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Medifast Q2 Loss Narrower Than Expected, Coach Productivity Improves
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Key Takeaways
MED reported a narrower-than-expected Q2 loss as higher coach productivity supported revenue per coach.
MED's active earning coaches fell 48.7%, while revenue per active coach increased 41%.
MED reaffirmed its 2026 revenue outlook and improved its full-year earnings guidance.
Medifast, Inc. (MED - Free Report) reported second-quarter 2026 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. However, both metrics declined year over year.
Medifast's Quarterly Performance: Key Insights
The company posted a loss per share of 28 cents, narrower than the Zacks Consensus Estimate of a loss of 67 cents per share. The company posted earnings of 22 cents per share in the prior-year period.
Revenues declined 27.6% year over year to $76.4 million from $105.6 million, slightly exceeding the Zacks Consensus Estimate of $76 million. Higher revenues generated by each active earning coach reflected continued improvements in coach productivity despite a smaller coach network.
Medifast ended the quarter with approximately 11,700 active earning coaches, down 48.7% from 22,800 a year earlier. Management said that the decline in coaches remained the primary factor behind the year-over-year revenue decrease. The company noted that slower client acquisition continues to reflect broader industry pressures, including the rapid adoption of GLP-1 weight-loss medications.
Average revenue per active earning coach increased 41% year over year to $6,529 from $4,630, marking the third consecutive quarter of productivity improvement. Management continues to view stronger coach productivity as an early indicator of future business improvement, noting that historically it has been followed by higher client acquisition, coach growth and revenue expansion.
Medifast's Margin & Cost Performance
Gross profit fell 30.3% year over year to $53.4 million from $76.6 million, due to lower sales volumes. Gross margin contracted 270 basis points to 69.9% from 72.6%, primarily due to reduced leverage on fixed costs.
Selling, general and administrative expenses were $57.7 million, declining 25.7% year over year from $77.7 million. The decrease reflected $12.6 million of lower coach compensation, $2.3 million of reduced employee salary and benefit expenses and $2 million of lower company-led marketing costs. SG&A expenses represented 75.6% of revenues, up 200 basis points from 73.6% a year ago. The increase primarily reflected fixed-cost deleverage and expenses associated with the Trilivy Reset product launch, partly offset by lower marketing spending.
The operating loss widened to $4.3 million from $1.1 million in the year-ago quarter.
MED's Other Financial Information
Medifast ended June 2026 with $169.8 million in cash, cash equivalents and investment securities compared with $167.3 million at Dec. 31, 2025. The company remained debt-free.
Sneak Peek Into MED's Future Outlook
For the third quarter of fiscal 2026, Medifast expects revenues of $60-$80 million and a loss of 15-65 cents per share, excluding one-time costs related to the Catalyst cost-savings program.
Management expects the active earning coach count to continue declining in the near term but anticipates further improvement in coach productivity on both a year-over-year and sequential basis during the third quarter.
For fiscal 2026, Medifast reaffirmed its revenue outlook of $270-$300 million and now expects a loss in the range of 25 cents to $1.75 per share compared with the previous guidance of a loss of $1.55-$2.75 per share.
The company continues to expect progress toward returning to profitability beginning in the fourth quarter of 2026 following the launch of its new product line, with further earnings improvement targeted through 2027 and beyond. Management also expects working capital to exceed $145 million by year-end.
The company noted that its Catalyst program is expected to generate savings through facility rationalization, AI-related efficiencies and other operational initiatives.
Shares of this Zacks Rank #3 (Hold) company have risen 1.4% over the past three months compared with the industry’s growth of 6.1%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks have been discussed below:
Darling Ingredients Inc. (DAR - Free Report) develops, produces, and sells sustainable natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America, and internationally. DAR currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DAR’s current fiscal-year sales and earnings implies growth of 13.2% and 685.3%, respectively, from the year-ago actuals. DAR delivered a trailing four-quarter negative earnings surprise of 38.9%, on average.
The Chef’s Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East, and Canada. CHEF currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for CHEF’s current fiscal-year sales and earnings indicates growth of 10.8 and 24.7%, respectively, from the year-ago reported figures. CHEF delivered a trailing four-quarter earnings surprise of 30.4%, on average.
US Foods Holding Corporation (USFD - Free Report) , together with its subsidiaries, markets, sells and distributes fresh, frozen, and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for US Foods’ current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago actuals. USFD delivered a trailing four-quarter earnings surprise of 1.4%, on average.
View the Zacks #1 Rank List
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Medifast Q2 Loss Narrower Than Expected, Coach Productivity Improves
Key Takeaways
Medifast, Inc. (MED - Free Report) reported second-quarter 2026 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. However, both metrics declined year over year.
Medifast's Quarterly Performance: Key Insights
The company posted a loss per share of 28 cents, narrower than the Zacks Consensus Estimate of a loss of 67 cents per share. The company posted earnings of 22 cents per share in the prior-year period.
MEDIFAST INC Price, Consensus and EPS Surprise
MEDIFAST INC price-consensus-eps-surprise-chart | MEDIFAST INC Quote
Revenues declined 27.6% year over year to $76.4 million from $105.6 million, slightly exceeding the Zacks Consensus Estimate of $76 million. Higher revenues generated by each active earning coach reflected continued improvements in coach productivity despite a smaller coach network.
Medifast ended the quarter with approximately 11,700 active earning coaches, down 48.7% from 22,800 a year earlier. Management said that the decline in coaches remained the primary factor behind the year-over-year revenue decrease. The company noted that slower client acquisition continues to reflect broader industry pressures, including the rapid adoption of GLP-1 weight-loss medications.
Average revenue per active earning coach increased 41% year over year to $6,529 from $4,630, marking the third consecutive quarter of productivity improvement. Management continues to view stronger coach productivity as an early indicator of future business improvement, noting that historically it has been followed by higher client acquisition, coach growth and revenue expansion.
Medifast's Margin & Cost Performance
Gross profit fell 30.3% year over year to $53.4 million from $76.6 million, due to lower sales volumes. Gross margin contracted 270 basis points to 69.9% from 72.6%, primarily due to reduced leverage on fixed costs.
Selling, general and administrative expenses were $57.7 million, declining 25.7% year over year from $77.7 million. The decrease reflected $12.6 million of lower coach compensation, $2.3 million of reduced employee salary and benefit expenses and $2 million of lower company-led marketing costs. SG&A expenses represented 75.6% of revenues, up 200 basis points from 73.6% a year ago. The increase primarily reflected fixed-cost deleverage and expenses associated with the Trilivy Reset product launch, partly offset by lower marketing spending.
The operating loss widened to $4.3 million from $1.1 million in the year-ago quarter.
MED's Other Financial Information
Medifast ended June 2026 with $169.8 million in cash, cash equivalents and investment securities compared with $167.3 million at Dec. 31, 2025. The company remained debt-free.
Sneak Peek Into MED's Future Outlook
For the third quarter of fiscal 2026, Medifast expects revenues of $60-$80 million and a loss of 15-65 cents per share, excluding one-time costs related to the Catalyst cost-savings program.
Management expects the active earning coach count to continue declining in the near term but anticipates further improvement in coach productivity on both a year-over-year and sequential basis during the third quarter.
For fiscal 2026, Medifast reaffirmed its revenue outlook of $270-$300 million and now expects a loss in the range of 25 cents to $1.75 per share compared with the previous guidance of a loss of $1.55-$2.75 per share.
The company continues to expect progress toward returning to profitability beginning in the fourth quarter of 2026 following the launch of its new product line, with further earnings improvement targeted through 2027 and beyond. Management also expects working capital to exceed $145 million by year-end.
The company noted that its Catalyst program is expected to generate savings through facility rationalization, AI-related efficiencies and other operational initiatives.
Shares of this Zacks Rank #3 (Hold) company have risen 1.4% over the past three months compared with the industry’s growth of 6.1%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks have been discussed below:
Darling Ingredients Inc. (DAR - Free Report) develops, produces, and sells sustainable natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America, and internationally. DAR currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DAR’s current fiscal-year sales and earnings implies growth of 13.2% and 685.3%, respectively, from the year-ago actuals. DAR delivered a trailing four-quarter negative earnings surprise of 38.9%, on average.
The Chef’s Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East, and Canada. CHEF currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for CHEF’s current fiscal-year sales and earnings indicates growth of 10.8 and 24.7%, respectively, from the year-ago reported figures. CHEF delivered a trailing four-quarter earnings surprise of 30.4%, on average.
US Foods Holding Corporation (USFD - Free Report) , together with its subsidiaries, markets, sells and distributes fresh, frozen, and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for US Foods’ current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago actuals. USFD delivered a trailing four-quarter earnings surprise of 1.4%, on average.