The Beachbody Company, known for its fitness and nutrition products, is making a strategic shift in its business model from multi-level marketing (MLM) to a single-level Affiliate Program. This transition, set to launch on November 1, 2024, is part of the company's restructuring plan aimed at reducing costs and improving efficiency.
According to Executive Chairman Mark Goldston, the move to an Affiliate Program is expected to streamline the sales process and make it more rewarding for sellers. This change comes in response to current market dynamics and consumer preferences, signaling a significant improvement in the company's revenue break-even point.
CEO and Co-founder Carl Daikeler expressed confidence in the new Affiliate Model, highlighting its potential to simplify the sales process and energize the company's network. The shift is also expected to benefit partners and customers by providing better health and fitness outcomes without the complexities of a team-based structure.
As part of the restructuring, Beachbody will focus on its BODi.com eCommerce platform, eliminate network marketing support functions, and reduce its workforce by 33 percent. These changes are projected to save $54 million annually and align with the company's new strategic direction.
Beachbody has reaffirmed its financial guidance for the third quarter of 2024, with revenue expectations between $97 million and $107 million, and an anticipated net loss of $9 million to $13 million. The company, originally known for programs like P90X and INSANITY, has served over 30 million customers in its 26-year history.
Recent developments include a strategic partnership with healthcare payment provider Truemed, executive team changes, and the introduction of a new workout regimen. Analysts from Canaccord Genuity initiated coverage on Beachbody with a Buy rating and a price target of $13.00.
InvestingPro Insights
According to InvestingPro data, Beachbody's revenue for the last twelve months as of Q2 2024 was $477.49 million, with a revenue growth decline of -19.61%. The company's decision to reduce the revenue break-even point to less than $225 million seems crucial given these figures.
Despite challenges, Beachbody maintains impressive gross profit margins, with a margin of 64.79% as of Q2 2024. Analysts anticipate a sales decline in the current year, reflecting the company's strategic changes and the stock's performance, with a one-year price total return of -61.02%.
For a comprehensive analysis, InvestingPro offers 15 additional tips for Beachbody, providing insights into the company's financial health and market position during this transition.
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