Weight Watchers Might Be Failing You

Posted: Sunday, November 01, 2015

Weight Watchers Might Be Failing You

Margins matter. The more Weight Watchers International  keeps of each buck it earns in revenue, the more money it has to invest in growth, fund new proper plans, or (gasp! ) distribute to shareholders. Healthful margins often separate pretenders from the best stocks and shares in the market. I am looking for the complete numbers, comparisons to industry peers and competitors, and any trend that may tell me how strong Weight Watchers International’s competitive position could be. This the current margin overview for Weight Watchers Global and some of its sector and industry peers and direct competitors.

Sadly, that table doesn’t inform us much about where Weight Watchers International has been, or where it’s going. A company with rising gross and working margins often fuels the growth by increasing demand for its products. If it sells more models while keeping costs in check, its profitability boosts. Conversely, a company with gross margins that ” downward over time is often losing out to competition, and perhaps engaging in a race to the bottom on prices. If it can’t make up for this problem by slicing costs and most companies can’t then both the business and its stocks face a decidedly hopeless outlook.

Naturally , over the short term, the type of financial shocks we recently experienced can drastically affect a company’s profitability. That’s why I like to look at 5 fiscal years’ worth of margins, combined with the results for the trailing 12 weeks (TTM), the last fiscal year, and last financial quarter (LFQ). You can’t always reach a hard conclusion about your company’s health, but you can better understand what to expect, and what to watch.