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Why WW International's Stock Popped 12% Wednesday

By Daniel Miller – Apr 29, 2020 at 5:19PM

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The weight-management business gained momentum during the first quarter, but should investors temper expectations?

What happened

Shares of WW International (WW -0.50%), a global wellness company and well-known weight management program, jumped over 20% during trading Wednesday before settling to a 12.2% gain, after the company released first-quarter results.

So what

WW International sales jumped 10% to $400 million, right at levels analysts estimated. WW lost $0.09 per share during the first quarter, an improvement from the prior year's $0.16 loss per share and well ahead of analysts calling for a $0.23 loss.

Management noted subscriptions were up 9% to 5 million subscribers compared with the prior year, which was good enough to set a first-quarter record. "Our business had a very strong start to the year, driven by the successful launch and marketing of our new myWW program and increased awareness from the WW Presents: Oprah's 2020 Vision tour," said CEO Mindy Grossman.

woman stepping on scale

Image source: Getty Images.

Now what

WW International has proved more resilient to the sell-offs seen in restaurant, transportation, and entertainment industries, among other hard-hit areas. But management noted that the company wasn't immune and that it saw negative impacts from COVID-19 beginning in mid-March. Now it will redirect its focus, as many businesses across the nation have, to bolstering its liquidity and implementing $100 million in cost savings.

WW International showed some solid momentum during the first quarter, but investors would be wise to take today's 12.2% pop with a grain of salt since the full damage from COVID-19 will show up in the second quarter.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

WW International, Inc. Stock Quote
WW International, Inc.
WW
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