Betterware De Mexico’s Earnings Call: Optimism Amid Challenges

Betterware De Mexico, S.A. De C.V ((BWMX)) has held its Q2 earnings call. Read on for the main highlights of the call.

In the recent earnings call, Betterware De Mexico, S.A. De C.V. (BeFra) conveyed a cautiously optimistic sentiment. The company demonstrated resilience by bouncing back from a challenging first quarter, showcasing revenue growth and positive free cash flow. While Betterware Mexico and Jafra Mexico showed significant improvements, ongoing challenges, particularly in Jafra US and gross margin pressures, tempered the overall optimism.

Revenue Growth and Positive Free Cash Flow

BeFra’s consolidated revenue saw a 5.1% year-over-year increase and a 1.8% rise from the previous quarter, driven by all business units. This growth was complemented by the generation of positive free cash flow, marking a significant turnaround from earlier challenges.

Betterware Mexico Rebound

Betterware Mexico demonstrated a notable recovery with a 4% increase in revenue quarter-over-quarter, rebounding from a 9.8% decline year-over-year in the first quarter. This indicates a positive trajectory for the business unit.

Jafra Mexico Double-Digit Growth

Jafra Mexico achieved impressive double-digit growth, with a 10.9% increase in revenue year-on-year. The EBITDA margin also expanded to 21.2%, highlighting the unit’s strong performance.

International Expansion Success

The successful launch of Betterware Ecuador in May exceeded expectations, with the company surpassing its second-quarter goal by reaching 2,500 active associates, showcasing the potential for international growth.

Debt Leverage Improvement

The company’s net debt-to-EBITDA ratio improved to 1.97x from 2.08x in the first quarter of 2025, indicating better financial health and management of debt levels.

Jafra US Revenue Decline

Jafra US experienced an 8.9% decline in revenue year-on-year in U.S. dollars. However, there was a positive note with a 15.6% rebound quarter-over-quarter, suggesting potential for recovery.

Gross Margin Challenges

The company faced challenges with gross margins, as Betterware Mexico’s margin decreased by 127 basis points year-over-year, and Jafra Mexico’s margin was down 167 basis points compared to last year, highlighting areas needing attention.

Higher Debt Level Compared to Last Year

Despite improvements from the first quarter, the company’s debt leverage remains higher than the level reported in the second quarter of 2024, primarily due to additional short-term debt undertaken earlier this year.

Forward-Looking Guidance

BeFra provided a promising outlook for the future, projecting a 6% to 9% growth in revenue and EBITDA for the full year 2025. This forecast is supported by stable macroeconomic conditions and strategic initiatives across its business units. The company also declared a proposed MXN 200 million dividend, pending shareholder approval.

In conclusion, Betterware De Mexico, S.A. De C.V. showcased a resilient performance in its latest earnings call, with positive revenue growth and free cash flow. While challenges remain, particularly in Jafra US and gross margin pressures, the company’s strategic initiatives and international expansion efforts offer a promising outlook for the future.