Weight Watchers International CEO Linda Huett provided data about WeightWatchers.com on her Q4 '04 earnings conference call. These are important stats for investors in eDiets (ticker: DIET) and those tracking eCommerce growth generally. Here are the relevant quotes, plus comments:
WeightWatchers.com has continued to strengthen its position as the leading online weight loss company in the world. WeightWatchers.com is now more than twice the size of its nearest competitor, based on revenues. And, unlike its nearest competitors, it is a very profitable company.
For the fourth quarter, WeightWatchers.com generated around $19m in revenue, and an operating margin approaching 20% after paying us our 10% royalty. WeightWatchers.com continues to invest heavily in its technology platform, in improving the products it offers, and in building a global infrastructure.
In 2004, they successfully launched the subscription product in Germany, their fourth subscription market. They also innovated their offering with the introduction of On the Go, a PDA application. And they’ve set the stage for additional subscription site launches in 2005 and thereafter.
WeightWatchers.com’s royalty to Weight Watchers, International for the year was $8.2m, up 15.3% over prior year. Equally important, WeightWatchers.com has continued to provide a strong online marketing presence for the brand.
(Quotes are from the CCBN StreetEvents transcript.)
- Huett said that WeightWatchers.com paid Weight Watchers International a 10% royalty of $8.2 million for the full year 2004. That means that WeightWatchers.com revenue was $82 million.
- Compare that to eDiets (ticker: DIET) 2004 revenue of $45.4 million, $39.2 million of which came from membership fees. Thus the comment "more than twice the size of its nearest competitor, based on revenues".
- WeightWatchers.com revenue grew 10% sequentially in Q4. The likely reason? Weight Watchers International's business is rebounding due to the fading of the low-carb diet craze and the publication of scientific studies which show that low carb diets are less effective than broad-based calorie control at long-term weight loss.
- In contrast, eDiets' Q4 revenue fell sequentially to $11.1 million from $11.8 million in Q3.
- WeightWatchers.com is an affiliate and licensee of Weight Watchers International, which also owns 20% of WeightWatchers.com.