MW More turnover at the top, but this bull still believes in the Weight Watchers parent
By Ciara Linnane
CFO to depart at year-end in move that comes after CEO exited in September
WW International Inc., the company known as WeightWatchers, announced the departure of its finance chief on Wednesday, the latest executive move at the diet company since the exit of its CEO in September.
The New York-based company said Felicia DellaFortuna will become chief financial officer effective Jan. 1, replacing Heather Stark, who will remain at the company through Dec. 27.
The news was announced by Tara Comonte, who is interim CEO after the company parted ways with Sima Sistani on Sept. 27. Comonte served as CEO of TMRW Life Sciences before taking on her WW $(WW)$ role, and prior to that, was president and CFO of Shake Shack.
DellaFortuna comes from Enthusiast Gaming, a gaming media platform. Before that, she served as CFO of BuzzFeed Inc.
The latest executive shake-up comes at a time when the stock has been volatile, gaining about 24% in the last three months after announcing it would add compounded GLP-1 obesity treatments to its offering.
Under Food and Drug Administration rules, drugs that are in short supply can be made by compounding pharmacies, creating medications that are identical to, or almost identical to, the drug in shortage, in this case, the weight-loss drugs that have become highly popular.
But the stock remains deeply in the red in the year to date, after disappointing quarterly results and a restructuring plan that will see it cut headcount.
The stock fell below $1 for the first time in August, after second-quarter earnings showed a halving of profit. It closed Tuesday at $1.25 and is down 85.7% year-to-date, while the S&P 500 has gained 26%.
That's a far cry from the days when the company boasted billionaire talk-show host Oprah Winfrey as a director and spokesperson, sending the stock to an all-time high of $103.09 on June 20, 20218.
One bank views the stock favorably, however. D.A. Davidson has WW in its "STAMPEDE" ideas list, which is based on its bison trademark.
STAMPEDE is an acronym for spinoffs, take-outs, activists, management change, portfolio restructuring, excess cash, disruptive regulatory risk and equity/debt recapitalizations.
The list is compiled and updated by the bank's analysts, who select the names based on their untapped value.
In the case of WW, analyst Linda Bolton Weiser assigned the stock a buy rating back in March, in a note framed around the question, "Why would an investor be interested in investing in WW, which prescribes the weight loss drug, when they could invest in Eli Lilly $(LLY)$LLY or Novo Nordisk $(NVO)$ (DK:NOVO.B), the makers of the drug?"
As the company was trying to explain at the time, WW had moved toward promoting wellness, over weight loss, one of the reasons for its name change back in 2018.
"People taking these drugs need a lot more than the script-they need advice on what to do when they over-ate at a restaurant and are now puking their guts out," the analyst wrote.
"They need advice on whether to keep taking the drug after they have hit their goal weight. They need advice on what to do with their flabby excess skin once they have lost 100 pounds. THAT'S why an investor would buy WW instead of LLY or NVO."
-Ciara Linnane
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(END) Dow Jones Newswires
November 27, 2024 08:30 ET (13:30 GMT)
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