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Medifast (NYSE:MED) stock climbed to a near 2-week high on Tuesday after the nutrition and weight loss firm reported strong Q1 results and raised its 2022 guidance.
Q1 GAAP EPS was $3.59 vs. $3.46 in Q1 2021.
Revenue grew 22.6% to $417.6M, helped by an increase in the number of active earning OPTAVIA coaches and productivity per active earning coach.
The number of active earning OPTAVIA coaches grew 21.7% to 63.9K. Revenue per active earning coach rose 1.3% to ~$6.5K.
Q1 gross profit margin was 72.4% vs. 73% in Q1 2021, due to a customer acquisition program as well as inflationary pressures in raw ingredient, freight and labor costs.
MED raised its 2022 EPS guidance to $14.60-16.05, up from its prior outlook of $14.50-16. Consensus estimate is $15.62.
2022 revenue is expected to be $1.78B-1.84B, up from its prior outlook of $1.72B-1.79B. Consensus estimate is $1.77B.
The revised guidance assumes a 24.25-25.25% effective tax rate. The earnings outlook excludes a one-time Q2 donation to Ukrainian refugees.
In a post-earnings call, CEO Dan Chard said MED expects margins to benefit from increasing scale and operational efficiency gains and coach productivity over the long-term.
"Near-term, we will continue to see some margin pressure stemming from inflation and other external factors, as well as from the timing of our investments in technology and supply chain infrastructure," he added.
MED stock declined 13.7% YTD.