WW International (WW) 28 Apr 202020 Q1 Earnings call transcript

Good day and welcome to the WW International First Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded.

I would now like to turn the conference over to Corey Kinger, VP Investor Relations. ahead. go Please

our everyone, first to PM us for release today Time Thank is XXXX update XXXX with provide progress. on for company's conference results, International's reporting press the a some quarter we this X:XX quarter call. to WW today, as the investors as regarding you company's issued to joining first At Eastern well results. details provide of The financial purpose call further a general about

on available Supplemental of is under press available also release GAAP company's also corporate on conference corporate.ww.com. press of The Events. part corporate non-GAAP as section at located the on comparable this financial the call investor available measures Reconciliations website disclosed Presentations release. the and Investors are to are materials measures directly website the the company's in most

that let cause from subject will be here that any everyone Before forward-looking Investors today. those and we that forward-looking remind risks should are this differ begin, materially statements. results various to uncertainties aware call statements discussed me contain actual to could

detail the These of statements. these the more factors discussion a filings in statements refer Securities in Commission. uncertainties explained are the for company's filings to forward-looking of detailed risks and Exchange and risk and with Please such

new today statements any revise forward-looking law, of forward-looking future no All are required or publicly made a events update or statements of and by obligation result as except information, as otherwise. the as to company undertakes whether

North Joining and Markets. today's Nick President, CEO; and Hotchkin, CFO, call Mindy America Operating Officer, and are Grossman, President Emerging

to the turn over call now I'll Mindy.

with saying since only a last I today, for you It lot has ago. goes afternoon call hope without Thanks, joining that everyone. Thank yours. Corey. all earnings months well is and call and you two our changed our Good

community created Our we our more than ever. WW the commitment is important have members and to

today team and months for into unprecedented real together community, true future. to will communities, be everyone. for guide everything our to not true our support Our was time. two for has purpose come habits I this to of healthy how other WW long ago. do people, we globally during That the is the could and each life families, more inspire It's proud member, world the continue

that we WW our mid-March, actions, first, employees and and took support, A and provide globally paused to action the implemented workshop in-person with studio principles support safety is the is order coordinated our In community few and to of are quick encouragement workshop and virtual overarching experience. members COVID-XX health, to guiding the members escalated, situation the paramount. that when our in integral continue

they're Overnight let's concerns did we immediately revamped today. Again, the meet world and where the know communication all members content as to our they them address consumer are. mindset. the to our and We continue of changed, having

content, both and the insights and In real-time connect. and addition, for listening to our of cared member surveys volume virtual supported, on our quantitative our content to we marketing. all up connected. approach and These closely guiding oriented members ramped through to feel our and are daily ensure frequency workshop recruitment our marketing members We're

to Third, invest to we continue will innovate.

wellness, and leader certainly in the position experience. deeply digital While prioritizing enhance loss and actions at delivering also human that are environment, macro WW's connected, we we're member the aggressive the trusted expense this community as a on the uncertain being experience will and management weight engagement, and maintain

retention. both with recruitment tools, value and leadership the will continue to promote content features, We creative to and advance thought new experience added

our every The new Vision program global Oprah’s our to to with had in QX tour, The global along resonated more wellness. brand leading signups myWW XX leadership, WW and launch great loss our billion weight driving stunning impact, visibility, Turning is and position a marketing global our awareness, to start. XXXX impressions, off XXXX efforts media and in generating and our winter market. a our thought raised member the season results, strong majority of customized Presents: reinforcing

subscribers, for recruitment X% trends up the rapidly negative year-over-year our a X ended QX. We COVID-XX then to the Member level in last of record two and end with were but when mid-March, the quarter, escalated. weeks QX of million turned strong situation

year-over-year, anticipated. level So, was of while we mid-teens had end fell short QX period it growth, subscriber up the of nicely

of a growth ahead of loss strong revenues million, net $X.XX of $XX due prior in The to income and of good our expectations $XXX per adjusted subscribers management. share cost the quarter, drove operating million, for

to a environment, current QX for as we start a WW provides manage strong subscriber and world. solid and position the foundation level, record Our through post-COVID

a is a technology human experience. company WW delivering

offline primarily app. a members been experience and from all years, several tools, underway enabled WW features, available for transformation has content Our community to the enjoying digitally in connect with the

ensure for our the to pivoted XX% coaches, approximately represent members, health and experience. members overall to in-person from workshops membership mid-March of studio In global an our virtual and proactively we our safety entirely which of our

WW days We engage workshop. solution six coaches our each developed over other, product between members to digital trained studio for Over coaches and XX,XXX each studio, with so in host that guides can globally Connect continue and sprint, ecosystem inside for and technology virtual teams their a workshop, groups for the operations, our to created workshops virtually.

the gratifying we alone. and workshop much members members virtual other experience coaches by they on our attended to workshop has from inspiring. been workshops simultaneously XX% appreciate XX,XXX personally countries, the on XX highly launched workshops many satisfaction. support reviews across across the received and over XXth, connect We've all On from particularly with each a with first world, virtual March that positive I've held and hear in virtual opportunity to how week directly our

accelerated to move our first The digital virtual strategy. workshops has

launch coaching, which is this in workshop pull of experience replaced be we be business person the footprint year. virtual experience virtual strategically the discussed we'll group previously have core plan, are smaller have studio the To in part our today, a has locations. has temporarily been be studio launching While forward that face-to-face and with will a of WW, not real a of experiences later clear, and always repositioning to we estate fewer

continue as will workshops with We studio our openings. we virtual phase-in

two product WW sleep launching in our and teams member our and ability and feature gamify as a personalize important coming past very wellness tracking our app, continue adding engagement. for been after digital is current the feature we Over be to experience the months, to new app for technology vertical in the have soon environment, new WW. Especially, will

tools. with new our features filter members' to have Members Since great seen specifically community critical, March, requested, launched are and of our meet needs, and is tracking retention. utilization and and hydration greater Each has app we these ones continued sort new extending our features water driving in-app including launch. success streaks, engagement have we since and

up to In addition give reason more members content scaled to engine these recently even to in-app also our features, we new engage.

content, virtual we connect fitness, WW and launched in-app channel cooking new ambassadors. example, from For and wellness Now our featuring video a live content called WW

drive We to very high member the sentiment engagement use to seen app. will and a have and way continue as content, in with it engagement this we

We've back and more number Daily also these with notifications to views Almost week XX% while The the home. of members app at provide track. challenge #WWFreshstart a communication increased the frequency members launched members video four are get help strong, with with stay WW And to of they initiatives year-over-year. on to on participating. response been to tips healthy increasing our need has the social XXX,XXX now

COVID routines. up consumers shaken has health and wellness

with habit and help surveys consumers looking for are consumer creation indicate that time routine this structure, quantitative Our of upheaval. during

know already In and those, new trust connection creating addition, community particularly, is they and with relationships. versus critical,

equity leadership nonmembers. of are Importantly, we seen across significantly strong in trust and to have environment continue gains the and all across WW have grow with former brand current, brand audiences. and Measures increased current

industry, leader of With only that weight respondents program healthy the leader but I are is the the and a in we that living agreeing, also trust. industry, majority a not WW a in survey loss globally

our from channels connect ambassadors, our inspire pieces feeling to for crisis, content, WW motivated creative X,XXX impressions. this member total marks a others, ambassadors record with Turning X.X during have member activated across million marketing, creation content generating to our and with of social

applies our U.S. entirely now, Right to the reinforce we we is It there The struggles and be staying brand with authentic and real encouraging heartfelt stories at our content, the communication videos These distancing. week a social campaign. here that look of are all how message fresh all a and reality. other WW generated also your marketing awareness, spring member in at demonstrating our members. they're and to real a that essential are chord, are while with sharing partner is members creative healthy, right each members successes hit our Taking health. two current of position for to to the is the content in is running and campaign with aligned TV

back to in an We're real-time including in reacting be feature Oprah. content, fresh on plan ever TV landscape. to starting content, mid-May will changing member also which from with We

navigating across what environment. are approach channels very messaging the a in attentive we and our now will investment, and nimble and in However, fluid be is

about on launched us, On with other and importance our the and talked we the people mission also I've of world, all. positive organizations partnering April that's a for and charities, delivering for wellness wellness challenge, impact by generate do including more redeeming to donations a that that and for share give healthy fresh more, wins meals fruits more to earn in communities vegetables and encouraging to needs. healthy their global our members to by provide those giving rewards XXth,

This foundation, WW's donate of America, part global support food who to wins hands and program. other of organizations, and WW U.S. will Good, Wave a charitable healthy the our on partners, people such need. our frontlines into of been always the are charitable giving challenge as wellness ability Feeding huge in directly getting The Wholesome charitable to has

wellness our food produced. $X with million weight and more To-date, local challenge. XX Including contributions, X for nearly to $X.X Good provide of pounds fresh wins and donated million to meals heightened track banks over engagement of order wins has been to we're this pace WW's currently food, fitness million, gain on we've or commitment match WW and exceed XXX,XXX seen wins in to million member of member

higher In how ever. health we we as including know in know well obesity, clearly World: the proud Home, BETs a now support several positioned risks than awareness At don't partner and were COVID-XX that as as to crisis, Saving partner. this a to result relief April and We efforts, of a be important is part will change that health addition, is that of Together greater more know Citizens trusted have correlated Ourselves. WW event, of now XXth be we having people One behavior Global while to

plans performance, for turn studio key QX review our XXXX business now the in trends, to transformation priorities, business year. our Nick? call current our cost our then the more our will strategy and I and our Nick on over discuss to I'll revised to back come digital initiatives.

Mindy. Thanks,

successful marketing As a Oprah’s program, to myWW new our discussed, well-executed XXXX strong high WW and had WW campaign, visibility to start from launch Presents: tour. due the the Vision a of global XXXX,

with were of These year-over-year, through major of mid-March, subscriber not up January and the saw growth total an signups in From markets. digital over level our digits also across studio. drove double We studio million. growth each all-time in in only outpacing digital, solid member trends X signups high QX geographic with to but far our

business Brazil charge, our year-over-year $XXX restructuring. shift first impacted impairment $X.XX our and virtual $X.XX. was by EPS This QX EPS related on a QX offerings. year digital charge studio loss to related to to of quarter, a negatively on to the basis, decision to focus $X.XX included $X.XX prior a GAAP XX% in and up currency due was to compared revenue onetime the our was strategic loss million, which goodwill our constant

to and EPS anticipated, the lower in our than throughout performance quick containment in the better due of momentum is QX, expenses our Overall, actions cost tour majority strong March. guidance coming business anticipated versus than

amount Our the revenue, QX $XX million $XX tour in approximately approximately include and expenses. million in results direct same tour

drop-off sudden trends At rapidly sharply mid-March, the of positive in year-over-year, March, and escalated. member two saw that the with COVID-XX studio. held through until situation turned In digit last declines studio double growth member in we Our digital signups. time more both severe negative recruitment a weeks

workshops so pleased we While at retention recruitment and weak, XX personal trends were launch significantly. that months. steady not engagement spike our rates activities, member And very cancellation given member is far are of holding did our

in a X%, March. Given were notable late March, down studio with million trending recruitment but studio the below rates ended subscribers we Note, up subscribers, XX% QX we in towards had replacing weak weakened year-over-year, trends been previously. mid-teens subscribers growth were still recruitment X up X% digital and the

first beginning the two and digital, of Easter signup and digital any experiences moderated signups somewhat negative time the lift. between studio, winding the the trends. typically spring studio In In our for weeks digital trend of April, to continue gap for trends be both year, when member while is the given seasonal season, and

We that past recruitment recovery, fact, good digital positive the our recruitment April XX, seen the for two has encouraged since weeks. total are some in two trends weeks, been digital and have in

remain to Given to studio during trends, a subscription, studio that be million subscribers digital of we about revenue in as price approximately and the have COVID X.X your below twice year globally studio will is the our weak quarter trends. due by significantly prior negative crisis. these that subscription X trends, of expected at modeling is end, time, a pressured recruitment primarily at this And million studio QX, driven purposes, monthly the note, versus first signup for

annual XX% peak, our us QX. subscribers in a of approximately recruits is to end annual As QX sloping trough. in addition typically traditionally join our period reminder, and of And QX

decline sequential While, during last membership end it past our COVID-XX, provided our is QX that XXXX, to year and to it disruption membership base this are years the related we to was seen have QX uncertain a XXXX to withdrawing guidance. average decline five will QX, QX versus seasonal from previously XX%. since revenue where note QX of Due uncertainty EPS flat we already year, and fiscal the full year,

footprint $XXX on offer focus value, strategically virtual our experience lifetime member business we retention workshops our high-quality tech studios given opportunities, initiative, in ensure sales and across to to maximize liquidity. future reposition a financial objectives and continue to engaging real platforms, continue cost retention a savings deliver product operating and continue million maintain take finally, XXXX estate a invest maximize closed, with subscription last among continuing products a implement consumer of are, to studio while of focus recruitment Our capabilities have and subscribers, to all for to on to strong studio advantage and smaller ecommerce

reduction we to operating I initial maintain a these consumer cost to of business are while flexibility cost We've at our and versus $XXX company and G&A. of same the to for from $XXX ensuring innovating experience to mentioned, taken plan. to our respond savings conditions, As in ability come continue position cost growth. XXXX our million, and revenues, implementing time, future actions evolving program invest initiative The in the annual million our marketing, expenses to will

initiatives continue G&A will those agile best are be we number On corporate marketing, to are In and reduce in actions to we overhead. results. behind a of expense, producing that taking

and of have Board As Directors reductions seen Executive be today, Mindy, will Committee the X-K you our compensation. myself in filed and our in taking will

vary corporate including actions, to reduction salary employees, reductions cost contributions and for benefit Additional employee programs temporary lower country. by

focused on priorities. our are drive we business As structure an these decisions, and carefully we maintaining to efficient organizational key effective make

the for footprint studio savings. labor business and associated will services reflect of cost our year smaller In a

prior any location our come reopening the globally, first May studio with in-person expect reopens. a in studio safety reopening and no XXth. individual Health will to workshops phased making decision We before of

While macro in environment. business we we the plan know impacts this on the don't provides and play cost out environment challenging protection coming will how our months, the a believe in

the charge partnership May, approval X.X Annual a XXXX. amount quarter at our stock will December through of charge addition, of the current we onetime of then with on grant to extension of reflect the expect to our million Meeting record XXth, this you share price. announced recall, In in second to in And as May we may XXXX. option Subject shareholder associated Winfrey, Oprah the

generate generative XXXX. down the business, measure, highly to winter conservatively spend, cash a our Therefore, always cash precautionary of a purely revolver strong million with we QX as and drew mind, on our are weakest of that due flow expect to in cash during $XXX Bear liquidity. season on rest quarter we XXrd. is We March marketing

are Including and and through November million. XXXX until $XXX assuming December ended expense not a approximately we maturity loan position is respectively. revolver with Full covenant-lite of the remains cash our structure, the XXXX, million. year revolver interest have Recall, a $XXX drawn term draw, bonds dates and we debt QX yearend

we deliver platform. to enhance the focused control, and within growth summary, non-members alike, our taking actions of the In are opportunities on members, and with position digital decisive our to immediate items both value financial flexibility best WW and and preserve longer-term WW for liquidity and leading the

like would back it that, to And turn to Mindy. with I

the as only WW Thanks, Nick. the delivering members through to right leader objectives our as At We today, WW and elevate XXXX priorities an are of best our technology. in not focused of serve our all organization. actions will the recruit, we're remain position brand human continue a key highest themes confident our that guide impacts on actions, but the unchanged. level, to And to retain

are and have best we mentioned, prioritization help of actions degree are of critical will Nick serve this therefore, to an today, us As higher and better allocating members cost manage ensure to the and even time, a through challenging drive reductions beyond. tomorrow making towards and decisions number that business the resources, we

digital amplifying Our even XXXX one, power more virtual enhanced in now accelerating an through deliver community essential. priorities coaching, coaching way are, transformation is our community and to of the

immense also an a at business This vertical entirely are ongoing years track coach new, scale, learning only experience creating later of running our from and workshops We launch not and on coaching, offering in but will for the pilots XX community year. digitally virtual group this our focused new virtual our of enabled, led reflect test community.

and drive experience, tier differentiator will and retention. to this and new provide new recruitment believe unique both the a We vertical WW

on to offerings more our personalized that the format providing focused As set their solutions we lives members coaching build skilled and create talent, best. in highly we're evolve and

Second, recognized evolve continue the gamification. activity, be a build we partner and important deepening to mindset, and It's our as to sleep. trusted that spanning wellness continue experience in will ecosystem, nutrition, wellness, app and motivation, we hydration total

members We factors. to forming and are wellness, help integration features our tools introducing and all overall a their health important new rapidly improve between deeper these

In sleep be we early tracking. will May, launching

Our is tracking, improvement. interest content And of time. members that and measurement we this have on and our a tools strong more these we to so particular, members, our work help during mind top know a has in team Sleep days, sleep. them actionable eager completed as are give related in well added sleep even science as consumers body to for of

In addition to the the experience features to In partnerships video to members integrated expanding is On bring fitness launching we'll to Fit value WW our Fit added On and partnership content has and content in weeks. in-home in the been just our into we've market, build app currently the members. ourselves, fitness be app. vertical, WW we the in a with complimentary and bring launched even U.S. our more WW classes Canada coming Australia WW via

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being mentioned, is significant we integrated product to Nick opportunity. say our as ecommerce expansion available versus Third, growth on only a Shop I'm into pleased online. that and WW XXrd, March app

just our a exceeded our for sales primary ramping ecommerce WW sales products, to up all our In and way are in XXXX. months, ecommerce a intend to U.S. consumer of plans in-studio U.S. purchase We have make already addition Shop, purchasing. to few ecommerce

awareness have and and accessibility digital-only Our members are responding. now

expanding new and being Solutions In WW of be addition, the and the we current categories of for partner product assortment choice. the of will year, our product Health verticals course over launching the

we health As see we've to opportunity discussed the our solutions significantly larger for business years a before, come. in

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Our the ever trust critical joining and Thanks for than community today. on call before. us will authority, more be

And for will now we with the Q&A. call the turn to that, operator

you. Thank

begin will go first now [Operator ahead. Please come question-and-answer Cassel Stanley. the Instructions] will with We from Lauren Morgan Our question session.

positive color, great for all color taking the weeks digital hear. for the The helpful. my to and Great. total it's Thanks obviously last turning recruitment question two on over really is

digital attracting to curious, than you're a those new Just Just subscribers in any different have subscriber subscriber? if your trying looked this maybe environment? average understand

that would And second any is way then the change of question in being be quantify to in you're per any minutes sort great? engagement spent seeing, Thanks. increase that my quantification just day around

Sure.

digital weeks. overall, So, see of memberships identifying last we've to But diversification we will And couple continue particularly in we've the obviously the accelerate. recruitments, been specifically. of seen pleased be to digital our

what coming Connect. we being healthy part been new of and we've see what interesting would for is digital comments environment. So the one thing The at of people heightened of, are seeing join looking sense been very that's I that to is really it. members this myself really into And is we need driving really be to in this

group of take hearing to it's tracking and that escalating virtual we quantitatively a real-time. qualitatively Connect even a we've their luxury. and with a crisis, our measurement, recognition this assessment coaching, from change both to we the people, in of platform do health, more our have listening necessity and be than behavior And people seen to from of over now benefits got daily because of course the need of One a different and

everything changes We also food from have definitely seen in tracking.

So people baking. flower goods for XX% example, ranking they're home, are at up are

people. So popcorn. it give I are flavored, what mean, we say launched that movie said yourself whole quickly are do looking What us just we doing. we're just heard our a can seeing ecommerce, You healthy snacks, are our very we've what our in people really all they pivoted recipes and for?

up. night, are In home. activity Members longer just is we're are seeing not morning walks, yoga surprisingly, frequency as and more the workouts people logging not day during much

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track will able in continue we to behavior So, to real-time. almost be

Great. Thanks so much.

with Our ahead. next comes Nicholson from Citibank. Wendy question Please go

up evening. savings I executive cost good of bump savings. permanent temporary. cost the on in Hi, sort once of we But I $XXX wasn't My first reductions back those percentage I some million million through cost clear what just assume $XXX that compensation are assume are The of this. get the the company? structure to question, in will of

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you a salary those as of saw, lasting buckets, cuts, more course move point, organization lot three to G&A In temporary your savings marketing a G&A, expense. of has To on and benefits. operating efficient the

marketing side behind ideas always are be we're On going working. that marketing clear, to the invest

On digital good shift in more cost strategy footprint implications we estate. locations, sales studio with of that even long-standing the cost and real a has smaller certainly wind look, fewer first up as having terms to side, of

you're helpful. guess, then is question very spending But, That's heard of some And terrific. on, think, which I my quarter, I in right, June if increasing Okay. marketing it the I your here

workforce. sort on have who job, and get normal, not and normal we when maybe have the all coming back not of the to more be I totally to guess lingering tail back people who I behavior, the lost more pressure their of past-COVID but might economic is looking normal concern

want to that which terms my affordable to as So get think promotional of question subscription, of basis? invest, program of as sort you much the in members maybe the many spending, about how Thanks. how do you you and relative in an bucket into increasing to is, cost think advertising on maybe about lowering

we have Yes. I ways. to people. much things we can very two look at One for is accessible and always that think be resource considered Well, we want felt and

look plans. seen of longer our on that you example, We've digital number x we've membership at certain months So promotions and if for free. done commitment

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it. That's very Got color. helpful so much. you Thank

Alex question go from next ahead. Craig-Hallum. Our Please comes Fuhrman with

everyone bit a was prepared of in the kind in executing look will few estate as I over last that you've physical wanted Certainly, of of to there's wondering your a your taking One that very months? for hope remarks at XXXX to you'd have plan been Thank a you going to I WW you Hi. ask within doing Or my beyond, about last Is question. smaller likely in real is thing the you think and about well. is talk WW much Mindy, that is on that. couple years? been reaction been always more little some if footprint. I what's kind ways, could commented

we about, should about we third and partnership think think curious, branded should test your And physical locations as years? how Just to terms WW your like party over with next footprint of locations. in then, things starting versus Kohl's, the you're how few locations your more

Right.

to So, this I'll Nick I'll let comments make few too. a speak and

our they you the well digital heavily as our evolution, of really And ongoing we've the and as broaden both frankly, is as base, you about assets So, an and members our know, of years. number our this business. to need. and what been Alex, has in investing know, business of a XX% been diversify studio give as give everyone And business transformation for

not an So, is this overnight reaction.

environment, sense However, the it current accelerate. given that make to stands plans will obviously some of our

you around then know, have we As other branded the locations. world, we and have locations

to do be obviously focus decide now is very security, safety staggered. primary it will open right when and and we Our

of as and definitely workshops, diversify be those to continue partners whether locations, for check-ins, we lot point, opportunity they to will they and opportunities with your an have both different be wellness pursue we a whether well. To

North been strategy the estate field. with obviously working Head his the working role the the Nick's closely with on of real America, in as and teams very

work be strategy So, it measured him it a it. until the learn. But is and very of a let about not talk even And little any planning May. in we then, bit end to entertain because definitely of kind we're and reopening will I'll process, will controlled

Alex. I absolutely think Mindy. Hi, right, that's

locations. a And so just this to a in location-by-location of cetera. work are the X,XXX about position. and to locations process at give echo of like locations what X,XXX et But bit Imagine landlords with third studio very but as call we've are U.S. got now, and in of casual Mindy discussions color as right we party, analysis little United studio. XXX those those States

those be members branded to you going look we're at close forward, especially imagine in look been some with will since virtual we've our those opportunity studio studio and our that serve to it, more focus we to of seeing the enjoying our so ads response to likely best at are areas. we footprint as at thrilled how thoughtful to assessment. So, studios, very look our the in can But, members and off

Great. the color. Thanks that's I really you. helpful. appreciate Thank

comes Kara ahead. with B. Anderson Our FBR. next Please go from Riley question

wanted it recessionary environment. consumer with you any business in feedback the on surveys think susceptible this to company you've how more become a discretionary but see makes gathered of touched your where budgets? done point wellness members that focused sort So, I to performs a in of they perspective have on or a work done from just your you strong And on Mindy, pretty you've little asset a of this to you digital get bit kind Do you any at less position health, you? to think

is, our importantly, move the Yes. retention we that's view. fact part impact, more of We've particularly different a for? looked going at of and historically on to this, of XXXX, now, XXXX, of impact and are they over right actually have out swings talk Nick the seeing that it's had course cetera. because community the I including very And years, very but looking to big But, think of from what we haven't focused et powerful point accessibility, consumers as of I'm everybody's clearly, this be what can

so is And, important wellness as a minds. health formation that I than earlier, you marry is healthy idea ever necessity being more ritual And community as and this mentioned a support, of this luxury, habit of and if but motivation idea in a people's not to trust. and

and people, of to out us, I more provide our XX broadly, that of even and focus what this, coming how do we is even so, has ever. do reach to I leverage than And for more we been and we've be going how been people more years important able think think

was look its of agreed. infancy. if we digital when The shift have to period, the we our the We was infancy. that, was be didn't last the an in our company in financial can business, look we will have recession, the to at XXXX you But, in especially the it's planned you below as XXXX The so what business its context different. subscription when you that back here and app. year. entered to history, look pass Totally monthly And imagine, at revenue performance a and clear lot

will like seeing be studios impacted, in virtual for there's any our virtual customer need what we're Absolutely. here are So, studio, But from we such closed? world. especially coaching a other while company here, a

to excelled we've so And strategy and the content focus that’s community providing. adding always our coaching that

kind environment. Now we're through thinking potentially managing recessionary how a that's of in

here. a snap clear, of behavior And more I our back why be plans, mentioned will we're wide be a quick for scenarios, to for forming we're the months. expecting assuming consumer We're not a few and prepared economy impacted than that range

if any And a some recruitment, in in some as just if things areas, have trends curious geographies pandemic trends or on you've quick specific seen this any comments, patterns other you've follow-up in seen improved emerging?

the particularly has consistent. global. as digital in been well Yes. The impact been It's pretty recovery, as

so you Great. much. Thank

Thanks.

Edward will Capital Yruma from question next KeyBanc come Markets. go Our ahead. Please with

think traditional studio the impact And your temporary and customer length while Thank I you question. rent, on of the you. closures? of it do perspective? guys. is retention opportunities second, you of guess, What are are that teams. I my behaviors hope despite the And months. guess still first, studio And well from landlords? relief for any kind I you stay some from seeing Hey, potential see mentioned, and of a closed? assume that studios is fair you business, as Thanks virtual as retention kind paying think is all given around to studio your guess, XX may are their taking have hope I you studios I about then the

Yes.

the take first. Let real me estate question

third We of X,XXX my party those, we in for them. States. pay the illustration use back Going to United when locations

On the lease branded imagine. have you XXX our as obligations, studios, can we fulfilling been

are environment. forward be this We conversations we and the in going landlords will with in

been virtual haven't product pleased content, of adding pleased of the I rates, terms that so In our retention in and studio I've us. working quickly has that for uptick been months. to predict held I'm can't strategy a and meaningful Obviously, but retention, has that we transitioning at seen cancellation well a future, XX

Thank you.

Nagel Our next from with Oppenheimer. go question comes Please Brian ahead.

you taking my Good for afternoon. questions. Thank

this But trend trend, last So, weeks. you've questions. growth improving the I of mean, of seen a follow-ups really want from just prior during subscriber couple improving to -- -- a the on I bit that we've focused last to

historically I the this drive prepared better. that served as to Easter trend or So up a served that's you improved stepped of understand comments, later? there. mentioned there catalyst as Easter your also messaging Is part WW helped on In as

ways. two it take we So

we we But in team membership this couple is social we've market. content running entire digital that as of seen it's for I ramped every in both world where our in of machine, the growth kind stories, had that said, I past And when well did we TV As pivoted, weeks, said withdrew in up real remarks, our we've real piece as my prepared people, the The that been uptick. started, crisis what as of platforms. real we support. digital content

so And been relevant tenor the environment. to has tone and the obviously

of the also for campaign message that from phase members, we're of we're you. our will TV next is here really here inclusive But, real and Our you, launch. including Oprah,

needs, here that weight all part community wellness that. being certainly, of and being part your of for are We

I think that to we listen is message and So time. I And resonating. do in think ability hear have this real

both So work we'll marketing in the have what the as And the highest well is, do the where of have as is continue degree to teams what terms done content flexibility the are. that. content to platforms of

that to Mindy. follow-up a as then And helpful. very That's

companies through speaking been I've with of type As crisis. a number consumer this

is rates hearing theme rather declining one digital I'm for So consistently marketing.

of -- you well. So a these your you back result laid and to is, as I rates? heard pull is saving we the to But your you lead you it rates? seeing declining even as out And could your you out I as that don’t Nick that comments, into think, potentially, begin would are costs, lower guess know recognizing further marketing goes have very question I this

the Nick our and if going we've it outlined performance in it's we working to efficiencies, see cost we spend see area, what we're as going efficiency, have said, has we're because even particularly marketing impact. Look, to what if doing great against and

much. very you Thank

Thank you.

UBS. Michael Our with from will ahead. Lasser come go next question Please

you digital you how straightforward, The know thinking your quarter? least Nick, Can trying I model is but pretty modeling how difficult. providing not uniquely some help second but about business, second quarter evening. for Thank framing we business guidance, we taking provide should in on is question. the Good the studio be be studio should to business? you're my at that all

Yes. Hi, Michael.

retention two having at look say, growing been encouraging. very bright as also Having the revenue of and has in XX trends components the the the business a at last you clearly weeks hold spot. you digital If is months,

recruits of the course, So, they middle the through on the revenue March two been studio remaining have weak. very key side factors of now, from

think total million the of in that end as primarily weak X.X is I decline subscribers million from reflective to of recruitment so quarter studio the since the And X environment.

of So the revenue think of And, through revenue the the studio is that. end QX. I by impacted is impacting picture course studios May, the what being QX factor for closed was main

very been fact our right growing studios revenue while where contributor studios can the that that the QX other sales. ecommerce with are products the mentioned, the we've business, fantastically, picture any as pleased to final ecommerce it's not in The is unlikely ecommerce in But, our in Mindy closed. product growth now. Yes, our offset the it's unlikely consumer that we're selling

us side. the can moving course, see make we our that we you on think But the can. less margins the our structure parts margin. revenue And sure on of side, cost very I cost revenue quickly hurts aspect maintain where course, of are on of then to moving So, every those

-- weeks -- from But from missed the you closed, I if sorry this. the studio do subscribers? paid so I'm are when your collect studios revenue from as

as pivot it's note to I So, that this think the online really made as and digital enhance well providing we important studios, as that well actually as Connect virtual Group, we're to content,

that is as well retention new holding support of which and is members why with Connect in at enhanced as coach months. our level studio XX the same their our between, Groups community,

Absolutely.

But maybe week they out the that, once in month? retention not because in don't they're -- getting go indications those paid business have to any runs to see their your value find don't and fall the they are that anyone studio coming members you that you're going in

in think community. you that were all continue their assets pipeline. We're they to of obviously the we launched to want serve the start learn focused to going relationship sort heard our members what much we've as maintain then members and we'll on our need and what And with as providing support I And reopening to all studios, as what we're of possible. lot assets them And a obviously members that have.

much, very you good and Understood. Thank luck.

Thanks.

the Mindy I Grossman question-and-answer to closing would conference like over back concludes turn any This our remarks. session. to for

certainly We're human focused confident on impact to at in community been that as position everyone. heart we you, serve our has And to but a thank only today, the right the members what not through do. Well, technology. WW always actions we're creating delivering leader best of

to engagement. also and I to members connect. that But think meaningful maximize our to allow even consumer us important diversify our it's going base today communities allow existing create more it's to

healthy consumers and So members continue prioritize positions and We're created personal ways future. the for focus heightened combined and weight going authentic. us well and loss, need in to to with leadership to I are content, our coaching, living and solutions awareness thought that believe community, for that this

thank for again, once and for innovate the our always to at to WW forefront, and our and to and want really WW. I passionate members And continuing team, keeping them create value talented for

So joining thanks, look well. for us everyone everyone today. I you forward to and soon. again I with are hope yours speaking And

conference presentation. today's The now you attending Thank is concluded. for

now disconnect. You may