WW International, Inc. (NASDAQ:WW) Q4 2022 Earnings Call Transcript

Sima Sistani: Yes. Thanks for your question, Brian. So as we noted, I mean, we were really focused on bringing LTV CAC efficiencies, and we were able to improve in January, 11% higher than January of 2022. And so, we had — we made a very intentional decision to push that spend to the second half of the year to align to not only more efficient spend, but to align to key product launches. And so even with media spend being down 24% year-over-year in January, I think we outperformed our internal expectations, and we expect to use the spend in the second half at more efficient ratios and just improve both the total signups for the year. From a marketing standpoint, I mean, our reasons to believe, I think are — have are really breaking through with more culturally and more modern both performance marketing and brand messaging.

You might have noticed we moved more to a, let’s call it, entertainment type of approach versus an influencers versus celebrities, that led to four-point increase in brand affinity. So, we’re seeing a lot of indications that we’re on the right path to modernizing our brand and increasing the appeal. But our target here remains the same.

Heather Stark: This is Heather. I would just add to that. We are modeling marketing for the full year to be flat year-over-year. So, the — with the shift in spend, we are expecting overall efficiency of spend improvement and an alignment to the spend to our product road map and as well with the acquisition of Sequence and closing in the second quarter.

Sima Sistani: And I just do want to add to around the product launches and the new features we expect to come. I keep saying the — a big point of improving our product is the product needs to do the marketing for us. Weight loss is a very word-of-mouth experience. And so, we expect people to come for the weight loss. We want them to stay for the connection, the community and the success ultimately drives NPS. And as we noted, the NPS on digital was 7 points higher on workshops, it was 10 points higher. So, those are all indicators that we’re headed in the right direction to increase the organic acquisition funnels as well as paid.

Brian Nagel: That’s very helpful. And if I can just ask one unrelated follow-up. So with respect to the acquisition, I mean, I — apology for a while if I’m thinking about it incorrectly, it’s the first time that Weight Watchers has made an acquisition like this. Obviously, unique time in the health space with what’s going on, but should we think about this as a one-off or is Weight Watchers now actively seeking more acquisition opportunities to build out the product offering?

Sima Sistani: So that’s — look, this represents a paradigm shift in our industry and one that we felt that it was important to address with a full stack solution. We did build-versus-buy analysis here and ultimately realize that as the way of spectrum advances to include clinical pathways as the leader in weight loss management solutions, that was something that we needed to provide alongside our behavior change program and gives us the unique ability to provide a holistic solution. And nobody else out there can do what we can do. When you get a script for these medications, it is medically advised to do it alongside a lifestyle behavior change program. And as you know, we are the number one doctor-recommended behavior change program.

And so, the two things combined are what help people have — consumers have better outcomes. And so, I think that this is going to be a first-of-its-kind solution, and it is an ad offering on top of what we already do with our core and premium programs.

Operator: The next question is from Linda Bolton-Weiser with D.A. Davidson. Please go ahead.