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Dan Chard, Medifast Chairman & CEO joins the Yahoo Finance Live panel to discuss their Q1 earnings results.
ZACK GUZMAN: Welcome back. We haven't seen a lot of action from many stocks beating earnings expectations, but clearly not the case today for health and wellness company Medifast. The stock up, as you can see there on the screen, about 50% after beating on top and bottom lines here by a wide margin. The company, which sells a comprehensive diet program complete with coaching, reported a more than 90% jump in revenue to hit $340.7 million. Earnings per share also jumped 121% to $3.46 a share.
And for more on the quarter, I want to bring in Dan Chart, Medifast chairman and CEO joins us right now. And Dan, appreciate you coming on here to chat, man. I mean, that's a lot of growth. But you guys mainly sell that product I'm talking about there, Optavia, when it comes to focusing in on diet and nutrition. Talk to me about what you've seen in this recovery here as we get back to normal, people have to get out of the house, how important diets become.
DAN CHARD: Yeah, absolutely. Great to be with you, Zack. Yeah, so Optavia is the brand that describes the community that is part of Medifast. So think of Optavia as the health and wellness community that is growing across our three markets, which are the United States, Singapore, and Hong Kong. And so, about four years ago, we reoriented our model to focus on something very different than what we've done in the past, which is to focus-- instead of trying to be focused on diet, we focused on offering what we talk about as lifelong transformation, one healthy habit at a time.
So with the help of the coaches that you described or that you talked about earlier, we now have 50,000 of those across the United States and Asia. They teach clients who typically have failed on diets in the past and who want greater health and wellness, how to eat healthier, how to exercise in the right way, how to sleep, and how to hydrate. So those are what we refer to the habits of health. And so, in the pandemic, we were doing well, but we actually started growing significantly in 2018 when we grew 66%. Last in 2019, we grew 42%. During the pandemic year, we grew about 31%. And now we've kicked off the year with the first quarter growing over 90%.
ZACK GUZMAN: Yeah, how does the coaching process work? Because we were talking with Noom earlier on, who also adds that kind of nutrition accountability there. And some might describe your company multilevel marketing here when you look at that program, which some people might have alarm go-- alarm bells go off a bit when they hear that. But for coaching, how do you weigh just blanket accountability versus qualification of those coaches when it comes to people who sign up to participate in this platform? How important is that when you look at maybe what your users receive from Optavia?
DAN CHARD: Yeah, well, we moved and focused on this coach-centric model about four years ago with a couple of insights in mind. We actually have offered our products in a number of different channels, but we found that when clients, or those who are trying to achieve their health, are able to have support of someone-- in this case, the coach-- can be part of a community and learn habits instead of how to restrict their diet, they're more successful in achieving that.
And so, in 2017, we started focusing on providing that. And I think what characterizes and what is quite unique about our coaches is, first of all, they're all individuals who have gone through this program themselves. So think of each coach having walked in the shoes of the client they're helping already, having been successful, and being able to teach those habits that they learned to these new clients and helping them achieve the same health transformation that they achieved themselves.
AKIKO FUJITA: Dan, where are you seeing the biggest growth outside of the US right now? And what do you think has been the big driver?
DAN CHARD: Well, we're fairly new in Asia. And so the United States is by far and away our largest market. But we're growing at a fast pace in the Asian markets as well. They just don't-- we don't report on those because they don't make up 10% of our revenue. And then if you look across the United States, we literally have presence of coaches and clients in all of the 50 states. And so, we're seeing growth across the board, as people who are looking for a new way to get healthy look at it.
I think we ran a survey recently that talks a little bit about-- it gives context of what happened during the pandemic. It was over 80% of people during the pandemic have started to prioritize health and wellness higher than they did before the pandemic and plan to continue that. But 50% of those say they're more challenged, particularly in this kind of lockdown environment, in controlling their appetite. So this idea of learning the habits of healthy eating and allowing coaches to help you learn a new set of healthy habits to become more healthy is becoming-- has become more relevant during this pandemic time.