July 27, 2016 - Dawn Zier, President and CEO, stated, “We are pleased with the double-digit revenue growth, improved profitability, and gross margin expansion that we delivered in the second quarter. Demand for our products and revenue per customer continue to grow, demonstrating positive consumer reception to our premium products, flexible options, and shakes.”
Ms. Zier added, “We are on track to officially launch the South Beach Diet program for Diet Season 2017 and will continue to bring innovative new products to market in the coming year. These initiatives, coupled with the proven strength of the Nutrisystem brand and our award-winning customer experience, have us well-positioned to capture a larger share of the broader weight loss space and enhance long-term shareholder value.”
- In Q2, revenue increased 15% to $149.8 million, compared to $130.3 million.
- Gross margin increased 190 basis points to 53.9%, compared to 52.0%.
- Net income increased 33% to $16.1 million, compared to $12.1 million
- 6 months 2016 sales increased to $311.9 million (+16%)
Third quarter revenue is expected to be in the range of $113 to $118 million, net income between $7.0 and $8.3 million. Full year 2016 revenue is expected to be in the range of $520 to $532 million compared to previous range of $517 to $532 million, and net income between $31.1 and $33.6 million.
Conference Call Info.
Management reported that it introduced frozen food items in 400 Walmart stores in the Northeast in May. Also, that it has a new Success maintenance program aimed at extending customer tenure. The firm also reported increased reactivation revenues ($36 million, up 17%), and a gross profit margin of 53.9%. NutriSystem had increased revenues per customer, a result of upsells and flexible offers. Sales were divided as follows: direct: $136 mill., retail - $9 mill., and QVC channel - $4 mill. The firm spent $35.6 mill. on marketing in Q2 (23.8% of revenues). Retail sales for the year are expected to reach $36 million. As for the line of Shake 360 products, NTRI reports that customers for this product line are younger, and to reach them the firm is adjusting its marketing to digital and social media. The company has $38 mill. in cash and short term investments on hand.
The complete Press Release and financial tables can be found here: