August 5, 2024
Wellness company Medifast (NYSE:MED) fell short of analysts’ expectations. Management said that:
“We are acting decisively to transform our business to position us for long-term growth, with a strong balance sheet free of debt, a clear focus on new customer acquisition, and a broader health and wellness offer to a significantly expanded target market,” said Dan Chard, Chairman & CEO.
“Our holistic approach, encompassing nutrition, personalized coaching, a supportive community, and access to a clinician through our collaboration with telehealth provider, LifeMD, positions us uniquely to support those who are interested in weight loss medications as well as those who are transitioning off a medical regimen, or those who choose to pursue more traditional weight loss methods.”
Second quarter 2024 revenue decreased 43.1% to $168.6 million from $296.2 million for the second quarter of 2023 primarily driven by a decrease in the number of active earning OPTAVIA Coaches and lower Coach productivity. The total number of active earning OPTAVIA Coaches decreased 36.2% to 33,900 compared to 53,100 for the second quarter of 2023. The average revenue per active earning OPTAVIA Coach decreased 10.9% to $4,972 compared to $5,578 for the second quarter last year, primarily driven by continued pressure on customer acquisition.
The company expects third quarter 2024 revenue to be in the range of $125 million to $145 million and third quarter 2024.
Revenues for the first half of 2024 so far amounted to $343 million.
Second Quarter 2024
Revenue of $168.6 million, with revenue per active earning Coach of $4,972
Independent active earning OPTAVIA Coaches of 33,900
Net loss of $8.2 million (non-GAAP adjusted net income of $10.1 million
Conference Call Information:
The company has revised its marketing spend for this year, from $30 million to $25 million. The company is still at the beginning of its transformation to providing GLP-1 weight loss drugs. 33% of its coaches have at least one GLP-1 client. Many people are going to their primary care MD instead of to LifeMD to obtain the GLP-1 drugs, but Medifast is hoping that with time more of them will contact LifeMD. The firm needs to get up to speed regarding weight loss advertising and key issues such as ROI, the most efficient placement of ads, etc., being new to this space. In addition, there is currently lots of competition for ads from the Olympics and political campaigns. Medifast does see more people expressing interest in special foods designed to help GLP-1 users as they enter the maintenance phase of their weight loss journey.
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