Mar 14, 2024 - Business

WeightWatchers CEO memo: "Our business is healthy"

A slew of food ingredients in dishes on a table

Food ingredients on display at the WeightWatchers GLP-1 House on Jan. 4 in Los Angeles. Photo: Jon Kopaloff/Getty Images

The WeightWatchers CEO says the company is healthy despite investor concerns about its stock.

Why it matters: WeightWatchers stock has lost more than half its value since Oprah Winfrey said last month that she was leaving the company's board and donating her remaining shares.

Inside the room: WW CEO Sima Sistani told employees in a memo obtained by Axios that "breathless media coverage" does not reflect the fact that the company is on solid footing.

  • "Our business is healthy, and we are well-positioned for the future as we continue our transformation," she wrote, noting that "we have strong liquidity and are not in a cash crunch."

By the numbers: WeightWatcher's stock fell 20% Thursday to $1.87.

  • The shares are down 78% on the year.
  • "Turning around and totally transforming a business is not for the faint of heart!" Sistani wrote. "As we stay focused on delivering for our members, the stock price will take care of itself."

The big picture: WW, which has been grappling with a decline in membership during the pandemic, is now marketing weight-loss drugs following its acquisition of telehealth platform Sequence in 2023.

  • Sistani has described the company's past emphasis on personal responsibility as misguided: "It's a recognition finally of the fact that there are biological and genetic underpinnings to obesity — and that in some cases willpower alone is not enough," she told Axios last year.

In her internal memo, Sistani dismissed suggestions that the company's balance sheet is shaky.

  • "We have very attractive, long-term debt agreements, with no maturities due until 2028 and 2029, which gives us ample time to deliver on our transformation and growth strategy," she said.

The bottom line: WeightWatchers' turnaround strategy is under the microscope.

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