Hims & Hers Health, Inc. (HIMS) did not report a surge in gross profit in Q4 2024. In fact, the company's gross margin declined by 2 points quarter over quarter to 79%, primarily due to the scaling of the weight loss specialty in Q3 202412. The decline in gross margin can be attributed to several factors:
- Scaling of Weight Loss Specialty: The significant increase in revenue from the weight loss specialty, which saw a 77% year-over-year growth, put pressure on gross margin. This specialty is likely to have lower margins due to the high cost of goods sold, such as the GLP-1 related products45.
- New Product Launchs: The company has been launching new products, including the oral GLP-1 business, which is contributing to the revenue growth but may also be impacting gross margin. The introduction of new products often comes with higher costs, which can affect the overall gross margin13.
- Marketing Expenses: The company has been increasing its marketing expenditures, which accounted for 45% of revenue in Q3 2024. While this is an improvement from previous quarters, it indicates that a significant portion of revenue is being spent on marketing, which can impact gross margin23.
In conclusion, HIMS did not achieve a surge in gross profit in Q4 2024, but rather experienced a decline in gross margin due to the scaling of the weight loss specialty, new product launches, and increased marketing expenses.
3/30/2025 10:10am
