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Medifast Q1 Loss Wider Than Expected, Sales Down 33.8% Y/Y
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Medifast, Inc. (MED - Free Report) delivered first-quarter 2025 results, wherein both top and bottom lines missed the Zacks Consensus Estimate. Both net sales and earnings experienced year-over-year declines.
Amid growing consumer demand for long-term health and wellness solutions, Medifast has been emphasizing the importance of personalized support through its OPTAVIA program, which offers one-on-one coaching and tailored plans.
Looking ahead, Medifast is prioritizing the revitalization of its coach and customer base by introducing enhanced tools, data-driven support and new products, with a strategic focus on restoring long-term growth and profitability.
Medifast’s Quarterly Performance: Key Insights
MED reported a quarterly loss of 7 cents per share, which includes an unrealized gain from its investment in LifeMD. Excluding this gain, the adjusted loss was 11 cents per share, wider than the Zacks Consensus Estimate of an adjusted loss of 7 cents. The company reported an earnings of 66 cents per share in the year-ago quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Net revenues of $115.7 million declined 33.8% year over year due to a drop in the number of active earning OPTAVIA coaches and missed the Zacks Consensus Estimate of $120 million. The average revenue per active earning OPTAVIA Coach was $4,556, down 1.4% year over year from $4,623. The total number of active earning OPTAVIA Coaches fell 32.8% to 25,400 from 37,800 in the year-ago quarter, due to continued challenges in customer acquisition.
MED’s Margin & Cost Details
Gross profit was $84.2 million, down 33.8% year over year on lower revenues. The gross margin was 72.8%, flat year over year. We expected gross profit to be $83.7 million in the first quarter.
Selling, general and administrative expenses (SG&A) fell 28.4% year over year to $85.5 million. This decrease was primarily caused by a $22.4 million reduction in OPTAVIA coach compensation due to lower volume, a $3 million decline in market research and investment costs related to medically supported weight loss that were incurred in the first quarter of 2024 but did not recur this quarter, a $2.5 million decrease in employee compensation and a $1.3 million reduction in credit card fees.
As a percentage of revenues, SG&A expenses increased 560 basis points (bps) to 73.9%, attributed to approximately 440 bps of deleverage on fixed costs due to lower sales volume and 200 bps from company-led marketing efforts, also impacted by lower sales volumes. These factors were partially offset by a 170-bps benefit from the absence of market research and investment costs that were incurred in the prior-year quarter.
The loss from operations declined 115.9% to $1.3 million. The operating margin contracted 340 basis points year over year, reaching 1.1%.
Medifast’s Financial Health Snapshot
MED concluded the quarter with cash, cash equivalents and investments of $164.6 million, no debt (as of March 31, 2025), and total shareholders’ equity of $211 million.
Sneak Peek Into MED’s 2025 Outlook
The company expects second-quarter 2025 revenues between $85 million and $105 million, with the bottom line ranging from a loss of 55 cents to break-even.
This Zacks Rank #3 (Hold) company’s shares have lost 20.2% in the past three months compared with the industry’s 1.7% decline.
The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1.9% and 485.7%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average.
Utz Brands (UTZ - Free Report) engages in the manufacture, marketing and distribution of snack foods in the United States and presently carries a Zacks Rank of 2. UTZ delivered a trailing four-quarter earnings surprise of 8.8%, on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year sales and earnings indicates growth of 1.4% and 10.4%, respectively, from the year-ago numbers.
Post Holdings, Inc. (POST - Free Report) operates as a consumer-packaged goods holding company in the United States and internationally. It presently carries a Zacks Rank of 2. Post Holdings delivered a trailing four-quarter earnings surprise of 22.3%, on average.
The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and earnings indicates growth of 0.3% and 2.2%, respectively, from the year-ago numbers.
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Medifast Q1 Loss Wider Than Expected, Sales Down 33.8% Y/Y
Medifast, Inc. (MED - Free Report) delivered first-quarter 2025 results, wherein both top and bottom lines missed the Zacks Consensus Estimate. Both net sales and earnings experienced year-over-year declines.
Amid growing consumer demand for long-term health and wellness solutions, Medifast has been emphasizing the importance of personalized support through its OPTAVIA program, which offers one-on-one coaching and tailored plans.
Looking ahead, Medifast is prioritizing the revitalization of its coach and customer base by introducing enhanced tools, data-driven support and new products, with a strategic focus on restoring long-term growth and profitability.
Medifast’s Quarterly Performance: Key Insights
MED reported a quarterly loss of 7 cents per share, which includes an unrealized gain from its investment in LifeMD. Excluding this gain, the adjusted loss was 11 cents per share, wider than the Zacks Consensus Estimate of an adjusted loss of 7 cents. The company reported an earnings of 66 cents per share in the year-ago quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
MEDIFAST INC Price, Consensus and EPS Surprise
MEDIFAST INC price-consensus-eps-surprise-chart | MEDIFAST INC Quote
Net revenues of $115.7 million declined 33.8% year over year due to a drop in the number of active earning OPTAVIA coaches and missed the Zacks Consensus Estimate of $120 million. The average revenue per active earning OPTAVIA Coach was $4,556, down 1.4% year over year from $4,623. The total number of active earning OPTAVIA Coaches fell 32.8% to 25,400 from 37,800 in the year-ago quarter, due to continued challenges in customer acquisition.
MED’s Margin & Cost Details
Gross profit was $84.2 million, down 33.8% year over year on lower revenues. The gross margin was 72.8%, flat year over year. We expected gross profit to be $83.7 million in the first quarter.
Selling, general and administrative expenses (SG&A) fell 28.4% year over year to $85.5 million. This decrease was primarily caused by a $22.4 million reduction in OPTAVIA coach compensation due to lower volume, a $3 million decline in market research and investment costs related to medically supported weight loss that were incurred in the first quarter of 2024 but did not recur this quarter, a $2.5 million decrease in employee compensation and a $1.3 million reduction in credit card fees.
As a percentage of revenues, SG&A expenses increased 560 basis points (bps) to 73.9%, attributed to approximately 440 bps of deleverage on fixed costs due to lower sales volume and 200 bps from company-led marketing efforts, also impacted by lower sales volumes. These factors were partially offset by a 170-bps benefit from the absence of market research and investment costs that were incurred in the prior-year quarter.
The loss from operations declined 115.9% to $1.3 million. The operating margin contracted 340 basis points year over year, reaching 1.1%.
Medifast’s Financial Health Snapshot
MED concluded the quarter with cash, cash equivalents and investments of $164.6 million, no debt (as of March 31, 2025), and total shareholders’ equity of $211 million.
Sneak Peek Into MED’s 2025 Outlook
The company expects second-quarter 2025 revenues between $85 million and $105 million, with the bottom line ranging from a loss of 55 cents to break-even.
This Zacks Rank #3 (Hold) company’s shares have lost 20.2% in the past three months compared with the industry’s 1.7% decline.
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Key Picks
United Natural Foods, Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1.9% and 485.7%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average.
Utz Brands (UTZ - Free Report) engages in the manufacture, marketing and distribution of snack foods in the United States and presently carries a Zacks Rank of 2. UTZ delivered a trailing four-quarter earnings surprise of 8.8%, on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year sales and earnings indicates growth of 1.4% and 10.4%, respectively, from the year-ago numbers.
Post Holdings, Inc. (POST - Free Report) operates as a consumer-packaged goods holding company in the United States and internationally. It presently carries a Zacks Rank of 2. Post Holdings delivered a trailing four-quarter earnings surprise of 22.3%, on average.
The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and earnings indicates growth of 0.3% and 2.2%, respectively, from the year-ago numbers.