WeightWatchers just handed CEO Sima Sistani her walking papers after one of the most brutal years in the diet company’s 61-year history. But, but, but…  if you think that’s the biggest surprise, it's not. Why? Well, because they’ve just called in a burger chain exec (out of all people) to steer the ship (LOL). 

(Source: Bloomberg) 

Tara Comonte, former Shake Shack bigwig and all-around corporate fixer-upper, has been tapped as interim CEO to clean up the mess. Spoiler alert: the mess is a clusterf***k

(Source: Giphy) 

In short, we all know WeightWatchers was once the darling of the diet world, with its Oprah-endorsed “lifestyle change” gospel and points system that made counting calories feel like a fun game. But lately, it’s been about as relevant as Myspace - as Sistani, who took over in 2022, thought she could inject some life (and profits) into the company by jumping on the weight-loss drug bandwagon. 

(Source: CNN) 

This led them to acquire Sequence, a telehealth platform that could hook members up with the latest frenzy in weight loss — GLP-1 drugs like Ozempic and Wegovy. The idea? Pivot WW from its preachy support group meetings to a more modern, clinical approach that embraced the magic of pharmaceuticals. Meaning, why starve when you can just inject the fat loss juice yourself, amirite? Wrongo. 

(Source: Giphy) 

Turns out, people don’t need WeightWatchers to play middleman when they can just get the drugs straight from their doctors or other telehealth platforms. The result? A 10.9% revenue slide in the last quarter, and a stock price that’s currently limping along at under $1 (-90% YTD). 

To add insult to injury, Oprah is now out, and so is hope. Simply put, the queen of daytime TV and WW’s biggest hype woman peaced out of the board earlier this year, leaving the company to fend for itself. Now sure, this may not seem like a big deal on the surface, but remember - Oprah bought a 10% stake in 2015, sending the stock soaring like it was a new car giveaway at the time. But with her exit, it’s now a stark indicator that GLP-1s are making “lifestyle changing” companies look like relics of the past. 

(Source: LA Times) 

For investors this result has been blistering as WeightWatchers’ market cap has shriveled to a paltry $68 million. For context, that’s down from nearly $700 million at the start of the year. So, yeah… it’s atrocious for you WW investors. 

(Source: Giphy) 

With that said though, what’s the outlook now? Well, WeightWatchers is betting that Tara Comonte — who probably knows more about flipping burgers than flipping diets – can somehow turn things around. The company’s board seems convinced that she’s got the chops to “sharpen its strategic focus” and evolve its “behavioral and clinical offerings.” Whatever that means.

(Source: CityBiz) 

But here’s the deal: Comonte’s got a $100 million cost-cutting plan on her plate, which sounds less like a strategy and more like an emergency diet for an already-starving company. WeightWatchers has been slashing jobs left and right, trying to stay afloat while staring down a $1.4 billion debt load. The good news (if you can call it that) is they’ve got until 2028 before that debt becomes a real problem. The bad news? That looming cash crunch speculation isn’t going anywhere.

(Source: S&P Global) 

So clearly, WW’s got a lot riding on its so-called “total human approach,” which is basically corporate-speak for combining drugs, support, and behavior change. However, the problem is we now live in a world  where you can get crazy effective weight-loss meds faster than you can order a pizza, so is anyone really going to pay for WeightWatchers’ hand-holding? Probably not. 

(Source: Giphy) 

The reality is, GLP-1s are disrupting the weight-loss industry to it’s core. And Comonte’s going to need more than a Shake Shack playbook to make this work. But unless Comonte can pull off a miracle (highly doubt it), WW could be staring down the barrel of a crash diet… and we all know how those usually end. Disaster.

In the meantime, only time will tell if WW can figure it’s ish out… but while we all wait to see, have a great Saturday friends! Until next time…

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Stocks.News doesn’t hold any positions in companies mentioned in the article.