Medifast Beats on Earnings & Revenues, Q4, full-year report

Feb. 27, 2020

Medifast (MED) posted revenues of $170.63 million for the 4th quarter ended December 2019, surpassing the Consensus Estimate by 5.33%. This compares to year-ago revenues of $145.8 million. The company has topped consensus revenue estimates three times over the last four quarters.

Fourth Quarter 2019 Highlights Compared to Prior-Year Period

  • Revenue up 17.0% to $170.6 million
  • 32.0% growth in active earning OPTAVIA Coaches to 31,800
  • Net income increased 27.0% to $19.9 million

Full Year 2019 Highlights Compared to the Prior-Year Period

  • Revenue of $713.7 million, an increase of 42.4% year-over-year
  • Net income of $77.9 million, an increase of 39.7% year-over-year
  • EPS of $6.43, an increase of 39.2% year-over-year
  • Cash, cash equivalents, and investment securities of $92.7 million

The total number of active earning OPTAVIA Coaches increased to 31,800, compared to 24,100 for the fourth quarter of 2018. The average revenue per active earning OPTAVIA Coach decreased 9.2% to $5,229 compared to $5,756 for the fourth quarter last year.

2020 Outlook

The company expects first quarter 2020 revenue to be in the range of $166.0 million to $171.0 million and EPS to be in the range of $1.35 to $1.42.  For the full year 2020, the company expects revenue of $715.0 million to $745.0 million and EPS of $6.25 to $6.55. 

"We are pleased with our strong growth in revenue and active earning coaches during 2019 and are confident with our ability to drive continued gains in 2020 and beyond. We made excellent progress during the fourth quarter implementing our technology and supply chain upgrades, are seeing strong improvements in client satisfaction and are now better positioned to support our ongoing growth opportunities.  With the recent operational challenges that temporarily muted the growth of active earning Coaches and clients largely behind us, we expect to see our growth rate improve as the year progresses," said Dan Chard, CEO of Medifast. 

The complete Press Release and financial tables can be found here:

https://ir.medifastinc.com/2020-02-26-Medifast-Inc-Announces-Fourth-Quarter-and-Full-Year-2019-Financial-Results

Marketdata Commentary

Medifast, with $713 million in revenues, is now the 2nd largest weight loss company by revenues, beating out NutriSystems's 2019 tally of $697 million. Quite an accomplishment and jump ,in sales over the past three years. Now that they have more financial clout, will they be able to expand overseas and maybe do some large scale advertising/marketing to make the brand a household weight loss name in America? Time will tell.

The company expects 2020 revenues to be in the range of $730 million, which is only a 2.4% increase over 2019 sales. Could this be a slowdown? With the coronavirus outbreak in Southeast Asia, this may put a damper on the firm's expansion plans slated for Singapore and Hing Kong.

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