FitLife Brands' Q2 2025: Navigating Contradictions in Revenue Growth, Margins, and Strategic Plans

Organic revenue growth expectations, gross margin expectations, strategic objectives and M&A plans, and tariff impact on ingredients and product costs are the key contradictions discussed in FitLife Brands' latest 2025Q2 earnings call.



Revenue and Earnings Decline:
- FitLife's total revenue for Q2 2025 declined 5% year-over-year to $16.1 million.
- Net income for the quarter was $1.7 million compared to $2.6 million in the previous year.
- The decline was primarily attributed to elevated merger and acquisition-related expenses from the acquisition of Irwin Naturals.

Gross Margin and Operating Performance:
- FitLife's gross margin declined from 44.8% in Q2 2024 to 42.8% in Q2 2025.
- Contribution, defined as gross profit less advertising and marketing expense, also declined 9% to $5.7 million.
- These declines were due to increased advertising and marketing expenses aimed at driving revenue growth for certain brands.

Legacy FitLife Performance:
- Legacy FitLife's total revenue increased 7% year-over-year, with wholesale and online sales contributing 59% and 41% respectively.
- Gross margin increased to 43.8%, while contribution increased 5% to $3.1 million.
- Growth in the legacy business was driven by increased online sales and stable wholesale revenue.

Challenges with Mimi's Rock (MRC):
- MRC's total revenue declined 16% year-over-year to $6.3 million, with gross margin declining to 46.5%.
- The decline was attributed to tariffs impacting skin care brands and product mix issues with the Dr. Tobias brand.

Irwin Naturals Acquisition:
- The acquisition of Irwin Naturals was completed subsequent to Q2 2025, with plans to integrate it to increase online revenue and gross margins.
- Irwin's revenue for the trailing 12 months was approximately $60 million, with a gross margin of 35%.
- The integration is expected to leverage FitLife's online capabilities and distribution networks for further growth.