Shares of WW International (WW -2.35%) plunged on Wednesday after the wellness company's second-quarter financial results disappointed investors. As of 2:45 p.m. EDT, WW's stock price was down more than 25%.
The company formerly known as Weight Watchers saw its revenue fall 10.2% year over year (on a constant currency basis) to $311.4 million. WW ended the quarter with 4.9 million subscribers, a decline of 1.9% from the year-ago period.
Coronavirus-related studio closures resulted in lower workshop fees. More worrisome was a decrease in e-commerce sales. "The strong digital year-over-year growth momentum in Q1 slowed in the second quarter as we cycled against strong digital performance in 2020," CEO Mindy Grossman said in a press release.
All told, WW's adjusted operating income sank 36% to $64.9 million. Its adjusted earnings per share, in turn, decreased 27% to $0.48. That was well below Wall Street's estimates for EPS of $0.66.
Management now expects WW to generate full-year revenue of nearly $1.3 billion and earnings per share of $1.10 to $1.25. Analysts had forecast revenue and EPS of $1.4 billion and $2.08, respectively.
"When we spoke to you in May, we believed that as the world reopened, the timing of which would vary by geography, consumers would be increasingly inspired to restart their health and wellness journeys creating a demand lift outside of our typical seasonal cadence and positively impacting the entire category," Grossman said during a conference call with analysts.
However, WW's growth has slowed in recent weeks even as the economy reopened, leading the company to fall short of its sales and profit projections.
"While people are acknowledging their need for recommitting to weight loss and wellness, our recent consumer research shows that at the moment they're also asking for a pause to enjoy social reconnection," Grossman said.