WWE shares plummeted for the second time in a week after the company reported earnings that missed Wall Street’s expectations for total revenue. The company also disclosed a decline in live ticket sales to its events and a big drop in subscribers to its WWE Network subscription streaming service.
WWE also said it was considering “strategic alternatives” for WWE Network but did not elaborate other than to say that the service its part of its ongoing financial guidance. Subscribers to the service dropped 10% to 1.42 million, according to WWE’s Q4 2019 earnings release.
WWE shares sank more than 10% in trading Thursday following the company’s fourth-quarter 2019 earnings release. Shares ended the day down 10% at $44.51.
Total revenue for the quarter came in at $322 million, which was up 18% over the year-ago quarter but analysts had been expecting about $333 million. Net income was up 68.2% from year-ago, which the company attributed to “improved operating performance.”
WWE revenue from live events around the world slumped 20% to $27.4 million and the unit delivered an operating loss of $1 million, which WWE attributed to the absence of the “Super Show-Down” event in Australia. WWE credited the $1.9 million drop in North American ticket sales for the quarter to the decision to trim 14 events from its roster in the quarter in order to “optimize” its touring schedule. However, the company said North American attendance overall increased 15% to 5,800 for the quarter.
Consumer products revenue also dropped 6% to $38.2 million.
WWE is in the midst of a seesaw cycle. In 2018 and early 2019, the company was a Wall Street darling. The stock soared as WWE struck lucrative new TV rights deals with Fox Broadcasting and NBCUniversal’s USA Network. But heightened competition from upstart wrestling leagues such as All Elite Wrestling, which has a TV pact with TNT, has put pressure on the company controlled by chairman-CEO Vince McMahon.
Last week, McMahon forced out two longtime executives, WWE co-presidents George Barrios and Michelle Wilson. On Thursday’s conference call, McMahon offered few insights into the reasoning for the shakeup. He said the company would aim to establish a “far more inclusive” management style and that he was confident in the ability to attract “world-class individuals to our company.”
WWE shares plunged more than 20% on Jan. 30, the same day that Barrios and Wilson’s departures were announced.