WeightWatchers (WW) reports earnings tomorrow: what to expect

What happened

WeightWatchers is scheduled to report earnings this Thursday before the market opens. Analysts expect revenue to decline 11.5% year on year, following a 14.2% decline to $162.3 million last quarter, when the company beat revenue and earnings-per-share estimates but missed EBITDA estimates.

Confirmed

Global impact / market context

The expected revenue decline points to continued pressure on WeightWatchers’ sales. If results fall short of expectations, weaker revenue could limit cash coming into the business; beating expectations could ease that concern. The previous quarter’s mixed results show sales and different measures of profit can tell different stories.

Analyst inference

Analysts have generally reaffirmed their estimates over the past 30 days, which suggests they expect the business to remain on its current path. WeightWatchers has rarely missed revenue forecasts, while peer results were mixed in relevance: ADT and Pool both reported revenue growth, unlike the decline expected here.

Analyst inference

What to watch

1. Compare reported revenue with the expected 11.5% year-on-year decline; a smaller drop would indicate sales held up better than analysts anticipated. Analyst inference
2. Check earnings per share and EBITDA against estimates. Earnings per share is profit allocated to each share; EBITDA is earnings before interest, taxes, depreciation, and amortization. Analyst inference
3. Watch whether management explains the sales trend or changes its outlook; either could shift expectations for future revenue and the cash available to fund operations. Analyst inference

Evidence

• stockstory.org