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Factors That Hold Key to Weight Watchers (WW) Q2 Earnings

Zacks Equity Research

Weight Watchers International, Inc. WW is scheduled to report second-quarter 2019 numbers on Aug 6, after market close. Notably, in the trailing four quarters, the company has outperformed the Zacks Consensus Estimate, recording average positive earnings surprise of 14.2%. In the last reported quarter, it witnessed positive earnings surprise of 38.5%. Let’s see how the company is positioned ahead of the upcoming quarterly results.

Estimates Look Dull

The Zacks Consensus Estimate for the second quarter is pegged at 65 cents, indicating a decline of 35.6% from the year-ago period. The consensus mark has remained stable over the past 30 days.

The consensus mark for revenues is pegged at $375.1 million, suggesting a decline of 8.5% from the year-ago quarter’s figure.

Weight Watchers International Inc Price, Consensus and EPS Surprise


Weight Watchers International Inc Price, Consensus and EPS Surprise

Weight Watchers International Inc price-consensus-eps-surprise-chart | Weight Watchers International Inc Quote


Factors to Consider

Weight Watchers is witnessing softness in product sales and other segment for a while now. Revenues in the first quarter were mainly marred by weakness in this segment as well as decline in service revenues from North America and UK markets. Lower revenue as well as higher marketing expense is also weighing on Weight Watchers’ operating income.

Also, member recruitment is expected to be negative for the year as a whole, for both digital-only and studio. Furthermore, the company is facing adverse foreign currency, which is likely to weigh on its performance. Nevertheless, Weight Watchers is focused on optimizing and revamping all of its assets across every channel, TV, digital, social and eCRM in every geographic market. Moreover, through its app, the company is directly engaging with members. It is on track to increase awareness of WellnessWins and other in-app features and content.

What Does the Zacks Model Say?

Our proven model shows that Weight Watchers is likely to beat bottom-line estimates in the second quarter.  For this to happen, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Weight Watchers’ Earnings ESP of +3.68% combined with its Zacks Rank #3 makes us reasonably confident about an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post earnings beat.

SP Plus Corporation SP has an Earnings ESP of +4.62% and a Zacks Rank #2.

BrightView Holdings, Inc. BV has an Earnings ESP of +0.86% and a Zacks Rank #2.

Rent-A-Center, Inc. RCII has an Earnings ESP of +3.88% and a Zacks Rank #3.

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