WeightWatchers 2007 Annual Report Download - page 25

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Item 1A. Risk Factors
You should consider carefully, in addition to the other information contained in this Annual Report on
Form 10-K and the exhibits hereto, the following risk factors in evaluating our business. Our business, financial
condition or results of operations could be materially adversely affected by any of these risks.
Competition from a variety of other weight management industry participants or the development of more
effective or more favorably perceived weight management methods could result in decreased demand for
our products and services.
The weight management industry is highly competitive. We compete against a wide range of providers of
weight management products and services. Our competitors include: self-help weight management regimens and
other self-help weight management products and publications such as books, tapes and magazines; commercial
weight management programs; Internet weight management approaches; dietary supplements and meal
replacement products; weight management services administered by doctors, nutritionists and dieticians; surgical
procedures; the pharmaceutical industry; government agencies and non-profit groups that offer weight
management services; and fitness centers. Additional competitors may emerge as new or different products or
methods of weight management are developed and marketed. More effective or more favorably perceived diet
and weight management methods, including pharmaceutical treatments, fat and sugar substitutes or other
technological and scientific advances in weight management, also could be developed. This competition may
reduce demand for our products and services. Any such decrease may adversely affect our business, financial
condition and results of operations.
The purchasing decisions of weight management customers are highly subjective and can be influenced by
many factors, such as brand image, marketing programs, cost and perception of the efficacy of the product and
service offerings. Moreover, customers can, and frequently do, change weight management approaches easily
and at little cost. For example, in fiscal 2003 and fiscal 2004, our revenue growth was adversely affected by
increased popularity and media exposure of low-carbohydrate diets.
Our operating results depend on the effectiveness of our marketing and advertising programs.
Our business success depends on our ability to attract and retain members to our meetings and subscribers to
WeightWatchers.com. The effectiveness of our marketing practices, in particular our advertising campaigns, is
important to our financial performance. If our marketing and advertising campaigns do not generate a sufficient
number of members and subscribers, our results of operations will be adversely affected.
If we do not continue to develop innovative new products and services or if our products and services are
not accepted by the market, our business may suffer.
The weight management industry is subject to changing customer demands based, in large part, on the
efficacy and popular appeal of weight management programs. Our future success depends on our ability to
continue to develop and market new products and services and to enhance our existing products and services on a
timely basis to respond to new and evolving customer demands, achieve market acceptance and keep pace with
new nutritional and weight management developments. We may not be successful in developing, introducing on
a timely basis or marketing any new or enhanced products and services, and we cannot assure you that any new
or enhanced products or services will be accepted by the market. Our failure to develop new and innovative
products and services or the failure of our products and services to be accepted by the market would have an
adverse impact on our business, financial condition and results of operations.
The Weight Watchers brand could be impaired due to actions taken by our franchisees and licensees.
We believe that the Weight Watchers brand is one of our most valuable assets and that our reputation
provides us with a competitive advantage. Our franchisees operate their businesses under our brand. In addition,
we license the Weight Watchers brand to third-party manufacturers of a variety of goods, including food
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