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WW International Inc. (WW), better known as Weight Watchers, saw its stock trade lower Friday despite reporting better-than-expected third-quarter 2026 results Thursday. Declining revenue and a weaker-than-expected sales outlook overshadowed the earnings beat.
Weight Watchers reported earnings of $1.51 per share, beating Wall Street's estimate of 66 cents.
Revenue fell 11.2% year over year to $152.9 million but topped the $152.35 million estimate.
Net income reached $15.1 million, compared with a $57.5 million loss a year earlier.
Adjusted EBITDA rose 21% to $51.7 million. Adjusted EBITDA margin expanded to 33.8% from 24.9%.
However, gross margin slipped to 71.1% from 72.1%.
Marketing expenses fell to $33.1 million from $48.4 million a year earlier.
CFO Felicia DellaFortuna said marketing spending will increase in the fourth quarter as Weight Watchers prepares for its 2027 peak season.
Clinical subscription revenue jumped 48% to $38 million, accounting for 25% of total revenue.
Behavioral subscription revenue fell 22% to $113.9 million.
Total subscribers stood at approximately 2.3 million. Behavioral subscribers declined 26% to 2.1 million.
However, Core+ subscribers grew 16% to 546,000, marking four straight quarters of sequential growth.
Clinical subscribers rose 40% year over year to 174,000 but fell from 197,000 in June.
Management linked the quarterly decline to subscription renewals and changes in marketing spending.
New CEO Stephen Bye said expanding access to GLP-1 medications could create new growth opportunities.
The company plans to focus on nutrition, behavioral coaching and community support, regardless of where customers obtain their medications.
Bye acknowledged that Weight Watchers is not living up to its potential. However, he expressed confidence in the company's turnaround strategy and said he aims to restore sustainable, profitable growth in 2027.
“I came here to return this business to sustainable, profitable growth, which we are well-positioned to achieve in 2027,” he said.
Core+ enrollment in its GLP-1 Success Program has more than doubled since January.
Weight Watchers narrowed its 2026 revenue forecast to $625 million-$630 million from $620 million-$635 million.
The revised range falls below Wall Street's $630.77 million estimate.
The company also narrowed its adjusted EBITDA forecast to $110 million-$115 million from $105 million-$115 million.
Operating cash flow totaled $32.3 million. Cash stood at $126.4 million, while debt totaled $423.6 million.
WW Price Action: WW International shares fell 2.65% to $12.50 in premarket trading Friday, according to market data.
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