Medifast, the parent company of direct selling organization OPTAVIA, announced a return to historic norms for customer retention rates, resulting in third quarter revenue of $390.4 million, with revenue per active earning coach averaging $5,897, down from $6,773 during the same quarter last year. OPTAVIA Coaches now number more than 66,000, an 8.5% increase from the third quarter of 2021.
Net income for the company was $36.2 million with gross profit decreasing 7.9% to $282.8 million, down from $307.1 million during the third quarter of 2021. The company pointed to a reduction in the number of customers supported by each OPTAVIA Coach, plus inflationary pressures. As a percentage of revenue, gross profit was 72.5%, compared to 74.3% in the same quarter of 2021.
“We’ve seen faster than anticipated improvement in customer retention rates back to quarterly historical norms, as we focus on delivering a high-quality experience for all customers,” said Dan Chard, Medifast Chairman and Chief Executive Officer. “At the same time, the world is in a period of economic disruption right now, and that is impacting spending levels and customer acquisition at consumer-facing companies. We’re going to see the residual effect of that on coach productivity and top line revenue as we move through the fourth quarter. However, our highly variable cost structure enables us to maintain solid earnings and cash flow, strengthen our resiliency, and invest in important growth initiatives for the future. We continue to foster a deep connection between customers, OPTAVIA Coaches and the broader OPTAVIA Community, and that’s reflected in Euromonitor naming OPTAVIA as the leading weight loss program by revenue in the U.S. for 2021. We’re excited by the opportunity that lies ahead, and we remain confident in our ability to drive consistent growth for many years to come.”
The company’s cash and cash equivalents totaled $69.7 million with no interest-bearing debt. Full-year 2022 revenue is now expected to be in the range of $1.51 billion-$1.59 billion, a decrease from the originally announced range of $1.58 billion-$1.66 billion. Full-year 2022 diluted EPS is expected in the range of $11.61-$13.05, down from $12.70-$14.10.
