In This Article:
Medifast, Inc. MED delivered fourth-quarter 2024 results, with the bottom and top lines declining year over year. However, both earnings and net revenues beat the Zacks Consensus Estimate.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
This year was a transformative period for Medifast as the company adapted to the evolving health and wellness market, driven by the growing acceptance of GLP-1 medications. Throughout the year, the team demonstrated resilience and adaptability, ensuring Medifast remains well-positioned as a leader in health and wellness within a GLP-1-driven landscape.
Looking ahead, key priorities include reestablishing growth across essential metrics, enhancing coach productivity through accelerated customer acquisition and increasing the number of active earning coaches. These initiatives are expected to expand reach, restore revenue and profitability growth, and create long-term value for all stakeholders.
MEDIFAST INC Price, Consensus and EPS Surprise
MEDIFAST INC price-consensus-eps-surprise-chart | MEDIFAST INC Quote
Medifast’s Quarterly Performance: Key Insights
MED’s adjusted earnings were 10 cents per share in the fourth quarter, down from $1.09 in the year-ago quarter. The metric beat the Zacks Consensus Estimate of an adjusted loss of 27 cents.
Net revenues of $119 million declined 37.7% year over year due to lesser active earning OPTAVIA Coaches and reduced productivity per Coach. The average revenue per active earning OPTAVIA Coach was $4,391, down 5.5% year over year from $4,648 million due to lower customer acquisition. The total number of active earning OPTAVIA Coaches fell 34.1% to 27,100 from 41,000 in the year-ago quarter. The top line surpassed the Zacks Consensus estimate of $111 million.
MED Stock Past Three-Month Performance
Image Source: Zacks Investment Research
MED’s Margin & Cost Details
Gross profit was $88.2 million, down 37.6% year over year on reduced revenue volume. The gross margin was 74.1%, up 10 basis points year over year. We expected gross profit to be $75.8 million in the fourth quarter.
Adjusted selling, general and administrative expenses (SG&A) fell 30.1% year over year to $87.5 million. This decrease was primarily driven by reductions in OPTA VIA coach compensation, employee compensation and nonrecurring costs associated with launching the company's medically supported weight loss initiative, including collaboration costs with LifeMD. There was a reduction in expenses for coach-related events. However, these savings were partially offset by increased spending on company-led marketing efforts.
As a percentage of revenues, adjusted SG&A expenses increased 800 basis points (bps) to 73.5%, attributed to higher company-led marketing expenditure and reduced leverage on fixed expenses. These factors were partially offset by the absence of nonrecurring costs from the previous year’s weight loss initiative and lower expenses for coach-related events.
The adjusted income from operations declined 95.6% to $0.7 million. We note that the adjusted operating margin decreased 790 bps year over year to 0.6%.