about quantitative the maybe I or quarter. that into that consumers do your provide ad have you expectations. can well fourth running I advertising campaign, quarter? that consumers, last point Did guess similar us campaign, and anything to that One response from to from did later relative continues with national how of

Mindy Grossman

we the TV of last did quarter. of included if year we the remember, so didn't of and quarter, campaign end learnings that And the ran that had the at fall a you a Yes, into summer beginning lot shift. we TV have third the

Does of saw didn't a new that have you fall, as early response, learnings very So positive took that we recruitment was the lot TV and September and lot January we obviously fall a of TV in the what we campaign saw. but the and with post that then had makes we part did of hence campaigns the sense?

Michael Swartz

Yes, that's helpful.

Mindy Grossman

Okay, good.

Michael Swartz

- in the regards first sliding you the guys in quarter? that $X EBITDAS saw just add charges maintained back your for maybe does guidance us, year, with it remind to And to over you Nick, million guidance the that

Nick Hotchkin

It back D&A so. the - believe restructuring adds The add compensation. and don't I $XXX charges, back it stock-based not; million does

Operator

And Please question last will FBR. today our from ahead. go Kara of come Anderson B. Riley

Unidentified Analyst

Kara. is that talked actually then brand. wondering the hoping high of you for enhance testing you traffic will type maybe will could targeting of you're some high on Mark the traffic pop-ups I'm areas areas. This about what elaborate in be on if you Mindy, some and aspects

Mindy Grossman

be we familiar but of we've able that those with to as may do when want brand. be not seen, audience up, the to all is elements, what we finalizing attract show we're Yes,

a Genius can Apple an give them environment where almost can interface they you understand Bar, a they a, know, could with an we how our is have So, program, that coach there products. like

So we've than some for past different things winter. the looking doing to we done forward in are

Unidentified Analyst

maybe a on And strategy? rolled permanent success, out longer-term be this then could depending the to

Mindy Grossman

Absolutely.

Operator

And back Mindy ladies remarks. to to the will At session. time closing question-and-answer over and like I'd gentlemen, the Grossman this any for this conclude conference turn

Mindy Grossman

us globally growth program want gaining just our reiterate loss Monday; and the strong focus, positioning for driven most we call momentum on ever. our everyone XXXX. being and We're excited our to are well to trends feel it's you of strong thank our so weight teams, a I the on that new and to global be creativity by execution launching the the subscriber start for program customized Well,

guides most returning current, are our and coaches call and will action. it have the think for be appeal I to Our new by certainly first-time and integrated members a that strong will certainly amplified and will broad and among advocates have also it program campaign evangelists marketing

in will message of WW And Your Vision: XXXX Life January city Focus. Oprah's the we our spreading be wellness March, presents tour, nine the In then to from

to I today you want thank I and at of you'll tour again this one So and our for me hope us joining winter. stops join truly Oprah

thank you. So,

Operator

thank conference now you we attending presentation. And The concluded. for today's is

may disconnect your now lines. You

WW International (WW) 5 Nov 192019 Q3 Earnings call transcript