WW International Inc (WW) 2021 Q3 法說會逐字稿

Good afternoon, and welcome to the WW International Third Quarter 2021 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded.

I would now like to turn the conference over to Corey Kinger, Investor Relations. Please go ahead.

Thank you to everyone for joining us today for WW International's Third Quarter 2021 Conference Call. At about 4:00 p.m. Eastern Time today, we issued a press release reporting our third quarter 2021 results. The purpose of 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 release is available on the company's corporate website located at corporate.ww.com. Supplemental investor materials are also available on the company's corporate website in the Investors section under Presentations & Events. Reconciliations 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. These risk factors are explained in detail in the company's filings with the Securities and Exchange Commission.

Please refer to 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 except as required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Joining today's call are Mindy Grossman, President and CEO; Nick Hotchkin, COO; and Amy O'Keefe, CFO. I will now turn the call over to Mindy.

Thanks, Corey. Good afternoon, everyone. Before we get started, I want to give context to the announcement last month about my decision to step down as President and CEO of WW after the first quarter of 2022. When I joined Weight Watchers in July 2017 to lead the transformation of the brand, I knew it was an opportunity to have both a business impact and a human impact.

Our purpose, we inspire healthy habits for real life, for people, families, communities, the world, for everyone, to be the brand that can democratize wellness for all is truly what WW represents today. We have transformed digitally, creating a holistic weight and wellness ecosystem, expanded and diversified our member base and leveraged the power of community at the core of all that we do. I am proud to have built and led the extraordinary WW team through this transformation and the challenges of the past 2 years.

But what I'm truly excited about is the launch next week of the most groundbreaking food program innovation in the company's history, an entirely new science-based personalized program for efficacious, livable, sustainable, healthy weight loss and overall wellness. My intention is to lead the company through this launch in the Winter 2022 season, and then provide a seamless transition to new leadership. This has been a profound experience, and I will always be part of the WW family as a member, an advocate and an ambassador for all that we do. And I can assure you that the entire WW team shows a common purpose and will carry on the impactful work that we're doing around the world each and every day.

So turning now to our third quarter results. Revenue was below our expectations and digital growth did not offset the expected year-over-year headwind from the workshop business. Year-over-year, digital recruitment trends softened further from Q2 levels, bringing our total end-of-period subscribers to 4.5 million, down 4% year-over-year, and digital subscribers to 3.7 million, down 3% year-over-year in the third quarter.

Traffic and search continue to be under pressure, and we believe this is an industry-wide trend for digital weight loss programs. We are deliberately adjusting our spend, putting more investment into the fourth quarter where we believe our new marketing assets will have greater impact by amplifying our exciting new food program innovation.

We managed our cost structure effectively to deliver an adjusted gross margin of 62% in the quarter. In addition, we executed on our G&A cost reduction plans, driving savings ahead of our initial expectations for Q3 and focusing our resources behind the initiatives which will drive a successful 2022.

The shift in consumer behavior is around weight loss prioritization over the last several months has resulted in 2021 being a more challenging year than we anticipated. However, it in no way diminishes our enthusiasm and confidence in our 2022 food program innovation and the potential it has to drive significant sign-up momentum in January, the time of year when many people focus on their goals for the year ahead and reprioritize their health and wellness.

On Monday, November 8, we will be launching our new food program globally. Because we believe this innovation is so important and powerful, today, we will be providing you with a preview of the key program elements ahead of Monday's official launch. In addition, to give you a behind-the-scenes perspective on this breakthrough new program, we will be hosting a virtual innovation event on November 18 for analysts and investors. During the event, we will share more color on the development process, the science and insights behind our new program and discuss how we are bringing it all to life. Details will be announced in the coming days.

As I've mentioned previously, the cross-functional multiyear effort behind this innovation was the most comprehensive and well-executed that I have witnessed since joining WW. On Monday, we will globally launch our new food program with truly individualized plans that are custom-built for each member. Each member will have a unique point budget and their very own ZeroPoint foods list based on the food they say they love and can't live without.

For the first time since 2015, we are updating our proprietary award-winning point system to account for added sugar, unsaturated fat, fiber and additional nutrients. WW's team of registered dieticians and nutrition scientists develop the rigorously tested modernized food algorithm to reflect the latest science and healthy eating recommendations and nutrition.

And for the first time, members will now be able to earn points for practicing healthy behaviors, enabling them to grow their daily budget by eating non-starchy vegetables, reaching a daily water goal and exercising. We have purposely created a scientifically advanced program that puts our members front and center so they can find satisfaction and adopting healthy habits that are livable, realistic and sustainable.

As part of the onboarding assessment, each member takes to customize their ZeroPoint foods list in personalized budget, those members who indicate they have diabetes will receive a food plan specifically tailored to their unique food needs, guiding them towards foods that are less likely to impact blood surer levels and consistent with the American Diabetes Association and the International Diabetes Federation guidelines.

We believe this is a powerful program innovation as research has proven that individualized programs work in how these people achieve their weight loss goals. During the 6 months clinical trial, participants experienced clinically significant results as it pertains to their weight and overall health and wellness. Not only did we see clinically significant weight loss during this time, but we also saw notable improvements and overall quality of life and well being, decreased hunger and food cravings and improvements in both physical activity and adoption of healthy habits.

As always, from the innovation launch through late December, our primary focus will be on inspiring and onboarding our current members to the new program and experience, building a network of millions of WW members who could advocate to the program and create excitement during our winter recruitment season. We are also aiming to start building momentum ahead of our fall winter campaign, with targeted pre-winter digital and social attracts launching prior to December 26. Food program innovations have historically been high member recruitment catalysts for WW with the launches of PointsPlus, SmartPoints, Freestyle and myWW all driving sign-up growth.

I will speak more about our winter season marketing plan shortly, but first, I will turn it over to Nick to discuss our operating performance in more detail.

Thank you, Mindy. I'd like to share some additional color on the performance of our global markets. As Mindy mentioned, we ended Q3 with 4.5 million subscribers, which was below our expectations as member recruitment trends further weakened during the quarter. We ended the quarter with 3.7 million digital subscribers, down 3% year-over-year. Subscribers for our premium interactive coaching and content offering, Digital 360, increased quarter-over-quarter, ending Q3 with 240,000 subscribers. We will continue to optimize and build out this membership vertical to expand and diversify our member base.

End-of-period workshop subscribers were 763,000 in Q3, up sequentially from 748,000 in Q2. Our year-over-year workshop subscriber trends are stabilizing. And note that the majority of our international markets have only very recently begun reopening in personal workshops due to the easing of local COVID restrictions. We are making progress on optimizing this business and increased workshop gross margin to 33% in Q3. We aim to return workshops to a 40% plus gross margin. We now have a highly flexible workshop cost structure through our realigned physical footprint.

We are managing the in-person business with a small fixed footprint augmented by highly sizable studio apps or third-party locations, ensuring the availability of workshops to the majority of the population with about 90% of U.S. households within a 30-minute drive of a workshop location.

We expect to end 2021 with about 430 WW branded studios in the U.S., down from about 800 pre-COVID. These locations will be augmented by approximately 650 studio at locations in the U.S. This footprint will provide us with ample capacity for a step-up in attendances in January. We will continue to evaluate studio profitability on a quarter-by-quarter basis and adjust our workshop footprint to support demand.

While overall recruitment trends have been challenging this year as consumers navigate a slow and uncertain global recovery from COVID, retention continues to be strong, demonstrating how much our members find value in the WW program, coaching and community. Digital retention is holding steady at nearly 11 months and workshop retention continues to improve sequentially each month with overall member retention now approximately 10.5 months.

Turning to our Consumer Products business. Lower digital members sign-ups were expected, and therefore, lower traffic to our online shop resulted in e-commerce sales coming in below plan. We also have some modest continued impact from global supply chain pressures and pricing sales of several best-selling items. We now expect our e-commerce business to be modestly above last year's revenue of about $80 million, and we continue to view this channel as an attractive growth opportunity.

In workshop product sales were up slightly year-over-year in Q3. We are focused on driving our consumer products revenues in 2022 as we believe we have a significant opportunity to capture a greater share of wallet. We are investing into the app experience with integrated technologies to have greater capabilities for product bundling, personalization, check count and post-purchase experience to drive incremental and repeat purchases.

In addition, we are pursuing opportunities to rebuild our licensing business, in particular, on the expanding of our brand into product categories sought after by members. For example, through our new licensing partner Andreessen Horowitz, our recently launched wine and bread is available at nearly 400 Walmarts throughout the United States, and our partnership with Fiber One will kick up in January with WW branding and a sign-up partner appearing on packaging nationwide.

Turning to our Health Care and Diabetes business. The same recruitment pressures based on our B2C business are also impacting member sign-ups on our B2B2C channel. In addition, we sunset our AtWorks studio portion of this business in 2020. We now expect this business to generate slightly under $40 million in revenue in 2021.

We believe we have a solid foundation for growth and that the launch of a dedicated WW offering specifically designed for people with diabetes will help accelerate our efforts to expand this business.

In summary, while our third quarter revenue performance did not meet our expectations, we acted nimbly with cold structured cost actions given the operating environment. We look forward to the launch of our new program next week, which we expect to drive strong interest and sign-ups across both new and matched members this winter.

And now I will turn it over to Amy to discuss some financial performance and outlook.

Thank you, Nick. In Q3, we expected revenues to be down in the low single digits, with known workshop revenue headwinds offset by growth in digital. While digital revenue grew in the quarter compared to 2020, it did not grow with a rate that we expected. Digital recruitment trends versus last year worsened in Q3 compared to Q2, also driving lower revenue in e-commerce. The impact from revenue decline was offset by strong gross margin performance, the execution of our G&A cost savings initiatives and an intentional shift of planned marketing investments into Q4.

In Q3, total revenue of $293 million was down 9% year-over-year. While digital revenue was up 3% year-over-year, it did not offset the 28% decline in workshop revenue. We ended Q3 with 4.5 million subscribers, down 4% year-over-year with digital subscribers down 3% and workshop subscribers down 11% year-over-year in the quarter. Adjusted gross margin was 62%, up approximately 270 basis points from the prior year, mostly as the result of digital revenue mix.

In addition, gross margin in workshops improved year-over-year by over 600 basis points as a result of the cost reduction actions taken. Adjusted operating income of $88 million reflected lower-than-expected G&A in the quarter and the deliberate shift of marketing investments into Q4.

The execution of our G&A cost reduction initiatives as well as continued adjustments in our workshop footprint resulted in $9 million of restructuring costs in the quarter, which was above our estimate of $6 million to $8 million. Incorporating the $0.09 negative impact of restructuring which was offset by $0.02 of benefit from change in tax valuation reserves Q3, GAAP EPS was $0.65.

Turning to our outlook for the full year 2021. While recruitment trends have proven difficult to predict in an uncertain environment, we wanted to provide you with an updated view of our expectations for the year. While we are focused on maximizing performance, the impact of the recruitment shortfall in Q3 will create a headwind in Q4, and we expect to end the year with subscribers down in the mid-single digits compared to 2020.

We expect full year 2021 revenue to be modestly above $1.2 billion, down in the low double digits, with workshop revenue while sequentially improving each quarter expected to be down nearly 40% for the full year. Digital revenue is expected to be up in the mid-single digits. Consumer products and other revenue is expected to decline approximately 20% year-over-year. As a reminder, the revenue from the 2020 Vision tour of approximately $16 million did not recur in 2021. Adjusted gross margin for the full year is expected to be approximately 61%, expanding 270 basis points from the prior year. We expect full year adjusted operating income to be in the range of $210 million to $220 million.

GAAP EPS, which incorporates approximately $0.51 per share negative impact from onetime items, is expected to be in the range of $0.80 to $0.90. Related to capital structure and cash, at the end of Q3, we had approximately $188 million in cash and an undrawn revolver of $175 million. We ended the quarter with a net debt-to-EBITDAS leverage ratio of 4.3x. Our full year interest expense is expected to be $88 million, which is down approximately $35 million from the prior year. Excluding the impact of restructuring charges on our P&L, we expect our full year effective tax rate to be approximately 22%.

Capital expenditures, primarily driven by capitalized software, are anticipated to be in the $40 million range in 2021. Depreciation and amortization is expected to be approximately $48 million, including accelerated depreciation related to studio closures. In addition to continued investments in technology and digital product resources which fuel the growth of the business, we will continue to evaluate the potential to acquire remaining franchise territories.

In summary, while revenues did not meet our expectations, we are pleased that the diligent cost actions we have taken enabled us to deliver operating profit slightly ahead of our plan during the quarter, while still prioritizing critical investments in innovation and marketing to drive profitable growth in 2022.

Looking ahead, we expect to end 2021 with a year-over-year decline in subscribers, which given the nature of our subscription business model, translates into a revenue headwind of approximately $25 million entering 2022. Note that this is only a starting point, before factoring in any benefit from expected member recruitment growth next year.

While we are not providing 2022 revenue guidance today, given our upcoming new food program launch and our marketing plans for winter, our objective for next year is to deliver higher recruitment, end-of-period subscriber growth and increased revenue and profitability.

I will now turn the call back to Mindy.

Thanks, Amy. We believe our new store program innovation is launching at just the right time. This powerful new innovation provides truly individualized plans, demonstrating exactly what WW does best, deliver clinically significant weight loss through a livable, sustainable program where members are inspired and supported by a community of members and coaches. We believe the combination of this new program and the traditional New Year's reset moment will spark increased interest in WW as consumers recommit to their health and wellness during the important winter season and drive significant member recruitment in 2022.

Our winter marketing campaign will highlight how our new program is our most advanced ever and fit easily into your life because it is designed uniquely for you, allowing you to live the life you love and we believe you want. Cindy Gustafson, our Chief Marketing Officer, and I were just in California last week for the filming of our U.S. winter camping assets with Oprah Winfrey and James Corden. Just as the scale and scope of the food program innovation is unprecedented, so is the array of marketing assets we will be deploying this winter.

In TV and Digital, Oprah and James will be now defining this new program, highlighting what makes WW different and motivating others to join WW and commit to their health and wellbeing to weight loss. The advertising campaign will also feature a diverse and inspiring group of member investors, sharing their authentic stories and success with the new program.

And in addition to being featured in select digital marketing assets, our talented and aspirational D360 coaches will be utilizing their social media platforms and following to drive engagement and conversation about the new food program and WW across all membership types. In addition, they will be highlighting our industry-first interactive coaching and content experience in 360, which is delivering WW in a new modern way.

These messages, themes and strong calls to action will be adapted throughout our international markets in multi-platform campaigns across linear TV and streaming, digital, social, PR and search. We will utilize the mix of high-performing offers to appeal to a broad range of new and less members emphasizing longer-term commitments, which maximize subscription lifetime value. In addition, we are further optimizing our website and app store presence to remove friction, highlight value and drive conversion.

In summary, while the pandemic environment make consumer behavior difficult to predict in 2021, we believe we have the right playbook to drive profitable growth in 2022. As we have seen with past food program innovations, we are confident that this revolutionary new program will resonate with new and former members alike, create excitement in the category and demonstrate our competitive advantages as we deliver a proven science-based program to an award winning app with coaching, content and community.

Thank you for joining us today, and we're now happy to take your questions.

(Operator Instructions) The first question is from Alex Fuhrman of Craig Hallum.

I'm curious about the shortfall that is being high and nice to speak to you Mindy, and certainly, I wish you all the best in life after WW. I wanted to ask about the shortfall in digital revenue. I mean it certainly seems relative to 3 months ago when you reported the last quarter, obviously, the reopening of the economy has had perhaps not gone as quickly as we all would have hoped to have seen.

Is that one of the driving factors of why you think digital weight loss programs across the board have not performed well in the third quarter? Just kind of curious if there's more of an overarching explanation for why you think the entire industry had slowed down over the past couple of months.

Yes. Alex, so if you look at the trajectory of what we saw throughout the year in terms of consumer behavior change, which related to performance, so Q1, we came out feeling positive based on both the qualitative and quantitative evidence that we saw as well as the digital sign-ups, which is why we articulated where we thought we were going to go.

When we got into Q2, after the early part, we started to see a fairly dramatic shift in what we were seeing from everything from search trends to what we were hearing from consumer. And it was pretty consistent across markets. And it really was, as you said, people saying, this isn't what I want to do right now. I have been through a lot, and this is not what I'm going to focus on at the moment. And that really started, I think, what we said like after the first few weeks of Q2.

And so what we've been trying to do is navigate as effectively as possible, really look at the pulse points. And yes, it was Q3 softer than we had anticipated, which is why the team was incredibly nimble in managing both our costs and making decisions strategically on where our marketing spend was going to go particularly in Q4 because of how strongly we felt about the upcoming innovation.

And the reason that we've been articulating our perspective on why we have such confidence in that is, yes, the program itself is something we can truly screen from the rooftops is new and never has been done before. But what we've already seen -- what we've always seen, if you look at 2016, 2018 and 2020, 2016, we saw a 28% growth in sign-ups because of the winter innovation; 2018, 42%; and in 2020, before the COVID lockdown, 30%. And I think that combined with what we're seeing as again, early green shoots in terms of what we're hearing from consumer and what we're seeing is that the combination of the program, the timing and going into the winter season is what we have the confidence in for growth in 2022.

The next question is from Spencer Hanus of Wolfe Research.

Last quarter, you talked about some wellness fatigue amongst your consumers. Are you seeing that sentiment start to reverse at all as you look into 4Q and then into 2022? And then are you seeing any impact from competitors who've been doing pretty significant fundraising over the last few months and also doing incremental marketing spend as well?

Could you -- I'm sorry, could you repeat that? It was difficult to hear.

Yes. So could you just talk about what you're seeing among consumers? Last quarter, you talked about wellness fatigue and that being a headwind to subscriber growth. Are you seeing that sentiment start to reverse?

And then as you look at the competitive environment out there, has there been any impact from a lot of your peers who have been raising money in players like new and have done that over the last few months?

Yes. So I'll give you a perspective. I mean, we obviously do a lot of qual and quant and I think I used the expression green shoots. We intentionally took a conservative approach to Q4 because of the level of uncertainty we still feel exists. So we don't want to get ahead of ourselves in any way, and we want to really focus on the launch. So that's how I would describe that.

As it relates to the competition, clearly, there are significant competition, but across more than weight loss competitors, you've had a lot of sickness demand and competition, et cetera. And so from our perspective, what we're doing is looking to -- from a performance marketing perspective, maximizing every dollar of our spend going into winter. And I think you heard me before saying we reallocated spend.

So we could be as strong as possible, particularly leading up to and then on our big campaign launches, December 26 and really leveraging our ambassadors, our influencers and really creating as much conversation. The other thing that we look forward to is when we do have a launch of something like this to such a degree, the initial focus is on our existing members because we effectively really utilize them for significant word of mouth to start building momentum going into the winter season.

And this is a very kind of breakthrough and engaging where we do see where we're going to have conversation. So what we're actually going to do is allocate some resources even before the big launch on December 26 to start building momentum.

Got it. That's helpful. And then, Mindy, could you just comment on how you're preparing the business for the eventual change in leadership? And has that had any impact on how you guys are planning for the 2022 diet season in our marketing or just getting the organization ready?

Yes. We have an incredible talent in this organization, and I think I've said this before, the purpose-driven factor of what we are doing to impact people's lives every day is a very galvanizing mission as is growing the business and performing. It's very important to the team.

I'm not leaving immediately. It's important to me as well as the team that we make sure the transition is as effective as possible. And I can absolutely say that the organization, and what they've accomplished for this launch is beyond anything I've seen. And I don't expect that to change.

The next question is from Ed Yruma of KeyBanc.

This is Samantha on for Ed. So my first question is, what were the incremental headwinds in Q3 that caused digital revenue growth to fall short of expectations and decline versus Q2? And will any of these headwinds prolong into Q4?

So as I mentioned before, just what we were seeing in cadence, which is why we were conservative going into Q4 because we did see the headwinds that we did in Q3, particularly on the digital side and flowing, it's different on the workshop side, because although we saw improvement, it's still significantly down year-on-year just because we have markets where we don't even have our workshops up yet.

So obviously, that's a different factor. And we've intentionally planned -- we haven't planned a huge lift in the fourth quarter from the innovation launch, because we wanted to have a modicum of conservatism, even though we're excited about what the opportunity is.

Yes. I would just add, Samantha, as well that the subscriber trends and the recruitment trends in Q3 really drove the revenue shortfall. Remember, in a subscription-based business model, those revenue impacts carry into Q4. For Q4, we further reduced our forecast. And in this point, we took an approach to just reset our expectations to Q3 trends, which performed a bit worse than in Q2. And so that's what you're seeing carry into Q4.

Yes, looking particularly in September, which as far as good to see how quickly the team nimbly reacted to shift marketing resources into Q4.

The next question is from Lauren Schenk of Morgan Stanley.

This is Nathan Feather on for Lauren. Can you just talk through in a little bit more detail what you're seeing in the marketing environment? Was there any impact from IDFA within the quarter? And then given the kind of headwinds you've seen there, how is it impacting how you're thinking about the '22 food plan innovation and marketing plans?

Nathan, we couldn't hear. Was there any impact from -- we missed that part. Could you repeat the first part of the question?

Yes. Any impact from IDFA, the Apple privacy changes?

Okay. No. That really didn't play into a factor in what we're doing. I would say that our winter plans are incredibly comprehensive both from a channel point of view of assets and strategy, et cetera. I think I mentioned in my comments that I was out in California for the style shoot last week, and I can say that I think it's beyond what we've done and very comprehensive.

And obviously, we did have some challenges over the past kind of 18 months because the COVID was really being able to bring a lot of our assets creatively to life because we use real people. We use real members. We use them in an environment. We use the power of Oprah, the power of James. And so this really enabled us to bring everyone together and create a different dynamic across what will ultimately be able to use across all our channels.

The next question is from Michael Lasser of UBS.

This is Mike Schwartz on for Michael Lasser. We've heard a lot about industry-wide pressures. Are there any company-specific challenges that you think that can be faced in the last quarter with impacted results? And has the rebranding from Weight Watchers to WW has any impact?

Actually, what's interesting about that because it's been very important to us as we've not just rebranded kind of "Weight Watchers" to WW, but as we've really articulated who we are as a brand, not just around the leader in science-based weight loss, but also around this holistic wellness offering around long-term sustainable behavior change and wellness.

And actually, not just in terms of recognition, but in terms of perception, in terms of who we are to a broader audience. That's actually been very positive. So I wouldn't say that our challenges are because of where our brand is. That's actually more of an opportunity for us going forward because of the environment that we're in that we're not just 1 linear thing that we have an offering that's much more fulsome.

And then as it relates to the competitive environment, it's what I said before. We have to look at every area of competition, which we do, and we're aware of every area of business where things are trending. But what we do know is there certainly was a hanger, let's call it on the category as a whole. But we do believe that, that is a shorter-term pressure as we go into winter.

The next question is from Stephanie Wissink of Jefferies.

It's Chris on for Steph. And I apologize if you had talked about this as I dropped off the call for a second. But I think I heard you mention the fall off in subs over the last couple of quarters being due to maybe more not wanting to focus on wellness at the moment. And I think that's a potentially important aspect of flag here.

So the question is really, do you feel more strongly positioned to recapture or reactivate these subscribers especially with the innovation launch kind of as they reactivate their appetite to focus on wellness? That's kind of you sort of implied. So maybe if you could bifurcate out how you're thinking about growth coming from prior versus new subscribers relative to prior?

Yes. That's a great question. So just to give you a perspective, in a significant innovation year, and what you saw actually in 2020, obviously, until kind of go to change the perspective at the end of the first quarter, what we tend to see is a significant influx of lapsed members as well as new members, which is why we normally see a spike in our workshop sign-ups.

But we think there's an opportunity this year for us all to have -- also to get labs digital members and have them upgrade to D360 to a more premium coach-led experience. So we're very much focused on strategy for lapse, how to -- when they come back, how do we match them with the right membership vertical for them, and then certainly attract new and also match them with the right membership vertical for them.

And all of the pre-assessment work that we now do to match the member with the actual food program that's going to be exclusive to them, we also match them with the membership vertical that's going to be right for them. So more comprehensive than we've ever done in the past.

This concludes our question-and-answer session. I would like to turn the conference back over to Mindy Grossman for closing remarks.

Thank you, and thanks, everyone, for being here today. Great to talk to you. We're clearly looking forward to the announcement of the food program innovation on Monday and can't wait to share all the details. But I want to thank our global teams for all their incredible work in this development from science to untruths from operations to technology, digital product to marketing, content coaching.

The cross-functional effort that has to go into the creation of a food program like this and bringing it to life is unparalleled. And it truly showcases the competitive advantage of WW with our proven program based on nutrition and behavior chain science. So we're confident that this program will resonate with consumers, create excitement, expand our global impact and most important, provide a trajectory for profitable growth in 2022 and beyond.

I'm very much looking forward to sharing more with you at our virtual event on November 18, and I hope you'll all join us. So thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.