Revenue — possible unit mismatch: actual is 19x the estimate
EPS — Quartr actual unavailable
Verdict
Net revenue of $4,832,313 thousand MXN rose 43.1% year over year, but $1,375,843 thousand of that is Tupperware's first full quarter of consolidation; organic revenue, meaning Betterware plus Jafra, grew 2.3%.
Guidance moved in opposite directions. Full-year net revenue growth including Tupperware was raised to 24.0% - 26.0% from 18-22%, while the organic range was pulled in to 4.0% - 5.0% from 4-8%.
Jafra, at 40.0% of group revenue, printed revenue down 2.8% to $1,933,606 thousand and EBITDA down 20.1% to a 16.9% margin from 20.6%, and the group has installed President and CEO Andres Campos as interim Managing Director of Jafra Mexico for approximately six to twelve months.
EBITDA of $1,008,375 thousand rose 39.6% with margin at 20.9% against 21.4%, and net income rose 24.2% to $390,300 thousand.
The one thing that matters: the 43.1% headline is the acquisition, not the business. Organic revenue grew 2.3%, the organic guidance top end came down from 8% to 5%, and the group CEO has taken personal charge of the brand that is 40.0% of revenue.
Key metrics
Metric
Reported
Prior year
Change
Net Revenue
$4,832,313
$3,377,299
43.1%
EBITDA
$1,008,375
$722,149
39.6%
Net Income
$390,300
$314,205
24.2%
EPS
$9.9
$8.4
17. 9%
Free Cash Flow
$1,059,215
$553,573
91.3%
Organic revenue growth
2.3%
—
—
Guidance changes
Item
New guidance
Prior guidance
FY2026 net revenue growth, including Tupperware
24.0% - 26.0%
18-22%
FY2026 organic net revenue growth, Betterware + Jafra
4.0% - 5.0%
4-8%
FY2026 EBITDA margin
19%
—
Quality of earnings
Earnings lagged the business on tax, not operations. Income before income taxes rose 43.5% while income taxes rose 75.3%, holding net income growth to 24.2% against EBITDA growth of 39.6%; the company expects the effective rate to normalize in the mid-30s% for the full year.
Cash conversion above 100% is partly a one-off. Free cash flow of $1,059,215 thousand equals 105.0% of EBITDA against 76.7% a year earlier, and the quarter included a Tupperware-related balance reclassification the company puts at $174 million MXN.
Organic profit went backwards even carrying the deal costs aside. Organic EBITDA was $649,617 thousand against $722,149 thousand a year earlier, with Betterware EBITDA up only 3.1% on revenue up 9.7% and Jafra EBITDA down 20.1%; $43 million MXN of Tupperware transaction expenses sit in Betterware's books.
Gotchas & watch items
All of the sales-force growth is acquired. The group end-of-period base rose 20.8% to 1,404,521, while Betterware's own base fell 1.5% to 699,243 and Jafra's was flat at 452,574.
Mix is diluting margin as it adds revenue. Gross margin fell 438 basis points to 64.1% and EBITDA margin slipped to 20.9% from 21.4%, with organic EBITDA margin at 18.8%.
Tupperware's own trajectory is down, not up. Brand revenue fell 6.8% year over year on a combined basis and EBITDA margin dropped 500 basis points to 26.1% from 31.1%.
The geographic diversification story is thinner than the brand story. Mexico is still 87.5% of revenue, and United States revenue shrank to $206,430 thousand from $237,534 thousand while Latin America went to $399,545 thousand from $16,002 thousand purely on the acquisition.