Betterware de México Highlights Profitability, Eyes Tupperware Boost

Betterware De Mexico, S.A. De C.V ((BWMX)) has held its Q1 earnings call. Read on for the main highlights of the call.

Betterware de México’s latest earnings call struck an upbeat tone, as management highlighted double‑digit EBITDA growth, expanding margins, strong cash generation, and lower leverage. While headline revenue growth was modest and weighed by Jafra Mexico and one less week in the quarter, executives argued that underlying momentum and strategic moves, including the Tupperware deal, position the group for faster, more profitable growth.

EBITDA and Margin Expansion

EBITDA rose 14% year over year, and the EBITDA margin widened from 15.3% to 17.4%, a notable 211‑basis‑point expansion. Management emphasized that excluding extraordinary Tupperware transaction costs, margin would have been close to 18.4%, while net income nearly doubled, underscoring normalized profitability and lower interest expense.

Revenue Stability with Select Growth

Group revenue edged up 0.3% versus last year, reflecting stability more than acceleration but with pockets of strength. Betterware and BetterWork posted 2.6% growth despite one fewer week, and management noted that on a comparable‑week basis, Betterware revenue would have been roughly 3.3%, suggesting healthier underlying demand.

Strong Cash Generation and Shareholder Returns

Free cash flow was robust, with 58% of EBITDA converted into cash, supporting both growth plans and ongoing shareholder distributions. The board proposed a MXN 200 million dividend, extending the streak to 25 consecutive quarterly dividends since the IPO and keeping the trailing dividend‑to‑EBITDA ratio around 33%.

Improving Leverage and Capital Efficiency

Balance sheet and return metrics continued to improve, as net debt to EBITDA fell to 1.5 times, down sharply from 2.4 times at the end of 2022 and 3.1 times after the Jafra acquisition. ROTA reached 22.7%, ROIC climbed to 27%, and trailing EPS hit MXN 31.9, signaling stronger capital efficiency and healthier financial footing.

Regional Expansion Momentum

The company reported solid traction in its regional expansion, particularly in the United States and northern Latin America. Jafra US revenue grew 8.6% in U.S. dollars with a 3.4% increase in the associate base, while BetterWork Colombia launched and operations in Ecuador and Guatemala lifted their combined contribution from 0.1% to 0.7% of group revenue.

Business Unit Profitability Gains

Core units showed marked profitability improvement, with Betterware and BetterWork EBITDA margin rising 190 basis points to 20.5% and EBITDA increasing 12.9% year over year. Jafra Mexico also posted a 165‑basis‑point margin increase to 17%, benefiting from cost controls and restructuring measures that are beginning to flow through to the bottom line.

Strategic M&A Opportunity — Tupperware

Management highlighted the pending acquisition of Tupperware Latin America as a major strategic catalyst, calling it immediately earnings accretive with an estimated 40% boost to EPS once closed. The deal would give Betterware a meaningful entry into Brazil, a market of roughly $100 million in revenue, and broaden the company’s footprint across Latin America.

Digital & Product Initiatives

A slate of digital projects and new products is expected to support growth and engagement, including a Salesforce CRM rollout planned for the second quarter and the Jafra Plus app slated for the third quarter. BetterWare Plus analytics, a new payment system pilot, catalog redesigns for the second half, and early success of Better Clean Tabs aim to drive higher purchase frequency.

Modest Overall Revenue Performance

Despite operational gains, management acknowledged that overall revenue performance remained muted, with only 0.3% growth year over year and a first‑quarter trend below the full‑year target range. The softness was largely tied to a temporary slowdown at Jafra Mexico and the calendar effect of one fewer week, factors they believe mask stronger underlying trends.

Jafra Mexico Associate Base Decline and Revenue Moderation

In Mexico, Jafra’s prior emphasis on productivity over recruitment led to a smaller associate base, which in turn moderated revenue growth in the period. Executives outlined initiatives focused on reigniting associate recruitment and expect this to support a revenue inflection beginning in the second quarter as the model rebalances.

Extraordinary and Legal Expenses Impacting Margins

Reported margins were held back by extraordinary costs linked to the Tupperware transaction and legal expenses in Jafra US, which temporarily turned that unit’s EBITDA negative. Adjusting for these items, management estimated the group EBITDA margin would be about 18.4%, while Jafra US would have posted an EBITDA margin near 2.6% instead of a loss.

Near-Term Increase in Leverage Post-Acquisition

The company flagged that leverage will tick up once the Tupperware deal closes, with net debt to EBITDA expected to move from 1.5 times to roughly 1.9 times. Management framed this as a manageable, temporary step‑up in leverage, given the accretive nature of the acquisition and their recent track record of rapid de‑leveraging.

Limited Current Revenue Contribution from New Markets

While expansion into the Andean region and Central America is progressing, these operations remain small in the context of the broader group today. Combined, the Andean and Central American markets account for just 0.7% of revenue, and Latin America contributes only about 1.7% of BetterWorld’s revenue, meaning significant scaling is still needed to materially impact results.

Supply Chain and Cost Risk

Management noted that freight costs have seen a slight, temporary increase due to oil price swings and geopolitical tensions, which they are monitoring closely. They also highlighted potential pressure on supplier and raw material costs, for which contingency plans exist, though the duration and magnitude of these risks remain uncertain.

Calendar and Timing Effects on Comparables

A timing quirk created by having one fewer week in the quarter distorted year‑over‑year comparisons, particularly for revenue growth. Leadership stressed that when adjusting for this calendar effect, underlying performance appears stronger and more consistent with the company’s full‑year growth ambitions.

Forward-Looking Guidance and Outlook

Guidance was reiterated for full‑year revenue growth of 4–8%, with management expecting sequential improvement starting in the second quarter and a stronger second half. They anticipate maintaining solid cash generation, absorbing a temporary leverage increase after the Tupperware close, and capturing immediate EPS accretion alongside continued margin expansion driven by digital, regional, and product initiatives.

Betterware de México’s call painted the picture of a company trading short‑term revenue softness for long‑term profitability and scale, supported by improving returns and disciplined capital allocation. For investors, the key watchpoints will be Jafra Mexico’s associate recovery, integration of Tupperware’s Latin America assets, and the pace at which new regions and digital tools translate into sustained top‑line acceleration.