Betterware de México's Q2 2025: Unpacking Contradictions in Inventory Strategy, Economic Outlook, and FX Impact

Inventory management and strategy, economic stability and consumer environment, impact of macroeconomic environment and internal strategies, FX impact on profitability, and inventory strategy and normalization are the key contradictions discussed in Betterware de México's latest 2025Q2 earnings call.



Revenue Growth and EBITDA Improvement:
- BeFra reported consolidated revenue growth of 5.1% year-over-year and 1.8% quarter-on-quarter, driven by all business units.
- The company expanded its associate base to 1.13 million, with growth across all business units.
- Revenue growth was attributed to aggressive pricing strategies, product investments, and associate expansion, offsetting a challenging macroeconomic environment.

Betterware Mexico Recovery:
- Betterware Mexico's revenue increased by 4% quarter-over-quarter, narrowing the year-over-year decline from -9.8% in Q1 to -1.1% in Q2.
- This improvement was driven by affordability and accessibility measures, associate growth, and new product launches.
- The company achieved a strong EBITDA margin of 19.9% for the quarter.

Jafra Mexico's Profitability and Growth:
- Jafra Mexico's revenue grew by 10.9% year-on-year, returning to profitability with an EBITDA margin of 21.2%.
- Growth was driven by successful rebranding efforts, increased associate base, and strategic margin investments.
- The company's strong performance was supported by a revamped leadership program and a refreshing brand identity.

Geographic Expansion and Market Recovery:
- BeFra successfully launched Betterware Ecuador, surpassing second-quarter goals with 2,500 active associates.
- Betterware Guatemala's sales returned to positive growth under new management.
- The company's focus on Central America and the Andean region's markets is expected to boost growth in the midterm.

Financial Performance and Dividend:
- Consolidated EBITDA increased 3.5% year-over-year to MXN 679 million, with a margin of 19.1%.
- BeFra generated strong free cash flow of MXN 592 million, with a year-to-date conversion rate of 44.2% of EBITDA.
- The Board of Directors proposed a MXN 200 million dividend for Q2 2025, marking the 22nd consecutive dividend since the company's IPO in 2024.