Weight Watchers’ pivot to wellness has brought the wrong kind of losses

Wait, what?
Wait, what?
Image: Amy Sussman/AP Images
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When the diet company formerly known as Weight Watchers revealed its new branding late last year, it was met with skepticism. After reporting disappointing earnings today (Feb. 26), it appears that wariness was warranted.

WW, as it is now known, intended to shake itself free of the heavy burden of its old tagline, old image, even old audience. Instead, it would step forward into a glorious new world of Wellness That Works.™

Yes, it was still “the world’s leading commercial weight-management program.” Yes, people probably did still want to lose weight. But it was all about wellness now, as a means to that end, rather than weight loss as an end in itself. Speaking to Quartz At Work, CEO Mindy Grossman explained that while the company“will never abdicate our leadership in healthy, nutritious weight loss,” the step towards wellness would help customers build “healthy habits to make the right choices to lead to whatever healthier life you want.”

With the release of its fourth-quarter earnings, it seems some shrinkage has occurred—though not in the places Weight Watchers’ shareholders might have hoped. Analysts polled by Refinitiv had expected earnings of around 60 cents per share, and predicted 2019 revenue of $1.66 billion: Instead, Weight Watchers reported adjusted earnings of 46 cents per share, and forecast revenue of $1.4 billion. Shares fell more than 25% to $21.23.

It’s a damning indictment of their pivot, and one likely to serve as a warning to other companies considering wading into wellness’s increasingly crowded pool.

To recover from these losses, Weight Watchers intends to turn to their most famous shareholder, Oprah Winfrey. The media mogul is to play a central role in the company’s spring television and digital marketing campaign, Grossman said—though it may have to do some explaining of these slim earnings first. Winfrey is the company’s second-largest shareholder, with around 11% of the shares outstanding. Without significant change, it’s all too lean for a company that made its name in trimming the fat.