Q4 2021 WW International Inc Earnings Call
[music].
Yeah.
Good day and welcome to the Ww International fourth quarter 2021 earnings conference call.
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Thank you everyone for joining us today for Ww International's fourth quarter and full year 2021 conference call.
Four P M. Eastern time today issued a press release reporting our fourth quarter and full year 2021 results.
This call is to provide investors with some further details regarding the company's financial results as well as to provide a general update on the company's progress. The press releases are available on the company's corporate website located at Www Supper.
Supplemental investor materials are also available on the company's corporate website in the investors section under presentations and events.
Conciliation of non-GAAP measures disclosed on this conference call to the most directly comparable GAAP financial measures are also available as part of the press release.
Before we begin let me remind everyone that this call will contain forward looking statements investors should be aware that any forward looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those discussed here today.
Risk factors are explained in detail in the company's filings with the Securities and Exchange Commission.
These filings for a more detailed discussion of forward looking statements and the risks and uncertainties of such statements. All forward looking statements are made as of today and as required by law.
Undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information future events or otherwise joining.
Joining today's call are Mindy Grossman, President and CEO , Mike Hopkins, CLO and CFO I'll now turn the call over to Mindy.
Thank you Corey and good afternoon, everyone.
I would like to start by speaking to last week's announcement X C message, Dan he will be joining ww as our new CEO as of March 26.
Do you know has a strong background at the intersection of media and technology and has a track record of building powerful digital community.
She loves the founder and CEO of House Party, a face to face synchronous social network and community focused on bringing support and empathy to online education.
Under her leadership it grew into a community of over 115 million users and in 2019. She led the sale of the brand to epic games, where she served as the senior executives, leading social gameplay and feature development for their gaming products, including Fortnite.
She also held leadership positions at both Yahoo, mobile and Tumblr.
I've known CMS for every two years and feel she has the right individual to lead Ww, she's a visionary and entrepreneur and inspired leader.
Our proven track record in building and scaling businesses, our ability to innovate our depth of experience in products technology digital community building and her passion drive and focus on purpose. So aligns with the W. W mission and business.
She is also a health and wellness enthusiastic and proud Ww member.
Know that she is excited to be leading the team to the next phase of growth for the brand and the business.
Now turning to our 2021 results.
And personal points launch.
Looking back in many ways 2021 was an unusual year with consumers undergoing several shifts in sentiment and behavior.
With these changes we maintained rigorous prioritization as we accelerated our digital transformation.
Developing and launching our newest program innovation personal points.
Adding an entirely new coaching and content experience and digital 360 <unk>.
Enhancing our e-commerce experience and product portfolio and investing for the future and health care in diabetes.
At the start of 2021 my Ww plus our first Nancy innovation, delivering a more interactive and personalized app experience than ever before accelerating our digital performance last winter.
This strong performance at the beginning of the year was difficult to sustain as consumer sentiment shifted joined the next phase of the COVID-19 environment.
Evidenced by industry wide declines in traffic and search trends for digital weight loss programs beginning in Q2.
At the same time, we were actively managing the COVID-19 related impact on our workshops business with subscriber levels being reduced to approximately half of pre COVID-19 levels. This created a significant subscriber and revenue headwind throughout 2021 .
We entered 2021 with four 2 million subscribers.
And just period digital scrubbers with $3 4 million down 7% year over year and end of period workshops described mers were 727000.
1% versus 2020.
142% versus year end 2019.
About the entire year, our cross functional teams are relentlessly focused on the development of personal points and its successful launch in November .
Personal points as an important step in our multiyear personalization journey I again would like to thank our dedicated employees, who are bringing this innovation to life can be.
Seamless synchronous launched more than 4 million members across 12 different countries and in seven languages.
Our winter 2022 marketing campaign amplified personal point.
The broad suite of assets to drive connection interesting action, including motivational and entertaining ads, featuring Oprah Winfrey, and James Corden as well as utilization of over 500 unique digital assets.
It's also gratifying to see Ww recognize our program effectiveness and digital innovation leadership.
In January Ww's weight loss leadership was recognized once again by U S News and World Report's health experts and their 2022 that's diet shrinking.
W. W. We changed the number one spot for both best diet for weight loss and best Diet program for the 12th consecutive year.
We also received high marks in the category of best side overall easiest diet, although that's diet for healthy eating and best diet for fast weight loss.
In addition, digital 360 <unk> was recently selected as a group.
ASCII being 2022 fitness awards winter being named good housekeeping Apt choice best for building habits. These accolades further build on the evidence that's W. W works delivering solutions that fit members lives and provide a livable path to sustainable weight management and healthy.
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The need for proven sustainable and accessible weight loss and wellness solutions is more important today than ever before.
And in a world, where digital has accelerated and technology has been an enabler. We are all still gradings physical interaction and human connection.
That's why Ww has such an important valuable role as people are looking for science backed community and coaching from the brands They trust.
I am confident that the company under the leadership of Shimon will continue to innovate be obsessed with data and focus on the critical priorities that will advance the business support our members and expand ww's impact around the world.
I will now turn the call over to Nick to discuss our current performance and our go forward strategy in more detail.
Thanks Mindy.
Echo how excited I am to while consumer as a new CEO .
Strong digital experience along with a passion for our mission.
And her insights and perspectives into community building will be invaluable to Ww.
Now I'd like to discuss our winter season performance and our key focus areas to improve our business trajectory in a challenging environment.
I'll sign up trends improved market since the launch of personal points member recruitment was down year over year, so far in 2022.
With similar declines in both digital.
As of February 19th subscribers for $4 5 million up approximately 9% from year end 2021.
This list is significantly below increases <unk> program innovation, yes.
Importantly, overall retention continues to be strong at about 10 five months and we are now.
Now seeing early signs that workshop retention is starting to rebound from COVID-19 impacted levels.
While the omnicom spike significantly impacted our results.
Examining all aspects of our business to drive performance improvements.
Our members have validated that we have a strong food program innovation and personal points.
However from a recent research Oh awesome.
Takeaways on the train comes from our mindset.
Our motivation to start a weight loss program.
While consumers acknowledged entrenched lose weight.
They are telling us that they are not motivated to commit to significant changes.
Instead <unk>.
Looking for easy methods small steps and personal support.
Therefore, it is imperative that ww digital experience to be easy and intuitive.
By science and with access to community and culture.
These insights are driving both top screen marketing approach and we will continue to inform our product development.
And agenda.
We are intensely focused on optimizing all aspects of them off.
While traffic across all consumer touch points has been lower versus prior years, a global marketing and data analytics teams are doing outstanding work in driving conversion and maximizing ROI on marketing spend.
In the U S. This performance monitoring approach delivered a 15% increase in conversion year over year. During the first seven weeks of the year, although offset by a significant drop in traffic.
We won't continue to invest in our performance marketing capabilities to ensure that we are making real time data informs decisions to drive site conversion.
As always we are highly focused on price realization and maximizing subscription LTV.
It's winter season, we have introduced a number of creative offers that are rooted in urgency and offer the best value for long continued commitment.
These have been successful with over 70% of all U S sign ups in January choosing a six month along with our plan.
About.
A year ago.
We have made significant strides in our digital experience over the last six years as demonstrated by our four eight star rated App.
And numerous awards.
However, we will continue to evolve our experience.
Our focus on personalization and DS and at the same time, bringing more coaching and community into our digital experience.
And then on first year offering digital 360, we gained valuable insights on how we can deliver coaching content and community in new ways.
They've been engagement community building and the personal lines expense are key elements of both member subsets.
And continued expansion of our attention.
As demand for in person one shops did not picked up in January .
We're actively assessing our cost structure and also mix.
At least studios flexible third party locations.
We believe in the power of in person community and accountability.
And the differentiation it delivers four members looking at high touch experience.
We are focused on delivering the experience and the availability of members demand.
I don't think the fixed and variable costs and all the turmoil at rents on workshops to being a 40% gross margin business.
In the U S market. We currently have a footprint some 400 city Ww branded studios and 650 studio apps or third party locations.
October severely impacted all by itself.
We are positioned to be able to flex and manage growth as the environment.
And people want to once again have the interest and support functions and the Ww community.
I'm excited by the opportunity for Ww to build the diabetes business.
First time Ww members, who indicate they have diabetes received a food plan, specifically tailored to their unique needs.
In just three months since launch 6%. Some U S. Members are now self reported of people living with diabetes.
Compared to the 12% prevalence of diabetes, among adults who are overweight or obese.
Demonstrating the incremental opportunity of serving this important segments.
We plan to introduce a dedicated W. W offering.
Please from content coaching and community specifically designed for people with diabetes later this year.
Turning to our consumer products business.
Essentially rebuilt our e-commerce business from scratch joined last June is.
Growing it from a 22 million revenue business in 2000 $19 million to $85 million in 2020 one.
We are focused on further expanding this important channel for incremental revenues.
Creasing member penetration the frequency of repeat orders and transaction value.
Through product bundling SKU expansion, particularly by our marketplace and drop ship partner licensing and <unk> and multichannel opportunities, we aim to enhance and expand our consumer products business.
As we grow this business and channels are conducting a thorough review of our supply chain opportunities and manage planning volume commitments and new product development process to preserve and expand margins as we profitably grow this business.
It's an important time.
With urgency.
And simplifying our canisters delek.
Dedicating resources time and talents on what is critical and presents the best return on investment.
Given the uncertainty of the environment, we continue to analyze and assess all areas of the business our revenue opportunities and cost structure.
I look forward to working with FEMA when she joined US later this month and I'm sure. We will have more to say on this.
Q1 call in May.
I'll now turn the call over joining me to review, our financial performance and outlook.
Thank you Nick.
We closed out Q4 with performance within the range of our most recent guidance.
Category demand and traffic continued to be a challenge for us in the quarter, resulting in modest pressure on revenue the impact of which was more than offset by strong gross margin and lower marketing spend.
For the full year 2021 we ended the year with $4 2 million subscribers down 6% from the prior year and in line with 2019.
Workshop end of period subscribers of 727000.
Up 1% year over year.
But down approximately 50% from pre pandemic levels.
Digital end of period subscribers, including 222000 decrease 60 subscribers were $3 4 million down 7%.
Revenue of one point to 1 billion was down 12% year over year, driven by a 38% decline in workshop revenue.
Digital revenue was $788 million or 65% of total revenue was up 6%.
Well E Commerce revenue was up 10% year over year total consumer products revenue of $117 million was down 11% as in studio product sales continued to be down significantly.
Adjusted gross margin of 61, 2% is up 300 basis points from the prior year.
Primarily driven by a combination of digital mix and fixed cost structure adjustments over the course of the year.
Full year marketing spend was flat to the prior year, while G&A was up $9 million on an adjusted basis, mostly related to temporary salary reductions in 2020.
Adjusted operating income of $216 million is in the middle of the guidance range, but down 24% versus the prior year driven almost entirely by volume decline.
2021 GAAP EPS of <unk> 95 cents was below prior year by search that's no that 2021 GAAP EPS reflected the 42 cents negative impact from one time items.
Related to cash flow and leverage ending cash of $154 million is net of $52 5 million of voluntary prepayments on the term loan.
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Operating cash flow of $157 million for the year remains strong with $175 million of revolver capacity.
We ended the year at 4.5 times that debt leverage which increased modestly from Q3.
Looking forward to 2022, we will not be providing full year guidance today.
We are continuing to evaluate consumer sentiment and a full year impact of current trends on the business and of course awaiting Siemens arrival how.
However, we will discuss how Q1 is shaping up.
While we saw a meaningful lift in recruitment compared to trailing trends upon the launch of personal points in Q4 recruitment is down versus the prior year on a quarter to date basis in 2022 in both workshop and digital.
As Nick mentioned through week, seven and its period subscribers of $4 5 million are up approximately 9% from year end 2021.
Which is far below increases we have typically experienced with prior food program innovations.
We expect to end the quarter at roughly the same level of approximately $4 5 million.
Which would result in end of period subscribers at the end of Q1 to be down in the mid to high single digits compared to the prior year and in line with Q1 of 2019, but with a mix of approximately 85% digital.
Given the year over year recruitment declines plus the lower incoming subscribe for headwind from 'twenty to 'twenty, one of approximately $30 million, which has increased from our prior estimate of 25 million.
Revenue in Q1 is expected to be down year over year to approximately $300 million.
For Q1, we expect operating income to decline from the prior year reserve.
<unk> and an adjusted operating loss in the mid to high single digit millions.
And EPS is expected to be a loss in the range of 26 to 31 cents.
For the balance of the year, we are planning cautiously as the demand environment has proven to be difficult to predict if the current trends continue and if there is a normal slope of decline from Q1 into Q4 and subscribers than end of period subscribers revenue and adjusted.
Operating income will be down year over year in 2022.
As Nick mentioned you can expect in this environment, we will be focused on cost management.
We have prudently managed costs during times of uncertainty in the past, particularly with the workshop fixed cost structure.
Balancing near term profitability with driving long term growth.
Given the softer start to the 2022 diet season compared to other food program innovations, we must reevaluate our cost structure across the board.
That work has been ongoing.
Note that Ww has an attractive profitable business model that generates significant operating cash flow with low capital expenditures.
Our recent refinancing has significantly lowered our weighted average cost of debt and mandatory repayments.
While our leverage ratio will likely increase in the quarters ahead, reducing our leverage and our debt balance remain capital structure priorities for Ww.
Our executive team and board are focused on getting the company back on track to profitable growth as Nick mentioned, we are conducting a thorough analysis of all of our business lines assassinating assessing the revenue opportunities cost structure and profitability potential in order to drive.
Performance improvement profitability and value for shareholders I will now turn the call back to Mindy.
Thank you Amy.
As you heard today the team is focused on managing through the near term and optimizing for the future the.
The organization is acting with purpose and intense prioritization to drive value for the business as well as Ww members around the world.
I'd like to thank all our WJ employees.
Our amazing coaches, our executive Committee.
Board of directors, particularly ready Devine and Oprah Winfrey, our partners ambassadors and our members for all of the experiences over my nearly four and a half years at Ww.
I will always be part of the Ww family and look forward to watching the company's continued journey successes and positive impact on millions of lives around the world.
Thank you for joining us today, and we're now happy to take your questions.
We will now begin the question and answer session to ask a question Jimmy Press Star then one on your Touchtone phone.
If he is using a speakerphone please pick up the handset before pressing the keys.
My final question has been addressed and you would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble those too.
Our first question comes from Greg Faddish Kenyon with Wolfe Research. Please go ahead.
Good afternoon. This is Spencer hanus on for Greg can you just unpack this diet season, a bit more and comment on how much of the slowdown it's been driven by marketing not driving recruitment versus kind of environment or just a general malaise with guiding and then should we look at look to 2023 diet season is the next opportunity to rebuild subs.
Could you stand on seasonal bump in recruitment this year.
So.
Sign up trends.
Launch personal point.
But not to the degree that we have.
Seen it in other seasons.
Other thing to note if you look throughout the year.
Our planning conservatively because it's.
Hi, Amit.
Oh Q1 was that significant.
Got it.
The.
Challenges throughout the environment.
In Q2.
So although traffic and search right now continues to be under pressure that the industry wide trend and we're working hard to maximize.
Retention as.
As well as our performance marketing, which is why you saw a significant increase in our conversion up 15% just for the first seven weeks of 2022.
So the marketing messages and ambassadors are resonating well, we are focused on and what the industry as a whole we need the traffic momentum to pick up but again, we're circling again.
Softer comps.
Right got it.
Just to add just add some color.
Absolutely right.
Personal points back in November we saw about 27 percentage point lift compared to trick to trailing trends on a year over year basis, we saw a program.
Working but what category demand.
Has been industry wide we've seen.
[noise] pressuring traffic. So for example in.
Program.
For example, if you just look at <unk>.
It's down 20% so well.
Morning.
The prior year, it's just not offsetting.
The level of pressure that we're getting from the category.
Got it that's helpful. And then how should we think about the size of the cost cutting opportunity in the business. How close can you get back to that 2017, SG&A spend level and then with marketing do you see any opportunity to drive greater efficiency out of that line as well.
Yeah. So I'll start on the G&A expenses I think it's just too soon to tell.
Great. We're looking we're looking at every opportunity across the board to evaluate the cost structure.
And I both mentioned in the script.
I think so.
Looking forward.
We hope to be able to share our plans with FEMA as a new CEO transition.
And hope to provide you more color on that.
Yeah.
You know as it relates to marketing.
And Nick jump in.
Okay, I think that's right.
No what we're assessing all areas of our business.
We've seen our track record of nimbly.
Uh huh.
Costs, but from a marketing standpoint.
But also being nimble and getting our messaging.
As we head into the spring campaign, Oh are responding to our consumer research.
Earnings and continuing the teams very strong.
Performance marketing.
Hum.
And games have been diminished.
I think one that we talked about.
Conversion as well as retention.
In addition, we're seeing sign ups to longer tenure plant.
So over 70% of sign ups are greater than six months versus 50% last year.
And we're still seeing a significant number of sign ups from new members and the mix of lap and new is fairly consistent and then cancels are down year on year.
That really speaks to the strength of the program.
Yeah got it great well. Thank you so much.
Our next question comes from Lauren Chung with Morgan Stanley . Please go ahead.
Great. Thanks for taking my question I guess.
How should we think about the studio footprint and relative opportunity over the medium to long term.
I guess is there a scenario where that becomes you know a very very small piece of the business and kind of what would the margin structure of the company look like if that were the case and then I guess you know if this is more macro driven and perhaps you know the world goes back to two to more normal trends the back half of the year in that.
Macro backdrop would you expect your subscriber growth to accelerate through the course of the year and I guess, what what sort of macro changes are you looking towards in order to see the business reaccelerate. Thanks.
I'm talking about the studio business like first of all new coaching is just so important to us.
Strategically that's why you don't during Covid relaunch the.
Virtual workshops as an example.
Person.
For some communities and Accountabilities special Hallmark about competitive.
Differentiation I've been proud.
The fact that drilling COVID-19 , we've been able to optimize our footprint.
The mix of our retail.
No our footprint from Ww brand New studios to more flexible as to use your words and that's Oh, you have you seen that have.
I have a strong impact on our margin starting to rebound and we believe we can make studios of 40%.
Margin business, frankly, as demand for in person rebounds, but well positioned with a very flexible footprint and cost structure and still nationwide coverage to be able to serve people in person once again.
Okay.
I would add to that is.
Really good progress on taking out fixed costs from the works from the workshop line of business over time I mean, if you look at our end of period subscribers.
At the end of 2021 were down 42% compared to 2019.
For workshop gross margin.
Close to 36% and so we've been really responsive to manage it managing that cost structure over time and we'll continue.
I mean any comment on the on the macro.
Sure.
We're having a hard time hearing it can.
Can you repeat that last part.
Yeah, just you know if if we do end up in a world where things could they be open in the back half of the year would you expect subscriber trends to accelerate through the course of the year I guess just high level kind of what are some of the macro factors that you're looking at to two to monitor potentially the reacceleration of the business.
Yeah Laurence.
We have been doing.
Constant.
Qualitative and quantitative.
Analysis of everything that's happening by marketing and consumer behavior.
To your point as we start to see things list, we would hope that we would see further momentum, especially against the comps that we have.
Right now because of the uncertainty we're planning with ruthless prioritization, but on the flip side, we can ramp up very quickly as we see demand increase.
Okay. Thank you.
Our next question comes from Steph Wissink.
Jeffrey Please go ahead.
Thank you good afternoon, everyone I wanted to follow up on just the debriefing or diagnostics on what you learned in November and December and then what changed in January .
It sounds like you had a pretty good start to the points program launch, but then something shifted just wanted to understand a little bit more about what you noticed what you were able to do inter quarter, and then give us some sense and maybe this is to Laurence prior question.
Do you have any plans over the course of the next three to six months to target. Those cohorts that you think are the most likely to convert or to extend the lifecycle of those that are on longer term plan. Thank you.
Just to be clear, we saw momentum in personal points throughout.
November December January not just at historical highs so significantly up from where we were so it wasn't like you know.
Disruption.
Clearly we did see some disruption if you look at kind of where we are and workshops with kind of increase and in Africa.
So I just wanted to level set.
You know that.
The personal points trajectory.
And from it.
100% so.
The challenge that we've been having.
Category demand.
So you know search and traffic has been down significantly so while we've seen an increase in demand.
Two personal point, that's coming from a much lower base right. So that that's been our challenge and we haven't seen that getting better or getting worse as we head as we headed into January it's been a it's been about the same.
Okay. That's helpful. And then just on the workshops I know you've talked about.
He knows more variable model and you talked about the fourth quarter step up in margins.
How do you think about the structural margins of that segment relative to maybe your historic average and what you think you can achieve.
To the point of it if traffic does start to come back and level out across your digital and your workshop business.
Yes, I can I can start on that one.
The moves that we've made in the workshop business is really you know first and foremost is making sure that all of our members.
Have the opportunity and access for <unk>.
These environment, but what we've been doing is flipping fixed cost structure to a variable cost structure. So moving away from lease spaces that have been more inefficient to more pay as you go model.
We call our studio ads and so well you know we got up to about 36% gross margin in Q4.
Yes.
Thank you.
We can absorb and leverage a lot more demand in the same fixed cost structure. So so while I won't commit to going.
Over the 40% that we were pre pandemic, we're well positioned in a more efficient model.
To get back there.
As demand returns in addition to that we also have our virtual workshop model, which.
Oh of course has a very low fixed cost structure and a high high contribution margin. So I think we're really well positioned.
As demand begins to return, but as Mindy said before we continue to plan cautiously.
How were planning the business is is not assuming a rebound of demand.
Well positioned for it.
And it happened.
Okay. Thank.
Thank you very much.
Our next question comes from Linda Bolton Weiser with D. A Davidson. Please go ahead.
Hi.
Thank them. According to my calculation the services gross margin was actually down year over year in the fourth quarter.
That seems unusual with the shift towards digital so is there any particular reason why that gross margin was down in the fourth quarter.
Oh, our digital so.
Overall, our gross margin our gross margin in the quarter was up slightly 10 basis points.
Year over year basis.
Digital was just under 80% at 78% workshop margin improve sequentially.
You know theres nothing Theres nothing specific in there I mean, there's still an incredibly strong with strong gross margin in the digital business we continue.
We've found that economic value.
Driving demand in this environment, we've been trading that off for a couple of things one longer term commitment plans and many you mentioned this before.
90% of sign ups are on six months or longer so we could be trading a little bit of margin for increased retention strategy, but.
Oh, no no significant changes there.
So it wasn't the same gross margin for the quarter. It shows the power of it.
Okay and then.
You know I I follow a public company called met a fast which has the opposite via it's it's a food based program and they are now bigger than your so there they're the largest publicly traded company and weight loss by revenue now and there are still experiencing strong growth. They expect strong growth here in the first quarter.
We had strong growth in the fourth quarter.
They're reporting that their consumer research shows that the pandemic has made people aware that health and wellness is important and that people are very focused on that and have.
A certain percentage of Americans have have goals to become healthier. So it just seems like their research and the trends that they are kind of reporting our way different than yours. So are you aware of their program have you researched it like can you just kind of give a little color on what what your thoughts are there.
And they were very familiar and again I can't speak to their research versus our research is obviously is a very different.
Isn't this model.
In terms of really selling products and food programs, but like every other area of competition. We're certainly focused on you know everyone in the category, but again I want to be specific it's a very different business model.
Yeah. That's that's true thank you and then.
You know I mean, your new C. E O is going to come in and she's going to try to diagnose you know what the issue is because as a leader in weight loss. One of your objectives has to be to drive interest in the category as well as to maintain or gain market share.
So.
I mean is there are.
Are you just kind of throwing up your hands and say well, we'll just wait for her or is there something that you can do to change.
Things this year in 2022 or is it really just a 'twenty 'twenty three six would be the earliest that we could see improvement.
To be clear, there's no throwing up our hands I mean, the team has been very very focused over the last number of years.
If you recall, how we were going into 2020 and if you think about a significant proportion of our business, which has been in the workshop is not.
It was completely shut down.
So where we pivoted the model built to virtual to be able to balance that as much continued to invest.
Invest in our digital assets or marketing or commerce, as well as revamping our entire health solutions business. So I would in no way shape or form, saying, we're just waiting for someone to come in and wave a magic wand. The team is doing a significant.
In the amount of work, which is what we've been trying to articulate so we can accelerate our business throughout the year.
See what we can do and being able to use the flexibility of our business model.
Okay. Thank you very much.
Our next question comes from Doug Lane with Lane Research. Please go ahead.
Yes, hi, good evening everybody.
Just I.
I guess my question is if doing this reevaluation process you did decide.
You didn't need to be in the studio business, how long and how difficult would it be for you to completely exit that business. If that's what the decision was.
I think that decision is so hard to comprehend.
As we said no.
It's in the community and the coaching and how that interacts with.
Without leaving a digital platform and making out just like experience easy and intuitive we think there's huge value and the combination of our in real life.
With our leading digital platform.
Okay Fair enough and then the other topic I wanted to talk about was the digital marketing environment.
You know rates are up and it's been a lot of shifts.
And the whole.
Environment and I was just wondering how what you're seeing what you're seeing with costs, what you're seeing with the shift of how your go to market digitally and how that's impacting your 2022 strategies.
Yeah.
Focus on.
Digital performance marketing has been very important as we look to maximize our ROI on the marketing spend and she made huge strides in 'twenty one building global capabilities.
No channels such as.
Paid search and email are working well for us.
Rebound charter approach to social Oh also I think the tailwind we're looking for.
As we said in terms of coming out of a very unusual year, but people are making fewer new year's resolutions.
Tailwind, we're looking for is overall category demand.
The lift to bring.
Traffic to our site in the meantime, we're doing all we can to offset that traffic environment.
Focus on conversion and getting people to sign up for a longer tenured funds at the outset.
Okay. Thanks, Nick.
Yes.
All for joining us today, I certainly want to recognize all of the Ww teams around the world for their talent passion and commitment to our brands and our business over the course of my tenure.
And I truly believe that the long term opportunity.
You W is significant our leadership position in weight management, our science, our attractive business model and unique competitive advantages.
And finally I want to once again welcome FEMA I know she looks forward to working with all of you in the future.
Yeah.
[music].
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.