Medifast, the parent company of direct selling organization OPTAVIA, announced its financial results for the second quarter of 2023, including revenue of $296.2 million, a 34.7% decrease from the second quarter of 2022. The company attributes this decline primarily to a decrease in the number of active earning OPTAVIA Coaches, as well as the decline in the productivity per active earning OPTAVIA Coach.
Average revenue per active earning OPTAVIA Coach was $5,578, down from $6,667 in the same period last year, representing a 16.3% decline. Total number of active earning OPTAVIA Coaches decreased 21.9% to 53,100, down from 68,000 in the second quarter of 2022.
Gross profit was down 34.5% to $210.7 million due to lower revenue, but gross profit as a percentage of revenue was 71.1%, compared to 71% in the same period last year. Net income during the quarter was $30.3 million, or $2.77 per diluted share, down from $39.1 million, or $3.42 per diluted share, in the same quarter of 2022.
“Industry dynamics have changed numerous times over the years and Medifast has proven adept at making the necessary adjustments in its business model to thrive in new environments,” said Dan Chard, Medifast Chairman & Chief Executive Officer. “Even though the operating environment remains challenging, and we continue to expect that programming adjustments, compensation dynamics, and future growth initiatives will take time to deliver meaningful results, we are confident that the changes we are making to diversify our business into new areas will have similar success.”
The company ended the quarter with $147.4 million in cash and cash equivalents and announced third quarter 2023 revenue guidance in the range of $220-$240 million. Third quarter diluted EPS is expected to be in the range of $0.71-$1.32.
