Medifast Q2 Revenue Down 34.7% To $296 Million

Medifast the health and wellness company known for its habit-based and Coach-guided lifestyle solution, OPTAVIA®, today reported results for the second quarter ended June 30, 2023.

Second Quarter 2023

• Revenue of $296.2 million, with revenue per active earning coach of $5,578
• Independent active earning OPTAVIA Coaches of 53,100
• Net income of $30.3 million
• Earnings per diluted share (“EPS) of $2.77
• Cash and Cash Equivalents of $147.4 million and no interest-bearing debt

“We are ahead of our Fuel for the Future plan with key initiatives aimed at driving efficiency and cost reduction, which helped to mitigate the impact of continued economic headwinds on our revenues during the quarter,”

said Dan Chard, Chairman & Chief Executive Officer of Medifast.

“In addition, we have made significant progress advancing our broader health and wellness agenda with the recent launch of our new OPTAVIA ACTIVE^TM line of products, which marks an inflection point for Medifast as we target new areas of growth and more than triple our total addressable market.

We also have pilot programs underway to assess potential growth opportunities related to medically-supported weight loss that leverage the strength of our business model. We believe our scientifically-designed solution, OPTAVIA, is a great complement to those seeking to improve their health and wellness regardless of the method they choose to utilize.”

Chard concluded,

“Industry dynamics have changed numerous times over the years and Medifast has proven adept at making the necessary adjustments in its business model to thrive in new environments.

Even though the operating environment remains challenging, and we continue to expect that programming adjustments, compensation dynamics, and future growth initiatives will take time to deliver meaningful results, we are confident that the changes we are making to diversify our business into new areas will have similar success.”

Second Quarter 2023 Results

Second quarter 2023 revenue decreased 34.7% to $296.2 million from $453.3 million for the second quarter of 2022, primarily driven by a decrease in the number of active earning OPTAVIA Coaches and the decline in the productivity per active earning OPTAVIA Coach.

The average revenue per active earning OPTAVIA Coach was $5,578, compared to $6,667 for the second quarter last year, a decline of 16.3%, driven by continued pressure on customer acquisition, partially offset by the price increase implemented in November 2022. The total number of active earning OPTAVIA Coaches decreased 21.9% to 53,100 compared to 68,000 for the second quarter of 2022.

Gross profit decreased 34.5% to $210.7 million from $321.7 million for the second quarter of 2022. The decrease in gross profit was due to lower revenue. The Company’s gross profit as a percentage of revenue was 71.1% compared to 71.0% in the second quarter of 2022.

The Company’s balance sheet remains strong with $147.4 million in cash and cash equivalents and no interest-bearing debt as of June 30, 2023 compared to $87.7 million in cash and cash equivalents and no debt at December 31, 2022.

 

About Medifast^®:

Medifast is the health and wellness company known for its habit-based and Coach-guided lifestyle solution OPTAVIA®, which provides people with a simple, yet comprehensive approach to help them achieve lasting optimal health and wellbeing.

OPTAVIA offers clinically proven plans, scientifically developed products and a framework for habit creation reinforced by independent Coaches and Community support. As a physician-founded company with a 40+ year history, Medifast is a leader in the U.S. weight management industry.