Medifast Inc (MED) Reports Q3 2023 Earnings: Revenue Down 39.6%, Net Income at $23.1 Million
Medifast Inc (NYSE:MED) reports Q3 2023 revenue of $235.9 million, a decrease of 39.6% from Q3 2022.
Net income for the quarter stands at $23.1 million, with earnings per diluted share of $2.12.
Gross profit decreases by 37.3% to $177.4 million, primarily due to lower revenue.
Selling, general, and administrative expenses decrease by 35.3% to $151.9 million.
On November 6, 2023, Medifast Inc (NYSE:MED), a leading health and wellness company, announced its financial results for the third quarter ended September 30, 2023. The company reported a significant decrease in revenue and gross profit compared to the same period last year, while also managing to reduce its selling, general, and administrative expenses.
Financial Performance Overview
Medifast's Q3 2023 revenue decreased by 39.6% to $235.9 million, down from $390.4 million in Q3 2022. This decrease was primarily driven by a decline in the number of active earning OPTAVIA Coaches and their productivity. The company's net income for the quarter was $23.1 million, with earnings per diluted share of $2.12.
Gross Profit and Expenses
The company's gross profit for the quarter decreased by 37.3% to $177.4 million, mainly due to lower revenue. However, gross profit as a percentage of revenue increased to 75.2% from 72.5% in Q3 2022, positively impacted by efficiencies in inventory management and lower supply chain costs. Selling, general, and administrative expenses decreased by 35.3% to $151.9 million, primarily due to decreased Coach compensation on lower volumes and fewer active earning Coaches.
Balance Sheet and Dividend Announcement
Medifast's balance sheet remains strong with cash, cash equivalents, and investment securities of $157.8 million and no interest-bearing debt as of September 30, 2023. The company also announced a quarterly cash dividend of $1.65 per share, payable on November 7, 2023, to stockholders of record as of the close of business on September 19, 2023.
Outlook for Full-Year 2023
For the full year 2023, Medifast expects revenue to be in the range of $1,050 million to $1,070 million and diluted EPS to be in the range of $8.65 to $9.55. The full-year 2023 earnings guidance assumes a 20.5% to 21.5% effective tax rate.
CEO's Commentary
We are adapting our business model to adjust to the rapidly evolving health and wellness market, leveraging the power of our balance sheet and our clinically proven Coach-led model, said Dan Chard, Chairman & CEO of Medifast. While the actions we are now undertaking are not expected to have a meaningful impact this year, we would expect to start to see the impact of these initiatives as we move into 2024 and beyond.
Explore the complete 8-K earnings release (here) from Medifast Inc for further details.
This article first appeared on GuruFocus.
