Betterware de Mexico Q2 Sales To Decline On Cut In Consumer Spending, Says Analyst

  • Telsey Advisory Group analyst Cristina Fernandez maintained a Moderate Risk rating on Betterware de Mexico SAB De C.V. BWMX and lowered the price target to $18 from $22.
  • The analyst expects core Betterware sales to decline 25% Y/Y in Q2 as its lower-end consumer returns to normal activities and cuts discretionary spending in the face of low consumer confidence and high inflation. 
  • According to INEGI, consumer confidence in Mexico remains below 50 and Consumer Price Inflation (CPI) has accelerated year-to-date through June to 7.5% from 5.6% in 2021.
  • However, Fernandez feels that Betterware’s business model remains attractive long-term and should return to growth in 2023 as the company is accelerating innovation, increasing incentives for associates and distributors, and changing its marketing strategies. 
  • Price Action: BWMX shares are trading lower by 0.20% at $9.99 on the last check Monday.
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