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Medifast Implements New, More Aggressive Revenue Recognition Policy
New treatment adds millions to top line as annual sales decline.
May 3, 2023
With year-over-year (YoY) sales declining Medifast Inc. (MED), a weight loss products maker, is now recognizing revenue more aggressively than prior periods. Previously, Medifast recognized revenue only after a customer was in receipt of the product ordered. Beginning in the first quarter of 2023, Medifast has begun recognizing sales sooner:

“...revenue is now recognized upon delivery to the shipping carrier…”

In the quarter ended March 31, 2023, the more aggressive treatment increased revenue $9.1 million, or 2.6%.

The change also lifted operating income $2.8 million, or 5.2%.

The company attributed the more aggressive treatment to a change in customer terms and conditions.
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