Medifast, the parent company for direct selling organization OPTAVIA, released its financial results for the third quarter of 2023, reporting revenue of $235.9 million, a 39.6% decrease from the third quarter of 2022. Since the third quarter of 2022, the total number of active earning OPTAVIA coaches declined by 28.9% to 47,100, which the company views as the primary catalyst for recent revenue reduction.
Net income during the quarter was $23.1 million with a gross profit of $177.4 million, down from a gross profit of $282.8 million in Q3 2022. Gross profit as a percentage of revenue, however, increased to 75.2% from 72.5% in the same period last year. Efficiencies in inventory management, lower supply chain costs and distribution center optimization helped contribute to this positive impact.
“We are adapting our business model to adjust to the rapidly evolving health and wellness market, leveraging the power of our balance sheet and our clinically proven Coach-led model,” said Dan Chard, Medifast Chairman & CEO. “Medically-supported weight loss solutions have brought a fresh focus to the landscape, and it’s important that we continue to develop an approach that recognizes the needs of the customers who choose to utilize medication as part of their health and wellness journey as we broaden our offerings, expand our addressable market, and extend our demographic reach. We remain steadfast in our mission to help our customers create lifelong transformation and make a healthy lifestyle second nature, while maximizing stockholder value. While the actions we are now undertaking are not expected to have a meaningful impact this year, we would expect to start to see the impact of these initiatives as we move into 2024 and beyond.”
The company ended the quarter with cash, cash equivalents and investment securities of $157.8 million with no interest-bearing debt. Revenue outlook for the full-year 2023 is now expected within the range of $1,050 million-$1,070 million, with diluted EPS in the range of $8.65-$9.55.