It has been almost 5 years since the COVID-19 pandemic, during which drastic shifts were expected regarding work and consumer behavior. People were in the house more than they ever expected and started looking into ways toI have been involved in investing for the last 10 years, having studied a finance undergraduate, followed by a Master's in international finance, and finally getting the CFA designation. My current job focuses on advising Ultra High Net Worth individuals on how to construct their long-term ...

BeFra Q1 2025 Earnings Results April 2025 Q1 2025 Highlights: BeFra Group Net revenue decreased 2.9%, driven by a decline in sales on Betterware Mexico of 9.8% and softer than expected, yet positive growth in Jafra Mexico of 1.1%, tempered by weak consumer spending amid macroeconomic uncertainty. Gross Margin declined 353 basis points mainly due to margin pressures in Betterware Mexico and Jafra Mexico from FX pressures resulting in higher costs with the Mexican Peso depreciating around 20% on a yearly basi ...

Financial Data and Key Metrics Changes - Consolidated net revenues decreased by 2.9% year over year, primarily due to a challenging macroeconomic environment [16] - The Mexican peso depreciated approximately 20% year over year, impacting gross margins and profitability [16][22] - Consolidated EBITDA decreased by 29.1%, with Betterware Mexico EBITDA falling by 31.6% and Jafra Mexico EBITDA decreasing by 25.2% [19][20] - Consolidated EPS decreased by 48.7%, reflecting lower sales and overall profitability [22] - The net debt to EBITDA ratio increased to 2.08%, compared to 1.83% in Q1 2024, but remains in line with internal policy [23] Business Line Data and Key Metrics Changes - Betterware Mexico revenue declined by 9.8% year over year, while Jafra's growth slowed from double digits to single digits [17] - Consolidated gross margin contracted by 303 basis points, driven by peso depreciation and increased costs of imported goods [18] - Jafra Mexico experienced margin compression due to investments in volume-driving promotions [20] Market Data and Key Metrics Changes - Consumer trends in Mexico showed significant softening, particularly in discretionary categories like household goods [7] - Disruption in consumption was noted in both the US and China, affecting overall sales [8] Company Strategy and Development Direction - The company is focusing on strategic pricing, increased promotional activity, and deeper engagement with the sales force to drive growth [26][29] - Plans to monitor sourcing options due to tensions in China, with potential manufacturing alternatives being evaluated [29] - The company is halting expansion into the US market for Betterware, while continuing to invest in Jafra US [63][65] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current macroeconomic challenges but expressed confidence in the long-term growth fundamentals of the business [35][72] - The company maintains its full-year guidance for 2025, expecting net revenue and EBITDA growth in the range of 6 to 9% [24][60] Other Important Information - The board of directors proposed a 200 million peso dividend for Q1 2025, reflecting a commitment to shareholder returns despite current economic uncertainties [23][24] - Free cash flow was negative for the quarter, attributed to increased working capital and higher tax payments [21] Q&A Session Summary Question: Inventory levels and future cash flow - Management noted that the increase in inventory was a one-time event related to product renovations and innovations, expecting a decrease in the future [40] Question: Opportunities from China - Management acknowledged a decrease in container prices as a potential advantage but could not confirm improved pricing from Chinese manufacturers yet [44] Question: FX impact and future comparisons - Management confirmed that Q1 was the hardest comparison due to significant peso depreciation, with expectations for more stable comparisons in the coming quarters [48] Question: Quarter performance and trends - Management observed a softening in consumption as Q1 progressed, with expectations for stabilization rather than a rebound in the near term [54][60] Question: Halting US expansion - Management clarified that the halt refers specifically to Betterware US, while Jafra US will continue to operate and invest in growth [63][65]

Betterware (BWMX) Q1 2025 Earnings Call April 24, 2025 05:30 PM ET Company Participants Andres Campos - President & CEORodrigo Muñoz - Corporate CFOLuis Campos - Chairman of the Board Conference Call Participants Eric Beder - CEO & Senior Research AnalystCristina Fernández - Managing Director & Senior Equity Research Analyst Operator Thank you, and welcome to Befre's First Quarter twenty twenty five Earnings Conference Call. Speaking on today's call are Befre's Chairman of the Board, Luis Campos President a ...

Financial Performance - Net revenue for Q1 2025 decreased by 2.9% year-over-year, totaling $3,499,151, primarily due to a 9.8% decline in Betterware Mexico's sales[12][14] - Gross margin contracted by 353 basis points to 66.2%, influenced by higher supply costs and a 20.3% depreciation of the Mexican peso against the U.S. dollar[12][14] - EBITDA fell by 29.1% year-over-year to $535,265, with an EBITDA margin of 15.3%, reflecting lower sales and increased administrative expenses[12][14] - Net income decreased by 48.7% to $151,394, impacted by lower sales and EBITDA, despite a positive effect from reduced interest expenses[12][14] - Free cash flow was negative at -$55,841, primarily due to extraordinary cash outflows and increased working capital requirements[12][14] - Net revenues decreased 9.8% YoY in Q1 2025, marking the first YoY decrease since Q3 2023, primarily due to economic uncertainty and softening demand in Mexico[29] - Gross margin decreased by 473 basis points YoY, with COGS increasing from $18.0 to $20.0, driven by the depreciation of the Mexican peso[29] - EBITDA declined by 31.6%, resulting in a contraction of the EBITDA margin by 594 basis points, reflecting external macroeconomic pressures[29] - Net revenue for Q1 2025 was $3,499,151, a decrease of 8.0% compared to Q4 2024's $3,778,468[46] - Net income for Q1 2025 was $150,728, down 48.0% from $295,263 in Q1 2024[46] - EBITDA for Q1 2025 was $535,265, reflecting a decline in EBITDA margin to 15.3% from 20.4% in Q4 2024[46] Associate and Sales Metrics - The average Associate base decreased by 6.3% to 1,138,418, while the end-of-period base fell by 7.0% to 1,122,047[12][14] - The average base of associates for Betterware Mexico decreased to 645,359 in Q1 2025 from 693,666 in Q4 2024[43] - The average monthly order for Betterware Mexico in Q1 2025 was $2,152, a slight decrease from $2,158 in Q4 2024[43] - Monthly growth rate for Betterware Mexico in Q1 2025 was 18.7%, an increase from 14.3% in Q4 2024[43] - The average monthly order for Jafra Mexico in Q1 2025 was $2,419, a slight increase from $2,439 in Q4 2024[44] - Monthly churn rate for Jafra US in Q1 2025 was 11.8%, a decrease from 14.7% in Q4 2024[45] Strategic Initiatives - Betterware is targeting a 52% reduction in excess inventory for the year, from $529M to $252M, with inventory at $483M as of Q1[29] - Strategic pricing adjustments and increased promotional activities are being implemented to enhance sales engagement and balance affordability with margin protection[29][33] - New compensation plans and catalogue redesigns are set to launch in Jafra US to improve consultant recruitment and sales conversion[36] Future Outlook and Guidance - The company maintains its 2025 financial guidance, projecting net revenue growth of approximately 6.0% to 9.0%[26][25] - Jafra's forward-looking statements indicate potential variability in actual results due to various factors, with no obligation to update these projections[64] Cash Flow and Liquidity - The current ratio declined by 11.9% to 0.92, indicating reduced liquidity[16] - Cash flows from operating activities in Q1 2025 resulted in a net cash outflow of $42,898, compared to a net inflow of $384,223 in Q1 2024[42] - Total cash and cash equivalents at the end of Q1 2025 were $344,073, down from $425,177 at the end of Q1 2024[42] - The proposed dividend for Q1 2025 is Ps. 200M, reflecting management's commitment to shareholder value despite negative free cash flow[24] International Expansion - Betterware's international expansion includes signs of recovery in Guatemala and the launch of operations in Ecuador[32] Jafra Performance - Jafra Mexico's net revenue rose 1.1% YoY, with a gross margin of 73.5%, despite a decline of 398 basis points[30] - Jafra US experienced a 14.6% increase in net revenue in MXN, but a 4.7% decrease in USD YoY, with a strong sales rebound of 27.0% in March[34][36] - EBITDA for Jafra US declined by 9.3% to a negative $633,000, impacted by extraordinary legal settlement expenses of $300,000[36] - Jafra Mexico reported Q4 2023 net revenue of $1,668,956, with a gross margin of 78.8% and an EBITDA of $532,780, resulting in an EBITDA margin of 31.9%[48] - Jafra US experienced Q4 2023 net revenue of $260,256, with a gross margin of 74.4% and an EBITDA of $36,361, leading to an EBITDA margin of 14.0%[49] - Jafra Mexico's Q4 2024 net revenue is projected to increase to $2,038,993, while the EBITDA is expected to rise to $440,630, with an EBITDA margin of 21.6%[48] - Jafra US anticipates a slight decrease in Q4 2024 net revenue to $244,620, with an EBITDA of $891 and an EBITDA margin of 0.4%[49] Reporting Changes - The company will start reporting salesforce metrics under unified terminology for all business units beginning Q2 2024, with no adverse effect on reported results[55] - The company emphasizes the importance of non-IFRS financial measures like EBITDA and EBITDA margin for internal analysis and comparison with industry peers[54] Upcoming Events - The next conference call for Q1 2025 is scheduled for April 24, 2025, at 3:30 pm Mexico City Time[65]

Group 1 - Betterware de Mexico (NYSE: BWMX) reported strong Q4 results with significant growth, although margins were affected by external factors [1] - Jafra Mexico experienced impressive growth, increasing by 22% year over year during the quarter [1] Group 2 - The performance in the Betterware segment contributed positively to the overall results, indicating a robust operational performance [1]

Financial Data and Key Metrics Changes - The company reported a double-digit revenue growth of 11.1% in Q4 2024 compared to the same period last year [4] - Consolidated net revenue for the full year increased by 8.4%, driven by Betterware Mexico's 4.6% growth and Jafra Mexico's 13% growth [19] - EBITDA increased by 2% to MXN 2.8 billion, slightly below the low end of the guidance range of MXN 2.9 billion [6][26] - Adjusted earnings per share grew by 10.5% in Q4 and 17.3% for the full year [26] Business Line Data and Key Metrics Changes - Jafra Mexico achieved a remarkable 22.2% revenue growth in Q4, contributing significantly to overall performance [5][17] - Betterware Mexico demonstrated resilience with a 1.5% net revenue growth in Q4, despite challenges [18] - Jafra U.S. experienced a revenue decrease of 17.6% in U.S. dollars, primarily due to implementation issues with Shopify Plus [18] Market Data and Key Metrics Changes - Betterware Mexico holds an estimated 4% market share in the household product market, with a goal to deepen market penetration [8] - Jafra Mexico aims to become the number one direct sales beauty brand in Mexico, currently holding a 4% market share [37] Company Strategy and Development Direction - The company plans to focus on five priority fronts: conquering Mexico, international expansion, inorganic growth, centralized services, and sustainability [33][39][45] - The strategy includes enhancing operational efficiency, expanding product offerings, and improving sales force engagement [35][38] - The company aims to lower its net debt to EBITDA ratio to 1.5 times or below by 2025 [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged unexpected external headwinds affecting profitability, including supply chain disruptions and currency depreciation [6][7] - The outlook for 2025 includes expectations of mid to high single-digit growth for both net revenues and EBITDA [27] - Management expressed confidence in the company's growth trajectory and commitment to delivering long-term shareholder value [28][46] Other Important Information - The company has proposed a dividend of MXN 250 million for Q4, marking the 20th consecutive dividend since its IPO [27] - Adjusted EBITDA for the full year increased by 2%, despite a decline in Betterware Mexico's EBITDA [24] Q&A Session Summary Question: Inventory levels and future expectations - The company experienced inventory shortages in the first half of the year and built up inventory in the second half due to rising freight costs and supply chain disruptions [49] - Normalized inventory levels are expected to be around MXN 2,000 million instead of MXN 2,500 million by the end of 2024 [55]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 11.1% in Q4 2024 compared to the same period last year, driven by strong performance in Jaffra Mexico [3][11] - For the full year 2024, consolidated revenue increased by 8.4% compared to 2023, with Jaffra Mexico achieving a 13% increase and Better World Mexico a 4.6% increase [4][14] - EBITDA increased by 2% to RUB 2.8 billion versus 2023, although it was slightly below the low end of the guidance range [4][18] - Adjusted earnings per share grew by 10.5% in Q4 and 17.3% for the full year, supported by lower interest expenses and gains on derivative instruments [20] Business Line Data and Key Metrics Changes - Jaffra Mexico experienced a remarkable 22.2% revenue growth in Q4, while Better World Mexico showed resilience with a 1.5% growth [3][12] - Jaffra U.S. saw a revenue decrease of 17.6% in U.S. dollars, primarily due to challenges with the implementation of Shopify Plus [13] - Better World Mexico's EBITDA surged by 31.8% in Q4, with a margin expansion of 508 basis points [18] Market Data and Key Metrics Changes - Better World Mexico holds an estimated 4% market share in the household product market, with plans to deepen market penetration [5] - Jaffra Mexico's gross margin improved significantly, rising to 76.3%, driven by a favorable product mix and pricing strategy [17] Company Strategy and Development Direction - The company aims to consolidate its operations in Mexico, focusing on expanding market share and enhancing operational efficiency [25][26] - Plans for international expansion include positioning brands in the U.S. market and entering Latin America, starting with Ecuador [29][30] - The company is committed to inorganic growth by exploring acquisitions that complement existing brands [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged external challenges, including supply chain disruptions and rising costs, but expressed confidence in the company's resilience and growth potential [19][21] - The target for 2025 includes mid to high single-digit growth for both net revenues and EBITDA [21] Other Important Information - The company plans to launch a new online training program for its sales force and enhance digital capabilities [28] - A dividend of Ps. $250,000,000 for Q4 has been proposed, marking the twentieth consecutive dividend since the 2020 IPO [20][21] Q&A Session Summary Question: Inventory levels and normalization - Management indicated that inventory levels rose due to previous shortages and rising costs, with expected normalized levels around MXN 2,000 million for 2024 [37][44]

Group 1 - The individual investor focuses on undercovered companies, particularly in technology, software, electronics, and energy transition sectors [1] - The investor has over 50 companies on their watchlist and has been investing personal capital for over 7 years globally [1] - The investor holds a Master's degree in Electrical Engineering and works as an automotive battery R&D engineer in Sweden [1] Group 2 - The investor aims to identify asymmetric investment opportunities to achieve market-beating returns through diligent research of small to mid-cap companies [1]

Company Performance - Betterware de Mexico SAPI de C reported quarterly earnings of $0.26 per share, missing the Zacks Consensus Estimate of $0.29 per share, and down from $0.31 per share a year ago, representing an earnings surprise of -10.34% [1] - The company posted revenues of $176.15 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 4.72%, but down from $183.09 million year-over-year [1] - Over the last four quarters, Betterware de Mexico has surpassed consensus revenue estimates four times [1] Market Performance - Betterware de Mexico shares have lost about 11.8% since the beginning of the year, while the S&P 500 has gained 21.5% [2] - The current Zacks Rank for Betterware de Mexico is 5 (Strong Sell), indicating expected underperformance in the near future [4] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.47 on revenues of $181.91 million, and for the current fiscal year, it is $1.72 on revenues of $702.45 million [4] - The estimate revisions trend for Betterware de Mexico is currently unfavorable, which may impact future stock performance [4] Industry Context - The Consumer Products - Discretionary industry, to which Betterware de Mexico belongs, is currently in the bottom 40% of the Zacks industry rankings [5] - Research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [5] - Spectrum Brands, another company in the same industry, is expected to report quarterly earnings of $1.13 per share, reflecting a year-over-year change of -16.9% [5]