May 1, 2014 -- The company reported results for the quarter ended March 31, 2014 that exceeded previous guidance.
First Quarter 2014 Highlights
- Revenues of $122.2 million, an increase of 16% from revenues of $105.4 million in the first quarter of 2013, driven by growth in both the Direct and Retail channels;
- Gross Profit increased 13% to $59.8 million
Dawn Zier, President and CEO, said, “We are off to a strong start this year and our performance during this diet season in the direct and retail channels enabled us to exceed our revenue and earnings per share expectations for the first quarter and achieve our third consecutive quarter of year-over-year revenue growth. New product innovation and effective benefit-driven advertising allowed us to achieve customer growth north of 20% and reduce discount messaging. We also implemented a mid-quarter price increase.”
Ms. Zier continued, “We believe that Nutrisystem leads the industry in meaningful product innovation. We are pleased with our launches of Nutrisystem® My Way® and the Fast 5™ kit, our Men’s Protein Powered 5-day kit that just launched in retail, our Kickstart™ 7-day kit introduced yesterday, and our recently announced launch of NuMi, a new multi-platform digital product that addresses the needs of do-it-yourself dieters and also helps people transition from structured programs. Our channel expansion into retail and digital is enabling us to increase brand awareness and capture new customer segments. We expect to achieve full year revenue growth in 2014 for the first time in seven years and are just beginning to realize our brand potential.”
For the second quarter of 2014, the company expects revenues to be in the range of $106 million to $111 million. For the full year of 2014, the company is raising its revenue guidance from a previous range of $385 million to $405 million to now be in the range of $392 million to $407 million. It is also raising its GAAP EPS guidance from a previous range of $0.51 to $0.61 to now be in the range of $0.57 to $0.67 for the full year of 2014.
The company also launched NuMi™ by Nutrisystem, a flexible, new digital weight loss system for the do-it-yourself dieter as well as dieters transitioning from a structured meal plan or looking for a post-diet weight maintenance program. "We developed an interactive system that is far more than a prescribed diet, tracker or calorie counter."
The NuMi™ digital weight loss system is designed to take real life into account on the journey to lose weight. It's not focused on any particular nutrient, ingredient or food group. It's focused on an individual's weight loss goals and changing needs and incorporate behavior modification, one-on-one real time mentoring via on demand live chat with the coaching team 7 days a week, plus solutions for eating in, activity suggestions and integration with a variety of fitness trackers. NuMi can be used on a desktop or smartphone.
The company's turnaround seems to be progressing well, and the company had some positive sales results in Q1 2014, despite lots of bad weather. We're impressed that the company is releasing new food products tailored to specific dieter groups and is also providing things for DIY dieters. However, we're most impressed with the firm's strategy to increase exposure and footprint in the retail space via Walmart and now Target stores. We think it's key to capture female dieters where they shop and spend a lot of their time -- the convenience factor.