Medifast Q4 Loss Wider Than Expected, Revenues Decline 37% Y/Y

Medifast, Inc. MED delivered fourth-quarter 2025 results, with the top line surpassing the Zacks Consensus Estimate while the bottom line missing the same. Both metrics showed a year-over-year decline.

Medifast’s Quarterly Performance: Key Insights

MED reported a quarterly loss of $1.65 per share, wider than the Zacks Consensus Estimate of a loss of 76 cents per share. The results include a tax provision charge to establish a non-cash valuation allowance on the deferred tax balance totaling $12.1 million, equivalent to a loss of $1.10 per share. Medifast’s earnings per share (EPS) came in at 7 cents in the year-ago period, while the adjusted EPS was 10 cents.

MEDIFAST INC Price, Consensus and EPS Surprise

MEDIFAST INC price-consensus-eps-surprise-chart | MEDIFAST INC Quote

Net revenues of $75.1 million declined 36.9% year over year due to a dip in the number of active earning OPTAVIA coaches. However, net revenues of this Zacks Rank #2 (Buy) company exceeded the Zacks Consensus Estimate of $70.8 million. The average revenue per active earning OPTAVIA Coach increased 6.2% year over year to $4,664 from $4,391, reflecting changes in the composition and productivity of the coach network.

The total number of active earning OPTAVIA coaches declined 40.6% year over year to 16,100 from 27,100 seen in the prior-year period. The decline was attributed to client acquisition challenges, with the company also noting broader pressures in the weight-loss market, including the growing use of GLP-1 medications.

MED’s Margin & Cost Details

Gross profit was $52.1 million, down 40.9% year over year on lower revenues. The gross margin was 69.4% compared with 74.1% in the prior-year period. The decline in gross profit margin was mainly due to a 420-basis-point loss of fixed cost leverage, along with a one-time restructuring charge that reduced margins by an additional 40 basis points.
Selling, general, and administrative expenses declined in the fourth quarter, decreasing 31.5% year over year to $59.9 million from $87.5 million in the prior-year period. The reduction was primarily driven by an $18.6 million fall in coach compensation, reflecting lower sales volumes and fewer active earning coaches. Additional savings came from a $5.8 million reduction in company-led marketing expenses and a $4.2 million decrease following the realignment of the employee base to match lower revenue levels. These benefits were partially offset by a $1.9 million one-time restructuring charge and a $1.6 million increase in coach event costs.

Despite the absolute decline, SG&A rose 630 basis points as a percentage of revenue to 79.8%, reflecting reduced fixed-cost leverage and higher event and restructuring costs, partially offset by lower marketing spending. The loss from operations was $7.8 million in contrast to the operating income of $0.7 million in the year-ago quarter. As a percentage of revenues, this represented a loss from operations of 10.4% of revenues versus an operating income of 0.6% in the prior-year period.

Medifast’s Financial Health Snapshot

MED concluded the quarter with cash, cash equivalents and investment securities of $167.3 million, no debt (as of Dec. 31, 2025) and total shareholders’ equity of $198.9 million. 

Sneak Peek Into MED’s 2026 Outlook

The company expects first-quarter 2026 revenues between $65 million and $80 million, with loss per share expected to be between 15 cents and 70 cents. For 2026, revenues are expected to be in the range of $270 million to $300 million, with loss per share expected between $1.55 and $2.75. Medifast Currently holds a Zacks Rank #2 (Buy).

Shares of MED have lost 4% in the past three months against the industry’s 4.1% growth.

Other Stocks to Consider

Some other top-ranked stocks have been discussed below:

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The Zacks Consensus Estimate for Simply Good Foods' current fiscal-year sales implies a decline of 0.6%, while the same for current fiscal-year earnings indicates growth of 1.6% from the year-ago reported figures. SMPL delivered a trailing four-quarter earnings surprise of 5.53%, on average.

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The Zacks Consensus Estimate for Kimberly-Clark's current fiscal-year sales and earnings implies a decline of 2.1% and 6.2%, respectively, from the year-ago actuals. KMB delivered a trailing four-quarter earnings surprise of 18.9%, on average.

Mission Produce, Inc. AVO engages in the sourcing, farming, packaging, marketing, and distribution of avocados, mangoes, and blueberries to food retailers, wholesalers, and foodservice customers in the United States and internationally. AVO currently carries a Zacks Rank #2.

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This article originally published on Zacks Investment Research (zacks.com).

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