WeightWatchers 2011 Annual Report Download - page 54

in early November 2010, and saw attendance growth as a result of the launch. However, because of a decision to
significantly limit marketing in the fall campaign prior to the new program launch and as result of bad weather
during the program launch period, fourth quarter 2010 attendances were down 11.3% versus the fourth quarter of
fiscal 2009.
In fiscal 2011, paid weeks grew 18.3% versus the prior year, benefiting from enrollment growth concurrent
with the launch of ProPoints late in fiscal 2010 and early fiscal 2011 and an increase in Monthly Pass
penetration. As with NACO, this growth in recruitment resulted in a larger customer base and as a result,
attendances also grew, up 13.7% versus the prior year period, as the new program drove members, both new and
returning, into our meeting rooms. For all four quarters of fiscal 2011, paid weeks grew as compared to the
comparable prior year period, up 21.9%, 16.1%, 18.1% and 17.1% and attendances grew 22.2%, 8.5% (impacted
by the Royal Wedding and Easter timing), 10.1% and 13.0%, respectively, as compared to the prior year periods.
Continental Europe Meeting Metrics and Business Trends
In 2007, meeting attendance declined by 8.5% versus the prior year, and we began the process of
strengthening the local management teams in our Continental European markets. We saw some improvement in
the negative attendance trend in 2008, with attendance down 4.1% versus the prior year. Prior to the launch of
Monthly Pass, attendance performance had more closely approximated the declines in meeting paid weeks. With
the introduction of Monthly Pass into Continental Europe, beginning with Germany in the third quarter of fiscal
2007 and then moving into France in April 2008, paid weeks began to outpace attendances. Monthly Pass drove
an overall 16.5% increase in paid weeks for fiscal 2008 in Continental Europe versus the prior year.
In fiscal 2009, most of our Continental European markets were deeply affected by the difficult recessionary
conditions. While Continental Europe experienced paid weeks growth of 1.6% versus the prior year as the market
continued to benefit from increased Monthly Pass penetration, meeting attendance declined 11.8% versus the
prior year. During fiscal 2009, we took the step of re-evaluating the meeting base in a number of countries,
including Germany, closing weaker meetings and building on stronger meetings for a better meeting experience
for our members. This initiative resulted in better compensation for our service providers and higher gross
margins, and created a stronger foundation from which to grow. In addition, during fiscal 2009, the management
teams in Continental Europe prepared for the launch of a major new innovative program, ProPoints, which
launched in the fourth quarter of fiscal 2009.
For fiscal 2010, meeting paid weeks, benefiting from enrollment growth early in the year and an increase in
Monthly Pass penetration, grew 6.9% versus the prior year, while attendance in Continental Europe declined
1.6% versus the prior year. In the first half of fiscal 2010, the Continental European market experienced meeting
attendance growth as a result of the ProPoints program, which drove an influx of returning members to our
meetings who were attracted by the new program. The marketing of this new program, however, was not
successful in capturing the attention of new members and, as a result, meeting attendance began to decline in the
third quarter of fiscal 2010.
Entering fiscal 2011, Continental European performance continued its downward trend, with meeting paid
weeks down 9.8% versus the prior year and attendances down 15.4% versus the prior year. In the first half of
fiscal 2011, meeting paid weeks declined by 13.1% and attendance declined by 18.9% versus the prior year
period, as the business lapped its program launch in the prior year. Promotional strategies in the first quarter of
fiscal 2011 resulted in an increase in Monthly Pass penetration in some Continental European markets, which
accounted for a smaller decline in meeting paid weeks versus attendance. While still negative versus the prior
year period, the trend began to improve in the third quarter of fiscal 2011 with paid weeks down 6.0% and
attendances down 15.1%. In the fourth quarter of fiscal 2011, Continental Europe soft launched its updated
version of ProPoints in December, resulting in a less negative performance with paid weeks down 4.9% and
attendances down 4.3% versus the prior year period.
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