(813) 971-8080

7210 Wareham Drive, Tampa, FL 33647

NutriSystem Q4 2018 Results, Projects Flat 2019 2nd Year In A Row

Feb. 20, 2019 – NutiSystem reported its full-year 2018 and 4th Quarter result, along with new partner Tivity health.

CEO Dawn Zier said: ” To provide some color around the start of 2019, our early diet season trends indicate mixed results. On the program and product innovation front, our focus has been on personalized nutrition and enhanced flexibility, which will allow us to have increased engagement with customers, both at the start and throughout their journey to optimal health. “

Ms. Zier added, “We’re pleased with our new programs for 2019 — Nutrisystem FreshStart, which offers the best balance between structure and flexibility, and our new keto-friendly South Beach Diet program, both of which reflect evolving consumer trends. We continue to focus on the near and long-term growth of our brands and are excited about the planned combination of our company with Tivity Health. We strongly believe our companies are highly complementary and that Tivity Health’s expertise in fitness and deep relationships in healthcare, combined with our nutrition and consumer engagement and marketing expertise, can change the paradigm for health and wellness and provide significant growth opportunities in the coming years.”

Full Year 2018 Compared to Full Year 2017

  • Revenue was $691.0 million compared to $697.0 million.
  • Gross margin was 52.9% compared to 53.9%.
  • Net income was $58.6 million

Fourth Quarter 2018 Compared to Fourth Quarter 2017

  • Revenue was $129.5 million compared to $131.2 million.
  • Gross margin was 52.0% compared to 53.1%.
  • Net income was $13.7 million 

Full Year 2019 and First Quarter 2019 Guidance

The company’s first quarter and full year 2019 selective guidance is outlined below.Full year 2019 revenue is expected to be in the range of $682 to $702 million and adjusted EBITDA between $100 and $110 million.

First quarter 2019 revenue is expected to represent approximately 28% of the full year 2019 revenue.

Ms. Zier continues: “Regarding our customer acquisition campaigns, response in January started out softer than anticipated, which led us to proactively pull back media spend versus last January, as we assessed an initial spike in competition which was driving up short-term cost and we reevaluated our initial media plan taking into consideration these new inputs.

The good news is that, toward the end of January and February we’ve seen sequential week-over-week improvements as we refined our marketing strategy, optimized our media mix and layered back in some additional spend.”

“…we deliberately pulled back on television spend. However, January actual results indicate that we cut back too far on TV. Given the competitive environment and the media habits of our core customers the effect of this media mix shift drove a reduction in total response. In late January, we began to layer back in television spend on top of our digital spend.”

“… Approximately 25% of our database is 65-plus. We’ll educate these customers about SilverSneakers and make it easy for them to conduct eligibility checks. Likewise, the remaining 75% are perfect targets for Tivity’s Prime Fitness offering. “

As for the merger of the two companies, Tivity’s CEO
Donato Tramuto  said that:

“In March, we will provide a unique Nutrisystem offering to our Prime Fitness members. Additionally, we will leverage our relationship with Blue Cross and Blue Shield Association to promote Nutrisystem. We will also offer a unique promotional opportunity for the WholeHealth Living members adding Nutrisystem as a benefit. We will also offer a unique nutrition and food delivery opportunity to SilverSneakers members. We will promote Prime Fitness through Nutrisystem and the South Beach Diet.

We will develop a turnkey solution for participating locations to offer weight management solutions to their entire member bases including starter kits and a la carte options. We will leverage Nutrisystem’s digital and direct-to-consumer marketing expertise to better and faster engage our SilverSneakers and Prime Fitness members.”

The complete Press Release can be found here:


Marketdata Commentary

The big news is that NutriSystem is only expecting a $6 million increase in revenues for 2019. That means sales will essentially be flat two years in a row–no growth. What’s wrong? Is heavy discounting taking a toll? Is it the competition from Jenny, Medifast, Weight Watchers and others?

Ms. Zier said in the conference call that, in regard to the beginning of the 2019 diet season: ” …there were a couple of new entrants (competitors, possibly Noom?) that came in spent heavy and then pulled back a little bit and that’s typically what we see. “

Well, if that’s the norm, weren’t they expecting this? Seems to us that we’ve heard about problems with the marketing mix and ad spend, and timing, before–like last year. So why did they get caught by surprise again?

Scroll to Top