Betterware (BWMX) Q1 2025 earnings summary

Executive summary

• Q1 2025 net revenue declined 2.9% year-over-year, mainly due to weak consumer demand and macroeconomic volatility in Mexico and the U.S., with Betterware Mexico down 9.8% and Jafra Mexico up 1.1%.

• Gross margin contracted by 353 basis points, primarily from FX headwinds and increased promotional investments as the Mexican peso depreciated by 20%.

• EPS and net income fell 48.7% year-over-year, reflecting lower sales, profitability, and higher taxes.

• Management is implementing targeted pricing, increased promotions, sales force engagement, and innovation, while focusing on operational discipline and international expansion.

• Betterware US operations paused due to tariffs and policy uncertainty; Jafra US saw a March rebound after a slow start.

Financial highlights

• Consolidated net revenue for Q1 2025 was Ps. 3,603 million, down 2.9% year-over-year, with gross margin at 66.2% (down 353 bps) and EBITDA at Ps. 536 million (down 29.1%).

• EBITDA margin was 15.3%, down 567 bps; Betterware Mexico EBITDA fell 31.6%, Jafra Mexico EBITDA down 25.2%.

• Free cash flow was negative at -Ps. 56 million, impacted by higher inventory and tax payments, but is expected to normalize.

• Net income was Ps. 151 million, down 48.7%; EPS was Ps. 4.06, down 48.7%.

• Net debt-to-EBITDA ratio closed at 2.08, up from 1.83 in Q1 2024, but within internal policy.

Outlook and guidance

• Full-year 2025 guidance for net revenue and EBITDA growth of 6%-9% is maintained, targeting net revenue of Ps. 14,900–15,300 million and EBITDA of Ps. 2,900–3,000 million, contingent on macroeconomic stabilization.

• Management remains confident in achieving guidance if economic conditions stabilize, but acknowledges risks if softness persists and will provide quarterly updates.