Betterware de México's Q4 2024 Earnings Call: Unpacking Contradictions in Inventory, Expansion, and Product Growth Strategies

These are the key contradictions discussed in Betterware de México, S.A.P.I. de C.V.'s latest 2024Q4 earnings call, specifically including: Inventory Levels and Strategy, Expansion Plans, Inventory Management and Normalization Strategy, and Product Category Growth Focus for Jafra:



Strong Revenue Growth and Segment Performance:
- Betterware de México reported double-digit revenue growth of 11.1% in Q4 2024 compared to the same period last year.
- This growth was primarily driven by Jafra Mexico, which achieved remarkable 22.2% growth in the quarter, and Betterware Mexico demonstrating resilience with a 1.5% increase.

Challenges to Profitability:
- Despite EBITDA increasing by 2% to MXN2.8 billion versus 2023, it was slightly below the low end of guidance, mainly due to external headwinds like supply chain challenges and Mexican peso depreciation.

Strategic Acquisitions and Growth:
- The acquisition of Jafra three years ago has led to a valuable brand, increased category diversification, and demonstrated BeFra's ability to execute on its M&A strategy.
- Under BeFra’s leadership, Jafra Mexico has experienced a resurgence with sales multiplying by 1.4 times, profitability by 1.6 times, and EBITDA margins expanding from 13% to 20.7%.

Expansion and International Market Penetration:
- BeFra is expanding into Latin America with plans to launch in Ecuador in June 2025 and future intentions to expand into Peru and Colombia.
- The company is also focused on consolidating its Mexican operations and deepening market penetration in the U.S. market through its established models.