WeightWatchers Stock Falls After CEO Steps Down, Board Member Comonte Takes Reins: Retail Turns Bearish

Weight loss and fitness service provider WW International Inc (WW) announced on Thursday that CEO Sima Sistani has stepped down from her roles as CEO and member of the board, effective Friday. Shares of the firm were trading marginally in the red on Friday morning.

WeightWatchers board member Tara Comonte has been appointed Interim Chief Executive. Comonte joined the WeightWatchers board of directors in June 2023. With Sistani’s departure, the WeightWatchers board has been reduced from nine to eight members.

Following the announcement, retail sentiment on Stocktwits dipped into the ‘bearish’ territory (30/100).

In early August, the company announced a plan to reduce its workforce that it said will result in the elimination of certain positions and the termination of employment. The announcement was part of the firm’s strategic streamlining of its operational structure to optimize its clinical and behavioral product portfolio and its cost-savings initiative.

Back then, Sistani said these initiatives will enable the firm to serve a broader population as the leading digital health provider of weight health. The company expects recording restructuring charges that it estimates will range between $12 million to $15 million in the aggregate during the second half of fiscal 2024.

Meanwhile, the firm reported disappointing second-quarter earnings, with net income halving to $23.3 million compared to $50.8 million in the prior year period. For the full year, the company expects revenue to be at least $770 million and operating loss to be at most $180.7 million.

CFO Heather Stark pointed out that the firm is refining its operational framework against its product roadmap, concentrating on high impact initiatives to enhance efficiency, accountability and speed. “These actions are part of a comprehensive cost reduction plan, targeting $100 million in annualized savings including $20 million of savings currently reflected in our 2024 guidance,” Stark had said.

Notably, WW International shares are down over 90% since the beginning of the year. Investors are taking note of the fact that the firm may face tough competition from weight loss drugs that are gaining traction.

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