Medifast Faces Revenue Decline Amid Strategic Adjustments

Medifast ( (MED) ) has released its Q3 earnings. Here is a breakdown of the information Medifast presented to its investors.

Medifast (NYSE: MED) is a health and wellness company known for its OPTAVIA® lifestyle solution, which focuses on habit-based and coach-guided support for weight loss and healthy living, including collaborations with LifeMD for medication-based approaches.

In its third quarter of 2024, Medifast reported significant declines in revenue and profitability, with revenue dropping to $140.2 million, a 40.6% decrease from the prior year, accompanied by a sharp decrease in net income to $1.1 million. The company attributes these declines primarily to a reduction in the number of active earning OPTAVIA coaches and lower coach productivity.

Key financial metrics for this quarter include a gross profit of $105.7 million and a gross profit margin that slightly improved to 75.4%. However, the income from operations saw a substantial drop to $2.1 million, down from $25.5 million in the previous year. Despite these challenges, the company maintains a strong balance sheet with $170 million in cash and no debt, allowing for strategic adjustments such as the cancellation of its credit agreement to save on commitment fees.

Looking forward, Medifast anticipates fourth-quarter revenues to range between $100 million and $120 million, with projected losses per share. The management remains optimistic about its long-term strategy, focusing on tailored health solutions and customer acquisition to drive future growth.