Medifast Earnings Cheat Sheet: Revenue Strengthens Again by Double-Digits

Medifast, Inc. (NYSE:MED) reported its results for the second quarter. Medifast, Inc. is engaged in the production, distribution and sale of weight management and disease management products and other consumable health and diet products.

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Medifast Earnings Cheat Sheet for the Second Quarter

Results: Net income for Medifast, Inc. rose to $5.9 million (41 cents per share) vs. $5.5 million (38 cents per share) in the same quarter a year earlier. This marks a rise of 7.3% from the year earlier quarter.

Revenue: Rose 17.4% to $78.3 million from the year earlier quarter.

Actual vs. Wall St. Expectations: MED fell short of the mean analyst estimate of 48 cents per share. It fell short of the average revenue estimate of $81.8 million.

Quoting Management: “We are pleased with our ability to generate increased sales and earnings growth in the quarter as we continued to make the necessary infrastructure investments to further our scalability across the Medifast Weight Control Centers, in our web platforms for Take Shape for Life and Medifast Direct, as well as adding the necessary resources in both personnel and operations to support Medifast’s future long-term expansion,” stated Michael S. McDevitt, Medifast’s Chief Executive Officer. “Our vertically integrated operations will allow us to continually improve the customer experience across our sales channels and enable us to leverage our operating costs for increased margin expansion and long-term profitable growth.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 37.9%, with the biggest boost coming in the second quarter of the last fiscal year when revenue rose 63.7% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 29.7% and in the fourth quarter of the last fiscal year, the figure rose 12.4%.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 44 cents versus a mean estimate of net income of 41 cents per share.

Gross margins grew 1.2 percentage points to 75.4%. The growth seemed to be driven by increased revenue, as the figure rose 17.4% from the year earlier quarter while costs rose 11.7%.

Competitors to Watch: Inc. (NASDAQ:DIET), Weight Watchers Intl., Inc. (NYSE:WTW), NutriSystem Inc. (NASDAQ:NTRI), Herbalife Ltd. (NYSE:HLF), Schiff Nutrition Intl. Inc. (NYSE:WNI), Reliv International, Inc (NASDAQ:RELV), Hi-Tech Pharmacal Co. (NASDAQ:HITK), Cardium Therapeutics Inc. (AMEX:CXM), Nutraceutical Int’l Corp. (NASDAQ:NUTR), and Hospira, Inc. (NYSE:HSP).

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(Source: Xignite Financials)