Since Weight Watchers announced a name change and a new tagline in September, the company’s stock has dropped by 60%.
Bryan Bedder / Getty Images for THRGet breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.As Weight Watchers tries on a slimmed-down new name, WW, and repositions itself with a focus on wellness, media mogul Oprah Winfrey — the company's second-largest stakeholder — has seen her investment shrink by more than $500 million.
WW is set to report earnings on Tuesday for the fiscal quarter ending in December and will have to show Wall Street that it is moving full speed ahead. While Oprah has starred in WW advertisements, the company has brought on other celebrity brand ambassadors to be the faces of WW, including DJ Khaled, Kate Hudson, and in the U.K., singer Robbie Williams.
"In addition, last fall we ran a promotion where people who invite a friend to join WW can enter to win a trip to Maui to meet Ms. Winfrey, and that trip will happen in the coming months," the representative said. In addition to facing competitors in a new space, Brathwaite said WW also needs to stop shedding daily active users of its app. Her research showed the number of daily active users on WW’s app declined at the start of the new year, a pivotal time for companies seeking to capture business from the New Year's resolution crowd.
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Weight Watchers' stock tumbles after downgrade to rare underweight rating at J.P. MorganShares of WW , formerly known as Weight Watchers International Inc., tumbled 6.2% in premarket trade Tuesday, after J.P. Morgan analyst Christina Brathwaite turned bearish the weight management and wellness company for the first time, citing continued user declines. Braithwaite cut WW to a rare underweight rating, after cutting it to neutral from overweight on Jan. 11. Only 14% of the companies J.P. Morgan covers globally are rated underweight. Braithwaite also cut slashed her stock price target to $25 from $37. She said her downgrade comes as her research suggests daily active users (DAU) on that WW app keep contracting "in the most important period of the year." Since the downgrade in January, Braithwaite said DAU trends have worsened, app reviews have become increasingly negative and competitors Noom and Diet Doctor have continued to gain traffic share. The stock has plunged 71% since the June 20, 2018 record close of $103.09 through Friday, while the S&P 500 has gained 0.3% over the same time.
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