Medifast Gears Up for Q3 Earnings: Here's What You Should Know

Core Viewpoint - Medifast, Inc. is expected to report a significant decline in both revenue and earnings for the third quarter of 2024, with revenues projected at $135.5 million, reflecting a 42.6% decrease year-over-year [1] Financial Performance - The consensus estimate for the bottom line remains unchanged at a loss of 15 cents per share, a substantial drop from the previous year's earnings of $2.12 per share [2] - Medifast has a trailing four-quarter earnings surprise of 64.5% on average, with a notable 155.6% surprise in the last reported quarter [2] Market Challenges - The company faces macroeconomic challenges, including increased competition in the health and wellness sector, the rise of GLP-1 medications, and a decline in consumer spending, which are expected to persist [3] - Management anticipates revenues between $125 million and $145 million for Q3 2024, indicating a continued decline in the number of active OPTAVIA Coaches due to challenges in customer acquisition linked to the acceptance of GLP-1 medications [4] Cost Management and Investments - Medifast is experiencing rising selling, general, and administrative (SG&A) costs and plans to invest significantly in customer acquisition, including $9 million on marketing initiatives and $4 million for a coach convention [5][6] - The company is implementing measures to enhance growth, including improving product offerings and customer experience, and testing new growth channels through collaboration with LifeMD [7] Strategic Initiatives - The 'Fuel for the Future' program aims to optimize expenditures and improve efficiency, potentially providing some relief in the upcoming quarter [8] Earnings Prediction - The current Zacks model does not predict an earnings beat for Medifast, as it holds a Zacks Rank of 3 and an Earnings ESP of 0.00% [9]