Betterware de Mexico S.A.P.I. de C.V (BWMX) Q2 Earnings call transcript Jul 26, 2024

Betterware, a leading international direct selling company, held its second quarter 2024 earnings conference call, highlighting the company's growth momentum and robust financial performance. Despite facing challenges from ongoing global supply chain disruptions and market volatility, Betterware maintained a steady growth pace, marking its third consecutive quarter of growth in Mexico and recording the first year-over-year revenue increase for Jafra US since its acquisition in 2022.

Strategic Diversification and Innovation

The company's focus on product innovation and market positioning was a standout theme during the call, with Betterware Mexico capitalizing on favorable trends in the beauty market, achieving an 8.7% revenue growth in the quarter. Jafra Mexico, in particular, showed remarkable performance, posting a 10.1% year-over-year revenue increase for the first half of 2024, underscoring the effectiveness of the company's product strategies. The successful launch of a redesigned catalog and an enhanced merchandising plan further strengthened Betterware's market position in Mexico's growing market.

The acquisition of Jafra in 2022 has proven to be a strategic move, diversifying the company's product portfolio and providing Betterware with exposure to a rapidly growing market. This move not only mitigates temporary challenges but also enhances the group's resilience to market disruptions, ensuring sustainable growth and profitability for the future.

Financial Highlights and Future Outlook

Betterware's financial performance was also a topic of discussion, with the company reporting an 8% growth in net revenue for the first half of 2024, along with a 3% increase in EBITDA. Despite facing challenges such as higher freight costs and import taxes, Betterware remains confident in achieving its revenue and EBITDA targets for the year. The company's commitment to shareholder value was further emphasized by the 18th consecutive quarterly dividend payment, representing a yield of 10.7% at the end of the quarter.

Navigating Challenges with Agility

The earnings call also showcased Betterware's ability to navigate volatile market dynamics. Despite temporary challenges, including supply chain disruptions and market volatility in Mexico, the company remained confident in its ability to sustain and build upon its impressive growth record. This resilience, coupled with a strategic focus on product innovation and market positioning, positions Betterware well for continued growth and profitability in the future.

In conclusion, Betterware's second quarter earnings call highlighted the company's robust financial performance, strategic diversification, and resilience in the face of challenges. With a strong focus on product innovation and market positioning, Betterware is well-positioned for sustained growth and profitability, further solidifying its position as a leading player in the direct selling industry.