We are reiterating our Buy rating, projections and price target after reviewing the Betterware January 2024 catalog. While January represents one of the easiest comparisons in terms of catalog metrics, Betterware rolled out a record level of SKUs, punctuated by material newness and the ability to leverage the supply chain to return a high number of key favorites from prior periods. Further, after a discount driven September (over 70% of items on sale), management has continued to reduce the overall level of price cuts, with less than 25% of January SKUs on sale, the lowest level since 2021, despite being the traditional post Holiday clearance period. Further, management flexed the catalog categories back to 8, from a peak of 10, with the Better Kids and Pets categories now incorporated in other sections, allowing for an easier overall catalog read. As such, we believe the Betterware division continues to recover and reiterate our Buy rating and $17 price target for BWMX.
