Betterware de México(BWMX) - 2024 Q3 - Quarterly Report

Financial Performance - Q3 net revenue increased by 6.6% year-over-year to $3,330,394, and year-to-date revenue grew by 7.4% to $10,322,290[9]. - Adjusted EBITDA rose by 11.7% in Q3 to $591,575, reflecting operational efficiencies despite challenges[10]. - Free Cash Flow surged by 41.9% in Q3 to $417,379, driven by improved working capital management[10]. - Net revenue for Q3 2024 increased by 6.6% to Ps. 3,330,394 compared to Ps. 3,123,507 in Q3 2023[39]. - Gross profit for Q3 2024 rose by 8.1% to Ps. 2,371,259, up from Ps. 2,192,871 in Q3 2023[39]. - Operating income decreased by 12.8% to Ps. 59,047 in Q3 2024 from Ps. 438,111 in Q3 2023[39]. - Net loss for Q3 2024 was Ps. 115,614, a decline of 265.7% compared to a net income of Ps. 196,991 in Q3 2023[39]. - EBITDA for Q3 2024 dropped by 70.4% to Ps. 156,545, down from Ps. 529,424 in Q3 2023[39]. - Net revenue for the nine months ended September 30, 2024, increased by 7.4% to Ps. 10,322,290 compared to Ps. 9,607,815 in the same period of 2023[41]. - Operating income for the nine months ended September 30, 2024, decreased by 21.4% to Ps. 1,276,957 from Ps. 1,623,800 in 2023[41]. - Net income for the nine months ended September 30, 2024, was Ps. 479,300, a decrease of 25.5% from Ps. 643,358 in 2023[41]. Revenue Growth by Segment - Jafra Mexico achieved a 9.2% year-over-year revenue increase in Q3, contributing to overall growth momentum[10]. - Betterware Mexico achieved its fourth consecutive quarter of year-over-year revenue growth, indicating a solid recovery[3]. - Betterware Mexico achieved a net revenue of $1,465,577 in Q3 2024, representing a year-over-year growth of 3.2% and a 5.7% increase for the first nine months[24]. - Jafra Mexico reported a net revenue of $1,623,697 in Q3 2024, reflecting a 9.2% year-over-year growth and a cumulative increase of 9.8% for the first nine months[28]. - Jafra US net revenue increased by 11.7% in Q3 2024, totaling $241,120, driven by higher productivity per Associate[32]. Margin and Cost Management - Betterware Mexico's EBITDA decreased by 14.7% in Q3 2024, totaling $279,889, with a year-to-date decline of 18.4% to $966,463[24]. - Jafra Mexico's adjusted EBITDA grew by 52.0% in Q3 2024, reaching $318,148, and increased by 38.4% year-to-date[28]. - Betterware Mexico's gross margin fell to 54.8% in Q3 2024, down 148 basis points year-over-year, primarily due to peso depreciation and increased international freight costs[27]. - Betterware is implementing a comprehensive pricing strategy to protect margins and enhance consumer loyalty amid external cost pressures[27]. Future Outlook - The company plans to propose a Ps. 250 million dividend for Q3 2024, marking the nineteenth consecutive quarterly dividend payment[20]. - 2024 net revenue guidance is set between $13,800 million and $14,400 million, reflecting a growth range of 6.1% to 10.7%[23]. - The company expects full-year EBITDA to be closer to the lower end of the guidance range due to temporary margin impacts[22]. Operational Metrics - Betterware Mexico's average monthly order rose by 11.6% in Q3 2024, reaching $2,034, while Jafra Mexico's average monthly order increased by 12.4% to $2,347[24][28]. - Total investments in Betterware's U.S. and Peru operations reached $80.2 million, with expected financial contributions by the end of 2025[27]. - Jafra US launched a Shopify e-commerce platform in September 2024, aimed at enhancing sales despite a temporary impact on activity levels[35]. Company Overview - Betterware de México, S.A.P.I. de C.V. is the leading direct-to-consumer company in Mexico, focusing on innovative household products and has expanded into the beauty market through the acquisition of JAFRA on April 7, 2022[63]. - The company operates with an asset-light business model, demonstrating strong profitability and double-digit revenue growth rates, alongside free cash flow generation[63]. - The company distributes its products in both Mexico and the United States, enhancing its market reach[63]. Investor Relations - The Q3 2024 conference call is scheduled for October 24, 2024, at 3:30 pm Mexico City Time, providing an opportunity for investors to engage with management[65].