Medifast Q3 revenue falls 19.4% as coach base shrinks to 10,200

Medifast (NYSE: MED) reported third-quarter 2026 revenue of $72.0 million, a 19.4% decrease from $89.4 million in the same period last year, driven primarily by a significant contraction in its independent coach network. The company posted a net loss of $17.5 million, or $1.57 per diluted share, though non-GAAP adjusted net loss was contained to $2.1 million, or $0.19 per share.

The total number of active earning coaches dropped 47.7% to 10,200, down from 19,500 in the third quarter of 2025. Management attributed this decline to continued pressure in client acquisition, reflecting broader operating challenges that include the rapid adoption of GLP-1 medications for weight loss. Despite the shrinking base, average revenue per active earning coach rose 54.1% to $7,064, compared to $4,585 a year earlier, a shift the company linked to its focus on more efficient and productive network structures.

Chief Executive Officer Nick Johnson stated that the quarter was defined by execution, noting that major components of the company's 3.0 strategy, including the Trilivy system, Reset Fuelings, and a new compensation plan, are now live. Johnson indicated that revenue came in line with guidance and that coach productivity improved for the fourth consecutive quarter. He added that with most of the cost-saving "Catalyst" program executed, the company's focus has shifted to delivering returns on foundational work, expressing confidence in achieving profitability in the fourth quarter.

Financial performance was heavily influenced by the Catalyst Restructuring initiative, which began in the second quarter of 2026 with major execution occurring in the third quarter. This restructuring aimed to simplify the business by reducing the size of the distribution network and aligning resources with current revenue levels. Gross profit decreased 19.5% to $50.0 million from $62.2 million in the prior year period. While the gross profit margin held steady at 69.5%, this figure included 230 basis points of charges from the Catalyst Restructuring.

Selling, general, and administrative expenses increased 4.8% to $69.4 million, primarily due to a $13.8 million rise in Catalyst Restructuring charges. This was partially offset by a $6.6 million decrease in coach compensation and a $1.4 million reduction in IT consulting spend. As a percentage of revenue, SG&A rose to 96.3% from 74.1% a year earlier.

Excluding restructuring expenses, non-GAAP adjusted gross profit decreased 16.9% to $51.7 million, while non-GAAP adjusted SG&A decreased 16.0% to $55.6 million. The company's loss from operations widened to $19.4 million from $4.1 million in the prior-year period. On an adjusted basis, however, the loss from operations improved by 3.2% to $4.0 million.

Medifast ended the quarter with cash, cash equivalents, and investment securities totaling $172.5 million and no debt.