WW reports Q2 EPS 65c, does not compare to consensus 11c

Reports Q2 revenue $226.8M, consensus $229.47M. Q23 diluted EPS incorporated the positive impact of 69c per diluted share in the aggregate due to the following items: 77c per diluted share positive tax impact arising from an unusually high negative annual effective tax rate as a result of a valuation allowance and small pretax loss reflected in the company’s FY23 guidance, 5c per diluted share negative impact from acquisition transaction costs, and 3c per diluted share negative net impact of restructuring charges. “Our second quarter results give me further confidence that we are on the right trajectory,” said CEO Sima Sistani. “Sign ups for our WeightWatchers business, excluding Clinical, were up year-over-year in the second quarter, delivering a return to sign up growth one quarter earlier than previously forecast. We are raising our expectation for year end 2023 total subscribers to be 3.7M. With our portfolio of solutions to improve weight health, we are leading the movement of this positive category shift across science, culture, and communities.” “We ended Q2 with 4.1M subscribers. This is the first time in the company’s reporting history that we have achieved an in-year quarter-over-quarter total subscriber step up.” said CFO Heather Stark. “While, as anticipated, revenue was down year-over-year primarily due to the headwinds from 2022’s ending subscriber base, our actions to optimize our real estate footprint and organizational structure drove record high adjusted gross margin. Given encouraging subscriber trends and improved margins, we now expect full year adjusted operating income to be towards the high end of our previously provided guidance range, despite modestly reduced revenue expectations.”