Medifast, the parent company of direct seller Take Shape For Life, announced financial results for the first quarter ended March 31, 2017. Overall, revenue decreased 2.4 percent to $70.6 million from revenue of $72.3 million in the first quarter of 2016.
On the direct selling side, revenue in Take Shape For Life was up 2.3 percent to $58.0 million, compared to $56.7 million in the first quarter of the prior year. This was the sixth consecutive quarter of growth. The total number of active earning Health Coaches in the first quarter of 2017 increased to 13,000, compared to 12,600 in the first quarter of 2016. The average revenue per active earning Health Coach for the first quarter of 2017 was $4,463 as compared to $4,490 in the first quarter of 2016.
“We are pleased with our start to 2017,” said Medifast CEO Daniel R. Chard. “Revenue was in line with our expectations, and when combined with our solid gross profit and expense management it fueled profitability above our guidance for the first quarter. Going forward, our focus will continue to be on acceleration of our top-line growth with continued improvement in profitability. We believe we are well positioned with our significant cash generation and the strength of our balance sheet to continue to enhance stockholder value.”
Medifast Direct revenue decreased to $8.9 million in the first quarter of 2017, compared to $10.9 million in the first quarter of 2016. Revenue in the Franchise Medifast Weight Control Centers decreased to $3.5 million from $4.2 million in the first quarter of last year. The decrease in revenue was primarily driven by fewer franchise centers in operation during the period combined with a decline in activity within the centers. The company ended the quarter with 37 franchise centers and 19 reseller locations in operation compared to 58 franchise centers at the end of the same period last year.
To see the full report, DSN Global 100 ranking of the top direct selling companies in the world. The company reported earnings of $222 million for 2016.
Herbalife Results Exceed Expectations
Los-Angeles, Calif.-based Herbalife reported net sales of $1.1 billion for the first quarter of 2017, and volume point growth of 1 percent compared to the prior-year period. Net sales increased in China (5 percent), EMEA (6 percent) and Mexico (8 percent); sales decreased in North America (7 percent), Asia Pacific (2 percent) and South and Central America (8 percent).
China sales and volume significantly exceeded expectations primarily due to the impact on timing of sales and volume, which resulted from a price increase announced in March 2017, effective April 1, 2017. The company believes this shifted member purchases into the first quarter, which would likely have been made in the second quarter of the year.
On a reported basis, first quarter net income was $85.2 million, or 98 cents per diluted share, compared to net income of $95.8 million, or $1.12 per diluted share, for the first quarter of 2016.
“We’ve made a solid start to 2017, exceeding our EPS guidance,” said Michael O. Johnson, Chairman and CEO of Herbalife. “As we transition this June to our new CEO Rich Goudis and my role as Executive Chairman, we are more resolute than ever in making a profound and lasting effect on the nutritional habits of the world, and offering people an opportunity to earn in the process.”
To see the full Herbalife report, click here.
Herbalife was No. 3 on last’s month’s DSN Global 100 ranking of the top direct selling companies in the world. The company reported earnings of $4.5 billion for 2016.
