Analyst Anticipates EBITDA Improvement In Betterware's Q2 Results, Eyes Return To Growth In 2H23

Telsey Advisory Group analyst reiterated a Moderate Risk rating on the shares of Betterware De Mexico S.A.P.I. DE C.V. BWMX with a price target of $16.

The analyst anticipates Q2 sales growth of 1.3% Y/Y to MX$3.29 billion, driven by growth at Jafra of 14.4%, mostly offset by a (12%) decline at Betterware.

Betterware's 2Q23 result should reflect a similar path as 1Q23 with sales

stabilization in the Betterware business and growth at Jafra as the company revamps the product assortment and marketing, said the analyst.

The analyst expects EBITDA at the Betterware business will improve Y/Y and come in at an EBITDA margin of ~30%, following a realignment of the cost structure to the current sales volume and the benefit from lower ocean freight costs.

The analyst will look forward for color on product introductions at Betterware and the potential to return to growth in 2H23.

Also, updates on the timing of Betterware's expansion into the U.S., early reception to the Jafra rebranding in Mexico, and progress on reducing the Jafra USA EBITDA losses will be anticipated.

Overall, after a challenging 2H21 and 2022, Betterware seems to be on a positive trajectory, and the analyst believes the company can achieve its 2023 financial targets.

Betterware reports 2Q23 earnings on Thursday, July 27, with a conference call the following morning.

Price Action: BWMX shares are trading higher by 2.20% at $13.26 on the last check Monday.