MED Q4 Earnings Beat, Revenues Dip Y/Y on Lower Customer Acquisition

Medifast, Inc. MED delivered fourth-quarter 2024 results, with the bottom and top lines declining year over year. However, both earnings and net revenues beat the Zacks Consensus Estimate.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.This year was a transformative period for Medifast as the company adapted to the evolving health and wellness market, driven by the growing acceptance of GLP-1 medications. Throughout the year, the team demonstrated resilience and adaptability, ensuring Medifast remains well-positioned as a leader in health and wellness within a GLP-1-driven landscape.Looking ahead, key priorities include reestablishing growth across essential metrics, enhancing coach productivity through accelerated customer acquisition and increasing the number of active earning coaches. These initiatives are expected to expand reach, restore revenue and profitability growth, and create long-term value for all stakeholders.MEDIFAST INC Price, Consensus and EPS Surprise  MEDIFAST INC price-consensus-eps-surprise-chart | MEDIFAST INC QuoteMedifast’s Quarterly Performance: Key InsightsMED’s adjusted earnings were 10 cents per share in the fourth quarter, down from $1.09 in the year-ago quarter. The metric beat the Zacks Consensus Estimate of an adjusted loss of 27 cents.Net revenues of $119 million declined 37.7% year over year due to lesser active earning OPTAVIA Coaches and reduced productivity per Coach. The average revenue per active earning OPTAVIA Coach was $4,391, down 5.5% year over year from $4,648 million due to lower customer acquisition. The total number of active earning OPTAVIA Coaches fell 34.1% to 27,100 from 41,000 in the year-ago quarter. The top line surpassed the Zacks Consensus estimate of $111 million.MED Stock Past Three-Month Performance Image Source: Zacks Investment Research MED’s Margin & Cost DetailsGross profit was $88.2 million, down 37.6% year over year on reduced revenue volume. The gross margin was 74.1%, up 10 basis points year over year. We expected gross profit to be $75.8 million in the fourth quarter.Adjusted selling, general and administrative expenses (SG&A) fell 30.1% year over year to $87.5 million. This decrease was primarily driven by reductions in OPTA VIA coach compensation, employee compensation and nonrecurring costs associated with launching the company's medically supported weight loss initiative, including collaboration costs with LifeMD. There was a reduction in expenses for coach-related events. However, these savings were partially offset by increased spending on company-led marketing efforts.As a percentage of revenues, adjusted SG&A expenses increased 800 basis points (bps) to 73.5%, attributed to higher company-led marketing expenditure and reduced leverage on fixed expenses. These factors were partially offset by the absence of nonrecurring costs from the previous year’s weight loss initiative and lower expenses for coach-related events. The adjusted income from operations declined 95.6% to $0.7 million. We note that the adjusted operating margin decreased 790 bps year over year to 0.6%.Medifast’s Financial Health SnapshotMED concluded the quarter with cash, cash equivalents and investments of $162.3 million, no interest-bearing debt (as of Dec. 31, 2024), and total shareholders’ equity of $210.1 million.Sneak Peek Into MED’s 2025 OutlookThe company expects first-quarter 2025 revenues between $100 million and $120 million, with earnings per share (EPS) ranging from a loss of 50 cents per share to break-even. This EPS range excludes any gains or losses resulting from changes in the market price of the company's LifeMD common stock investment.The Zacks Rank #3 (Hold) company’s shares have lost 11.2% in the past three months compared with the industry’s 5.9% decline.Some Better-Ranked Staple BetsHere, we have highlighted three better-ranked stocks, namely United Natural Foods, Inc. UNFI, Freshpet Inc. FRPT and US Foods Holding Corp. USFD.United Natural Foods is the leading distributor of natural, organic and specialty food and non-food products in the United States and Canada. It presently 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 UNFI's current fiscal-year earnings and sales indicates growth of 442.9% and 0.3%, respectively, from the year-ago reported figures. UNFI delivered a trailing four-quarter average earnings surprise of 553.1%.Freshpet is a pet food company. It has a Zacks Rank #2 (Buy) at present.The Zacks Consensus Estimate for Freshpet’s current financial-year earnings and sales indicates declines of 227.1% and 27.2%, respectively, from the year-ago reported figures. FRPT delivered a trailing four-quarter average earnings surprise of 144.5%.US Foods is a food-service distributor. The company currently carries a Zacks Rank of 2. USFD delivered a trailing four-quarter earnings surprise of 2.4%, on average. The Zacks Consensus Estimate for US Foods’ current financial-year earnings and sales indicates growth of 21% and 5.3%, respectively, from the year-ago reported figures.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Freshpet, Inc. (FRPT): Free Stock Analysis Report United Natural Foods, Inc. (UNFI): Free Stock Analysis Report MEDIFAST INC (MED): Free Stock Analysis Report US Foods Holding Corp. (USFD): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks