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This is one crash diet Oprah Winfrey won’t like.
Shares of Winfrey’s WW International, the diet company formerly known as Weight Watchers, plummeted by more than 25 percent on Wednesday after reporting a slowdown in the number of people signing up for the program.
Subscriptions for the quarter ending July 3 fell 1.9 percent to 4.9 million, while subscription and product sales fell 6.9 percent, the company reported late Tuesday.
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The stock ended the day Wednesday lower 24.5 percent at $24.30 a share.
WW’s executives blamed seasonal shifts, saying summer is just not a good time for the diet industry.
"While people are acknowledging their need for re-committing to weight loss and wellness, our recent consumer research shows that at the moment they’re also asking for a pause to enjoy social reconnection," WW CEO Mindy Grossman told investors during a conference call Tuesday.
It’s a sudden turnabout for the New York-based company, which had been riding high on a wave of consumers determined to shed pounds and get back into shape during the pandemic.
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The stay-at-home trend had also been a boon for other diet companies, including Medifast and Noom.
"Subscriber trends in Q2 followed a more typical seasonal pattern than we expected, and our guidance reflects this trend," WW’s CFO Amy O’Keefe said in a follow up statement Wednesday.
But Douglas Lane of Lane Research questioned whether people were indeed taking a break from dieting, noting that Medifast "is having a great year."
"In 2020 they accelerated quicker than anyone expected and it’s been off to the races since," he said of WW’s dieting rival.
Entertainment mogul Winfrey made a large personal investment in WW in October 2015 and continues to hold stock. She is also the company’s spokesperson through 2025.
Also dragging on the stock, WW provided guidance for revenue and profit growth that was lower than the analysts’ estimates, with revenues for the year expected to "approach" $1.3 billion. Analysts had estimated sales of $1.39 billion
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