Dj Us Foods Holding Corp, Inst Holders, 4Q 2024 (Usfd)

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 Quote

Medifast’s Quarterly Performance: Key Insights

MED’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

MED’s Margin & Cost Details

Gross 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 Snapshot

MED 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 Outlook

The 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 Bets

Here, 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.

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