The purpose of this research paper is to examine the financial performance of Weight Watchers International, Inc. over a period of years to decide if the company would be a good investment. The paper will include a company overview of Weight Watchers International, a company that has been recognized worldwide as the leader in weight management services. It will examine how Weight Watchers has grown over the last 40 years by focusing on helping people to lose weight, maintain their weight, and improve their weight through sensible eating plans. The analysis will demonstrate how Weight Watchers International has seen both revenue and income increases and decreases over the period of 2007-2011, but has remained at the top of the diet industry, establishing itself has a recognized brand throughout the world.
The company recorded revenues of 1, 467.2 million during the FY2007, an increase of 19% over FY 2006. The net profit was $201.2 million, a decrease of 4.1% over FY2006. In FY2008, the company recorded revenues of $1,535.8 million, an increase of 4.7% over FY2007. Net profit in 2008 was $204.3 million, an increase of 1.6% over FY2007. Weight Watchers recorded revenues of $1,398.9 million during FY2009, a decrease of 8.9% as compared to 2008. The net profit was $177.3 million, a decrease of 13.2% as compared to 2008 (Datamonitor, 2010).
Although Weight Watchers went thru a difficult period between 2007 and 2010 with weak sales development and declining margins, in 2010 it launched a turnaround plan, targeted to help the company re-establish its brand and increase its sales and revenues. As a result, in 2010, consumers spent over $4 billion on Weight Watchers branded products and services, including meetings conducted by the company and its franchisees, products sold at meetings, and internet subscription products sold by WeightWatchers.com, licensed products sold in retail channels and magazine subscriptions and other publications. Sales in 2011 have grown almost 30%, gross margins have improved 300 basis points, and earnings per share (EPS) have surged compared to the prior year (Trader, 2011).
The Research paper on Weight Watchers Case Study
To be the leading weight loss service provider by assisting individuals to lose weight and sustain a healthy lifestyle. II.VISION STATEMENT Weight Watchers International will be chosen by all individuals that have a goal of improving their life through healthy living. Weight Watchers will be easily accessible for all individuals desiring to improve their lifestyle and will receive exceptional ...
This paper will show how despite difficult economic conditions, Weight Watchers continues to make solid financial strides to position itself as a sound company, and a sound investment.
Weight Watcher’s International, Incorporated: Financial Analysis
Weight Watchers International, Inc. (NYSE: WTW) is the world’s leading provider of weight management services in the healthcare sector, operating globally through a network of company-owned and franchise operations. The company operates in 30 countries around the world, including the US, the UK, continental Europe, Australia and New Zealand. Weight Watchers International, Inc was founded in 1963 by Jean Neidetch and is headquartered in New York City, New York employing about 28,000 people (Datamonitor, 2010).
Weight Watchers has over 45 years of experience helping millions of people lose weight through the use of sensible and sustainable food plans. The company holds over 50,000 weekly meetings worldwide where about 1.5 million members receive group support, learn about healthy eating patterns, behavior modification, and physical activity. The company also offers self-help products, cook books, and CD-ROMS which gives information on Weight Watcher’s guidance on weight loss and weight loss plans in addition to snacks, food, and magazines (Vignali, 2008).
The company gives you two options, Weight Watchers Online or Weight Watchers meetings.
Both options are geared to help individuals lose weight and keep it off. Weight Watchers Online consists of a customized weight loss plan for both men and women that use interactive tools to help individuals lose weight, and stay on track of their weight loss, all while managing results at your own pace. At the Weight Watchers meetings, members get expert advice and support from trained Weight Watchers leaders and staff. They teach you practical strategies on eating right to help you reach your goals. Throughout the years, Weight Watchers has introduced several weight loss programs which have been scientifically proven to be successful. One of the most successful programs to date is the Points program. It was first introduced in 1997, and it provides a tool to guide healthy choices in a wide array of eating environments. Food is given various point values, and individuals are assigned a daily point target. Counting Points help members to learn better food choices and learn proper size portion. In 2010, the Points program was revamped into the Points Plus program. This program has the same basis as the original program which emphasizes the need for a healthy balanced diet made of nutrient-dense foods, including fresh fruits and vegetables, lean proteins and grains with added enhancements.
The Essay on WEIGHT WATCHERS AND JENNY CRAIG
Weight Watchers and Jenny Craig Millions of people have lost weight using the Weight Watchers and Jenny Craig weight loss programs. Weight Watchers and Jenny Craig are two of the most popular diets in the United States that has similar weight loss options available for would be dieters. Among other popular diets, U.S. news ranks Weight Watchers #1 in best weight loss diets and ranked Jenny Craig # ...
Although Weight Watchers has over four decades of weight management experience, expertise, and know-how, the company still has had to face vulnerability to their business due to various financial threats. One of the threats is the recession. The recession has proven to be one of Weight Watcher’s International’s biggest competitor and financial threat. The economic downturn has had a negative impact on the ability of people to maintain and achieve a healthy weight. Food prices have soared causing junk food and snacks to become much cheaper than healthy food. This has caused people to reevaluate their food choices, and consider alternatives to losing weight thru the Weight Watchers program. People are not pursuing nutritional goals as strong as they were prior to the recession. They are looking for ways to save and keep money in their pocket. The recession did cause a decline in enrollment during certain periods between the years 2007-2010, but the company was able to turn that around through its effective marketing, extensive PR coverage, and strong new program launch.
In late 2011 the company saw robust enrollment levels in all markets, and Weight Watchers Online reached new heights with surging sign-up volumes. Weight Watchers has proven through its steady increase in enrollment both online and at meetings that even with the economy being in a recession, the company is still able to offer an affordable program that meets the needs of individuals at any point in their lives. High interest rates did not pose a huge financial threat to Weight Watchers. High interest rates normally affect businesses in their ability to borrow funds to get started or expand. Because Weight Watcher’s has been around for over 40 years, it is already a well established company. High interest rates means that people need to pay higher interest or the money they borrow for doing their business. Therefore high interest rates tend to increase the interest cost and therefore reduce the profits of all firms. According to Weight Watchers Q3 2011 earnings results, interest expense was $13.7 million in the third quarter down $5.4 million or 28.3%, a combination of a lower effective interest rate and lower debt outstanding. Their effective interest rate decreased by 63 basis points from the third-quarter 2010 level of 5.06% to 4.43%, primarily as a result of the decline in interest rates. Since the third quarter of 2010, the company reduced its average debt outstanding by 5273.4 million, down from $1.4 billion on average in third quarter of 2010 to $1.12 billion on average in the third quarter of 2011. Global competition has the potential of being a huge threat to Weight Watchers.
The Essay on Weight Watchers Versus Jenny Craig Case
When first considering which diet plan to choose, a consumer must recognize their need; in this case our need is to lose weight. This serves as both a functional and psychological need. Jenny Craig and Weight Watchers both provide the functional need to help you satisfy your hunger while facilitating weight loss in a healthy manner. When it comes to our psychological needs, we want the personal ...
Because Weight Watchers has both an U.S and International presence, the company faces intense competition from a number of weight management and other consumer companies domestically and abroad. Because the weight loss market has become a fast growing market, it has attracted several new players in the field. These players provide a wide range of products and services including self-help weight loss diets, commercial weight loss programs, internet-based weight loss programs, dietary supplements and meal replacement products. The increasing competition has the potentially to affect the demand for the company’s products and result in lower revenue growth, but the company’s results show that it has not.
The company derives majority of its revenues from North America. North America, Weight Watcher’s largest geographical market, accounted for 66.2% of the total revenues in FY2008. In the same year, UK, Continental Europe and Australia, New Zealand and others accounted for 11.7%, 18.3% and 3.8% respectively. As the number of overweight and obese people worldwide grows, Weight Watchers has the opportunity manage its global competition by expanding its global presence beyond its traditional U.S and European focus. Big emerging companies such as China and India are places that could help the company stay ahead of its global competition (Trader, 2011).
The Business plan on Weight Watchers Swot Analysis
They target consumers who want to manage their weight through weight loss or weight maintenance. Their vision is to ensure Member satisfaction and retention by making Members feel cared for, well informed, part of the group and motivated to succeed. Weight Watchers has been around for 50 years and has developed their brand of providing weight loss services and products that make them a leading ...
Weight management is a less capital-intensive, high margin business. Weight Watchers has established itself in a good position to help with the globally rising obesity problem and manage its competition.
Weight Watchers International’s performance over the last year has proved to be both solid and strong in its businesses in North America, UK, and WeightWatchers.com. This is a result of robust top-line growth, margin expansion, and excellent bottom-line results. Q3 2011 revenues grew 26% over the prior year period. Meeting fees were up 19%, and internet revenues grew 65%. Q3 2011 paid weeks for the meetings business grew 20% versus the prior year quarter, while paid weeks for the online business were up to 67%. Q3 2011 EPS was $1.09 compared to $0.59 for the same period in 2010, a growth rate of 84%. The UK business saw third quarter revenue growth of 21% on a constant currency basis versus the prior year period, with paid week’s growth of 18% and attendance growth of 10%. Revenues in continental Europe declined 10% in Q3 on a constant-currency basis versus the comparable prior year quarter.
Paid weeks declined 6%, and attendance has declined 15%. Although the company experienced declines in that business unit, the results are actually improvements compared to prior year. The company expects to see improvements in 2012 due to the upgrade of its current program as well the upgrade of marketing capabilities. Weight Watchers Online has seen great results through the WeightWatchers.com site. Q3 2011 internet revenues were up 65% on a constant-currency basis versus the prior year period. Paid weeks grew 67% in the third quarter, and end-of-period active subscribers were up 64%. New sign-up growth throughout the third quarter was strong due to the company’s higher market investment and from increase interest from men. Results show that men have taken an interest in the program, and now account for 15% of the Weight Watchers Online sign-up volume in the US (Q3, 2011).
The Term Paper on About Greyhound Bus’ Corporate Strategy and Growth Potential
What were the critical incidents in Greyhound's growth and development over time?Greyhound was founded in 1914 and its first business was providing bus transportation for mine workers. After that the company continued to grow and expand its bus routes, by 1930 the name Greyhound Corporation was adopted and the running-dog logo ,its unique brand sign, was introduced. The next 20 years Greyhound ...
In 2010, Weight Watchers International, Inc. experienced big changes in its organization with the release of its Points Plus program, its new marketing campaign with singer Jennifer Hudson, and its new focus towards increasing the membership of men. These changes have delivered strong results with increased growth rate and significant increases in operating leverage. Operating income was $138.3 million in Q3 2011, increasing by 52.9%. Net income in the quarter was up 81.5% versus last year same time. In the meetings business, paid weeks grew by 19.7%, monthly pass customer base grew by 20.8%, and attendances had an increase of 8.7% versus prior year. Based on the 2011 results, I predict that the company will continue to improve and strengthen their results. This will result in an increase in recoveries, and bottom line results. In my opinion Weight Watcher’s financial performance will continue to be better than the year before with the increase in membership rates and customer recruitment growth (Q3, 2011).
According to Stock Scout, Weight Watchers International, Inc., a mid-cap growth company is expected to match the market over the next six months with above average risk. The most recent quarterly earnings report was significantly higher than analysts’ consensus forecast. earnings growth in the past year has accelerated moderately compared to earnings growth in the past three years. Shares are neither being accumulated heavily nor sold heavily by financial institutions. The price-to-earnings multiple is close to the average for all stocks. This is neutral for a large company like WTW. The ratio of WTW’s price-to-earnings multiple to its five-year growth rate is above the average. The stock is currently trading at 12-month forward price/earnings of 13.29 x, largely in line with global food peers.
The Essay on Wal Mart Company Year Ceo
Background Information Wal-Mart Inc. Corporate Headquarters. 702 Southwest 8 th street Bentonville, Ar 72716-8001 Top Executives. President and CEO: H. Lee Scott. Chairman of the Board: S. Robson Walton. Chairman, Executive Committee of the Board: David D. Glass. Chief Financial officer & Executive Vice President: Thomas M. SchoeweIndustry. General Merchandise, SIC code: 5399 Divisions. Wal- ...
The growth prospects are enormous and from a valuation perspective a P/E of 16 would be more in line with its long-term valuation average. Weight Watcher International, Inc. recently announced that its Board of Directors declared its quarterly cash dividend of $0.175 per share of common stock, which corresponds to an annual dividend rate of $0.70 per share. This quarterly dividend will be payable on January 13, 2012 to shareholders of record at the close of business on December 30, 2011(WeightWatchers, 2010).
Conclusion
In conclusion, this paper has shown how Weight Watchers International, Inc. is a reputable company that has established itself in the healthcare weight loss industry for over 40 years. Throughout the years, the company has proven itself with positive results along with an overall solid financial performance. Weight Watcher’s has a reputable brand name and proven results in helping people lose and maintain weight loss. The new direction the company is heading in with its new campaigns and new marketing strategies is setting the company up to continue with above average results compared to years prior. 2011 marked a change in the right direction for the company with its financial increases across the board. As an investor, I would take my chance in investing in Weight Watchers because it is a growing company that has established results and consistent growth.
References
DATAMONITOR: Weight Watchers International, Inc. (2010) Weight Watchers International SWOT Analysis, 1-9. Retrieved November 30, 2011 from Business Source Corporation.
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[Web log message]. Retrieved from http://www.cnbc.com/id/40887618/Recession_Was_Biggest_Competitor_Weight_Watchers_CEO
Q3 2011 Weight Watchers International Inc Earnings Conference Call – Final. (n.d).
Fair Disclosure Wire (Quarterly earnings Reports), Nov 08, 2011. Retrieved November 30, 2011, from Regional Business News database.
Trader, D. (2011, December 6).
Watch out for weight watchers. Seeking Alpha, DOI: 312156-watch-out-for-weight-watchers
Vignali, C., & Henderson, S. (2008).
Weight Watchers: Social Event Centered Marketing. Journal of Food Products Marketing, 14 (2), 99-113. doi: 10.1080/10454440801921188.
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Retrieved December 9, 2011 from www.http://weightwatchersinternational.com
