Weight Watchers' Friend Is Its Enemy: Fitness Trackers

Membership, revenue slid in 4th quarter
By Arden Dier,  Newser Staff
Posted Feb 27, 2015 12:39 PM CST
Weight Watchers' Friend Is Its Enemy: Fitness Trackers
IMAGE DISTRIBUTED FOR WEIGHT WATCHERS: Jennifer Hudson, top center, poses with B'more Fit members at a Weight Watchers event, Jan. 21, 2014, in Baltimore.   (Nick Wass/AP Images for Weight Watchers)

The booming fitness-tracker trend is making it easier for people to track their activity and therefore lose weight, which is essentially what Weight Watchers has been trying to do since 1961. The company has encouraged subscribers to use devices like Fitbit and Jawbone—and even has its own ActiveLink device. But while use of such devices soar (VentureBeat in November pointed to research that estimated 19 million trackers were in use in 2014, with that number slated to triple by 2018), Weight Watchers' membership keeps falling. It sank 15% in Q4 to a hair over 2.5 million subscribers, who pay a minimum of $20 for the service; Bloomberg points out that once a user invests in a tracker, the associated tracking apps are free.

In early 2013, Weight Watchers didn't seem concerned by wearable devices. It acknowledged a challenge "similar to what we saw back in 2000 with the low-carb diet fad" a few months later. Now it's taking a hit: Revenue slid 10% to $327.8 million in the fourth quarter, and as of yesterday its share price had declined 78% over three years. It expects profit of 40 cents to 70 cents per share in 2015, while analysts had estimated profit of $1.43 per share, the Wall Street Journal reports. The company has announced a deal with Humana to bring discounted diet programs to certain health insurance plans, which an analyst suggests is the company's best option, but it will also undergo cost-cutting measures, including layoffs, to save $100 million. North American President Lesya Lysyj has already been let go. (More WeightWatchers stories.)

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