Betterware (BWMX) Q1 2025 earnings summary

Executive summary

• Q1 2025 net revenue declined 2.9% year-over-year, mainly due to weak consumer demand, macroeconomic headwinds, and a 9.8% drop in Betterware Mexico sales, while Jafra Mexico grew 1.1%.

• Gross margin contracted by 353 basis points, primarily from FX headwinds and higher costs as the Mexican Peso depreciated by 20%.

• EPS fell 48.7% due to lower sales, profitability, and higher taxes.

• Management is executing strategies to re-accelerate growth, including pricing adjustments, increased promotions, sales force engagement, innovation, and operational agility.

• The company remains focused on long-term growth, operational discipline, financial flexibility, and international expansion, with Guatemala showing growth and Ecuador launch on track.

Financial highlights

• Consolidated net revenue for Q1 2025 was Ps. 3,603 million, down 2.9% year-over-year.

• Gross margin decreased to 66.2%, down 353 bps; EBITDA declined 29.1% to Ps. 535/536 million, with EBITDA margin at 15.3%.

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

• Free cash flow was negative at -Ps. 55.8/56 million, impacted by higher inventory and tax payments.

• Net debt/EBITDA ratio closed at 2.08x, up from 1.83/1.78 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, contingent on macroeconomic stabilization.

• Management remains cautious, monitoring costs, inventories, and cash flow amid ongoing economic and consumption uncertainty in Mexico and the US.

• Quarterly updates will be provided as market conditions evolve.