What happened

Shares of Weight Watchers International (NASDAQ:WW) fell 50.5% in the first six months of 2019, according to data from S&P Global Market Intelligence, as the weight-loss services company has struggled to bolster its subscriber base despite an ongoing shift into the overall wellness category.

The bulk of Weight Watchers' decline this year came in late February, when the stock plummeted nearly 35% in a single day after the company posted disappointing fourth-quarter 2018 results. Weight Watchers told investors its number of subscribers had technically climbed 22% year over year, but also fell for the third straight quarter on a sequential basis, to 3.9 million from 4.2 million three months earlier. That translated into a 5.7% year-over-year increase in revenue to $330.4 million, which missed analysts' consensus estimate by around $17 million.

Chart with red arrow pointing down with stock market data in the background indicating losses.

Image source: Getty Images.

So what

Worse yet, Weight Watchers said that it expected revenue for the full year to decline by around $100 million to $1.4 billion, while 2019 earnings would plunge from $2.71 per share in 2018 to a range of $1.25 to $1.50 per share.

That said, after essentially trading flat for the next couple of months, Weight Watchers briefly popped as much as 20% in early May in the wake of its first-quarter report. The company's subscriber ranks swelled to 4.6 million, representing a massive sequential gain and up a modest 1% year over year. 

Revenue had declined around 11% year over year (or 8.5% at constant currencies) to $363.2 million -- a byproduct of the fact that two-thirds of Weight Watchers' subscribers opted for its digital-only service, which costs less than half the price of its legacy in-store Workshop+Digital plan. That revenue technically missed expectations by around $3 million, but also translated into a significantly better-than-expected net loss of $0.16 per share for the quarter.

CEO Mindy Grossman noted trends had improved sequentially throughout the quarter, leaving the company "confident" in its decision to shift away from just weight-loss solutions and toward a more holistic wellness approach that leverages its legacy weight-management programs.

As such, Weight Watchers raised its full-year earnings target to a range of between $1.35 and $1.55 per share.

Now what

Alas, Weight Watchers was unable to maintain those gains, falling lower along with the broader market in the rest of May.

According to CFO Nick Hotchkin, the company will spend the rest of 2019 focusing on recruiting new members, retaining its existing base, building its brand, and "exercising strict cost discipline."

Until Weight Watchers can show its recent progress was more than a one-off event, I don't think the stock will be an attractive place for investors to put their cash to work.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.