Medifast(US:MED) ZACKSยท2024-08-06 12:25Core Insights - Medifast, Inc. reported a decline in both earnings and net revenues for Q2 2024, but exceeded Zacks Consensus Estimates for both metrics [1][3][4] - The company is strategically adjusting its operations to adapt to the evolving weight loss industry, including enhanced marketing efforts and a partnership with LifeMD [1][2] Financial Performance - Adjusted earnings per share were 92 cents, down from $2.77 year-over-year, surpassing the Zacks Consensus Estimate of 36 cents [3] - Net revenues totaled $168.9 million, a 43.1% decline year-over-year, primarily due to a decrease in active earning OPTAVIA Coaches and reduced productivity per Coach [3][4] - The average revenue per active earning OPTAVIA Coach decreased by 10.9% to $4,972 from $5,578 [3] - The total number of active earning OPTAVIA Coaches fell by 36.2% to 33,900 from 53,100 year-over-year [4] Profitability Metrics - Adjusted gross profit was $126 million, down 40.2% year-over-year, with a gross profit margin of 74.8%, an increase of 370 basis points year-over-year [4] - Adjusted selling, general and administrative expenses (SG&A) decreased by 33.8% year-over-year to $113.8 million, but as a percentage of revenues, SG&A expenses increased by 940 basis points to 67.5% [5][6] Operational Insights - Adjusted income from operations declined by 68.4% to $12.2 million, with an adjusted operating margin of 7.3%, down 580 basis points year-over-year [7] - The company ended the quarter with cash, cash equivalents, and investments of $165.3 million, with no interest-bearing debt and total shareholders' equity of $205.3 million [8] Future Guidance - Management expects revenues for Q3 to be in the range of $125-$145 million, with projected loss per share between 5-70 cents [9] - The earnings guidance excludes costs related to the partnership with LifeMD and any market price changes of the company's LifeMD investment [9]