Motley Fool  Jun 23  Comment 
Weight Watchers newest crop of celebrity endorsers differ from Oprah in one key aspect. Here's why it matters.
Insurance Journal  Jun 22  Comment 
A majority of executives around the world feel their organizations can do better when it comes to learning from their past cyber mistakes, according to the results of a global survey conducted by The Economist Intelligence Unit (EIU) and Willis …
Yahoo  Jun 15  Comment 
Is Weight Watchers International Inc (WTW) Outperforming Other Consumer Discretionary Stocks This Year?
Benzinga  Jun 12  Comment 
The Street became decidedly more bullish on Weight Watchers International, Inc. (NYSE: WTW) Tuesday. JPMorgan analyst Christina Brathwaite initiated coverage with an Outperform rating and $105 price target, while D.A. Davidson analyst Linda...
Motley Fool  Jun 10  Comment 
The influential billionaire can do no wrong ... or can she?
Motley Fool  Jun 7  Comment 
The weight-loss management specialist is setting the table for further expansion.
Benzinga  Jun 5  Comment 
Weight Watchers International, Inc. (NYSE: WTW) is up nearly 200 percent year-over-year, but some on the Street forecast another 20 percent in upside. The Rating Bank of America Merrill Lynch analyst Olivia Tong initiated coverage of Weight...
Motley Fool  May 30  Comment 
The company put up some very strong Q1 numbers.
Insurance Journal  Apr 12  Comment 
Commercial property insurance rate increases are easing off initial spikes following 2017’s record natural catastrophe losses, but commercial insurance buyers still face upward pricing pressure on many lines of business for the remainder of...


Weight Watchers International (NYSE: WTW) is a global company that offers a range of products and services related to dieting, weight loss, and weight maintenance. Weight Watchers' presence in over 25 countries worldwide has made it the top global provider of weight loss services, which include meeting services, food products, recipes, and publications. The obesity trend in the United States and the world at large has greatly expanded the weight loss industry as a whole. Around 1.3 million members attend around 50,000 Weight Watchers meeting and WeightWatchers.com has 763,000 subscribers.[1][2] The company generated $1.4 billion in revenue and $177 million in net income in 2009.[3]

Much of the company's success, however, is predicated on the willingness of consumers to spend on losing weight - a willingness which tends to decrease during weak economic environments. As a result of the sluggish economy, the company's net revenue fell 8.9% in 2009.[3] Furthermore, medical weight loss alternatives, fad diets, economic downturns, and competition from companies such as NutriSystem (NTRI) , Nestle (NSRGY) (who owns Jenny Craig and Lean Cuisine) and Kraft Foods (KFT) (who provide South Beach products) also pose a threat to Weight Watcher's success.

Company Overview

Weight Watchers is the number one international provider of weight management services with sales in over 25 countries. The growing trend of obesity , accompanied by greater health concerns and wealth consciousness, has enriched and expanded the weight management industry as a whole, which pulls in about $59 billion in the US alone.[4] The majority of Weight Watcher's revenues come from meeting fees.

Business Segments[5]

Weight Watchers' revenues come from four major sources: meeting fees through its officially licensed support groups, product sales (recipe books, Points calculators, pre-packaged meals, etc.), internet revenues, and licensing and franchise royalties.

Meeting Fees (58% of net sales): Weight Watcher's largest revenue source is its meeting fees, which members pay in order to attend weekly support and goal-setting meetings with other members and a "Leader." This fees vary according to the meeting location and financing options available; however, overall membership figures are the most obvious trend to look to when considering whether or not these revenues will continue to increase.[6]

Product Sales (20% of net sales): The company's second largest source of revenues is product sales. Weight Watchers sells products like pre-packaged meals, bars, snacks, cookbooks, and POINTS calculators and POINTS value guides (both related to the POINTS system that Weight Watchers members use to gauge food intake). The majority of these product sales are made to members of the company's weekly meeting system and its franchises. As a result, the success of the company's product sales is largely based on the success of its efforts to increase its meeting and franchise membership.

Internet Revenues (14% of net sales): Weight Watchers has taken advantage of the obesity trend in the United States to focus on drawing in long-term customers as subscribers, with almost 80% of U.S. Internet content revenue coming from subscriptions versus individual sales. The company's website draws income from the sale of subscriptions and advertising space.

Licensing & Franchise Royalties (7% of net sales): Weight Watchers licenses its brand and other intellectual property for certain foods and products to franchises and cooperative companies. In addition, the company draws revenue from royalty fees paid by its franchises (typically 10% of their meeting fee revenues), while also earning income from magazines and third-party advertisements in its publications. Weight Watchers has established partnerships with a number of companies in related fields.

Business Growth

FY 2009 (ended January 2, 2010)[3]

  • Net revenue fell 8.9% to $1.4 billion.
  • Net income fell 13% to $177 million.

Trends and Forces

U.S. economic fluctuations exert an influence on consumers' discretionary spending on weight management

A sluggish US economy tends to have an adverse affect on the weight loss industry. As consumers lose discretionary funds, luxuries like weight loss programs and dieting products lose their priority. As Weight Watchers CEO David Kirchoff noted, "when consumers are facing a sudden crisis over their savings, livelihood, and standard of living, the natural inclination is to comfort eat, not to lose weight."[7] Due to the sluggish economy, the company's net revenues fell 8.9% in 2009.[3]

The obesity trend in the United States and abroad boosts demand for Weight Watchers' products

The obesity trend in the United States and the world at large has greatly expanded the weight loss industry as a whole. Worldwide, it is estimated that the number of overweight and obese people is around 1.6 billion. According to the Marketdata Enterprises, 68% of Americans over the age of 19 are considered overweight of which half are considered obese. As a result, the weight management industry generates $59 billion in revenue annually in the US alone.[4] In the US, the company generates $916 million in revenue.[8] World-wide, Weight Watchers has taken advantage of this trend and the internet to focus on drawing in longterm customers as subscribers. The company has 763,000 active subscribers.[2]

Fad diets, competing weight loss services companies, and medical offerings provide alternatives to Weight Watcher's services and hurt its sales growth

Weight Watchers faces a number of competitors in the weight loss field, which include: self-help weight management regimens and other self-help weight management products and publications such as books, tapes and magazines; commercial weight management programs; Internet weight management approaches; dietary supplements and meal replacement products; weight management services administered by doctors, nutritionists and dieticians; surgical procedures; the pharmaceutical industry; government agencies and non-profit groups that offer weight management services; and fitness centers. Medical developments, such as the weight loss drug Alli, have caused major dips in the weight loss market.


Weight Watchers is the world's largest provider of weight loss and weight management products, and the diversity of its products and services has brought it competition, both direct and indirect, from a variety of sources. Though the company faces indirect competition from trend diets and prescription/non-prescription weight loss supplements, its main competitors are Nestle (NSRGY), the company that owns the Jenny Craig and Lean Cuisine brands, NutriSystem (NTRI), and LA Weight Loss.

  • NutriSystem (NTRI): NutriSystem offers customers a home-delivery meal program that includes balanced, pre-prepared, portion-controlled (smaller) meals.
  • LA Weight Loss: LA Weight Loss offers a website similar to Weight Watchers' in that it seeks to draw in subscribers to the LA Weight Loss and dieting program, which operates out of centers around the country.
  • Slimming World: In Britain, Slimming World is bigger than Weight Watchers, with 7,000 groups run by 2,700 self-employed weight loss Consultants who have all lost weight following an eating plan based on the principles of satiety. The plan encourages members who attend group to choose healthy, filling foods without having to count, weigh or measure and was started by Margaret Miles-Bramwell in 1969.


  1. WTW 2009 10-K "Overview" pg. 1
  2. 2.0 2.1 WTW 2009 10-K "Weight Watchers eTools" pg. 4
  3. 3.0 3.1 3.2 3.3 WTW 2009 10-K "Selected Financial Data" pg. 26
  4. 4.0 4.1 2009 WTW 2009 10-K "The Global Weight Management Market" pg. 1-2
  5. WTW 2009 10-K "Overview" pg. 29-30
  6. | Weight Watchers.com, "How Weight Watchers Works - Meetings - What happens at a meeting?"
  7. | Seeking Alpha, "Weight Watchers International: Time for the Company to Go on a Debt Diet?" January 11, 2009
  8. WTW 2009 10-K "Global Operations" pg. 31
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