Medifast reported another strong quarter this year, throwing more momentum behind the Baltimore-based weight loss and weight management company that has more than quadrupled its share price in the past year from $42 to more than $170.
The company reported revenue of $117.3 million In its second quarter financial statement, a more than $40 million increase compared to the same time last year.
Net income was also up almost $2 million since the first quarter at $14.1 million, an 86.4 percent increase year-over-year.
“We are pleased to report a further acceleration in the business momentum we reported in the first quarter of the year, resulting in record revenues and profitability that exceeded our expectations,” Medifast CEO Dan Chard wrote in a statement.
Chard attributed the company’s success to the scalability and rapid growth behind its integrated coach model which has increased in size by 3,000 coaches in the past quarter to 19,700.
This quarter marks one year after the company launched its OPTAVIA brand, which now represents 64 percent of consumable units sold in the second quarter compared to 30 percent a year ago.
OPTAVIA health coaches are continuing to earn more year-by-year, up 16.1 percent from the same quarter last year at $5,474.
Though gross profit for the quarter increased 54.2 percent to $88.8 million, gross profit as a percentage of revenue decreased by 40 basis points to 75.7 percent from 76.1 percent compared to the same quarter last year.
This decrease is attributed to an increase in the number of new clients the company is taking on, which increased the proportion of clients who are receiving a first-order discount.
“We are confident that we are well positioned for future growth and, based on these strong operational and financial results as well as our positive outlook for the remainder of the year, we are pleased to be able to raise our annual guidance once again this year,” Chard said.
The company continues to benefit from a lower federal tax rate of 19.8 percent, compared to 33.8 percent in 2017.
Earnings per diluted share is also up at $1.16, compared to $1.02 last quarter, an increase of 84.1 percent year-over-year.