So those were mainly – those were the main reasons, both revenue, we think that Betterware Mexico had a great impact to achieve the revenue. And in this case, Jafra Mexico contributed, was one who contributed more in the profitability with an increased gross margin of about 581 basis points.
Cristina Fernández: Yes. Thank you for that.
Luis Campos: Yes.
Cristina Fernández: Yes. Thank you for that. And so – sorry, go ahead.
Luis Campos: Yes. Go ahead, Cristina.
Cristina Fernández: Yes. No, I just had a follow-up on the Jafra Mexico profitability. Was there anyone – anything that was like one time in nature that helped deliver that 31% EBITDA margin for that segment? And then as we look at 2024, how should we think about the EBITDA margins for Betterware and Jafra Mexico? I mean, you given Betterware has been sort of in that 20% range and down a little bit from first half of the year versus Jafra that has been accelerating the profitability.
Luis Campos: [Indiscernible] to explain that extraordinary profitability of Jafra for the fourth quarter, and to give you what we can expect in terms of EBITDA margins going forward for 2024.
Alejandro Ulloa: Yes. Hello Cristina. Nice talking to you. This is Alejandro Ulloa. What happened in the last quarter with our gross margin in Jafra Mexico, we had a significant improvement in this gross margin, basically because of a favorability in the exchange rate. The appreciation of the peso during this quarter was positive. We also had a reduced cost achieved through supplier negotiations with specific vendors, and that impacted almost 2% of points for gross margin. And we had a favorable variation in product volume in our manufacturing facility. So volume additionally had effect and the mix also of that products that we manufactured. So that combination arise with this improvement in margins. But what we are expecting for 2024 is that this will be normalized and we will be once again in margins between 80% to 82% range.
Cristina Fernández: Thanks. And then the last question I had was on the revenue outlook for 2024, the 6% to 11%, what are you assuming as far as like industry growth? You talked about the home solutions market stabilizing. Do you think that market can grow in 2024, and how? Maybe you can talk about the overall consumer and the beauty market that’s underpinning your revenue outlook for the year?
Andres Campos: Yes, Christina, this Andres again. So on the better [technical difficulty] we’re saying, the market has pretty much stabilized. It is important to note that during the pandemic, after the huge market growth then came a very steep decline. And now from the market studies that we make year after year we see that it has stabilized. And with a stabilized market, there’s a lot that we can do. It is important to remember that we only have around 4% of market share today and we also only have about 25% of home penetration today. So there is a lot of room for us to grow with a stabilized market. So what we’re assuming, for better word Mexico, is that the market continues to be stabilized. We’re not assuming huge growth in the market [technical difficulty] and that help us even more.
Now, [technical difficulty] side; that the beauty market in Mexico is a buoyant and growing market today. After the beauty market had some trouble and now after pandemic it’s growing buoyantly grew between 10% and 15% last year. The beauty market in Mexico and we think we can ride this market growth and also expand our market share. In Jafra Mexico we also have around 4% market share. And it’s important to understand that around 50% – five zero percent of the market is sold through direct selling in the beauty space in Mexico. So we have a lot of room to grow, a lot of room to grow in Jafra, so these two combined will help. Now, additional to this in our international operations, as I spoke earlier we should not expect any significant contribution from better word U.S., but we should expect Jafra U.S. to start growing again and contribute little-by-little to the overall revenue of the group.
Cristina Fernández: Thank you.
Andres Campos: Yes.
Operator: Our next question is from Andres Lomeli with LCA Capital. Please proceed.
Andres Lomeli: Hello. Thank you for taking my question and congratulations again for the great results. My question is regarding the expansion to new markets. You mentioned that you want to keep margin stable. I just wanted to know if you could talk a little bit about how you plan on managing the cost associated with the expansions: maybe new hires, new offices, and maintaining those margins – EBITDA margins stable throughout the years. Thank you.
Andres Campos: Yes, thank you, Andres. This is Andres again, so for the Betterware U.S. expansion. We are estimating within our projections, million dollar investments during 2024. So it’s not a very relevant investment as regards to our yearly EBITDA. And we are leveraging a lot on our capabilities in Jafra today. As I mentioned earlier, we are going to be distributing off Jafra’s distribution center the excess capacity that we have there. So that will not be a very relevant cost. We’re also leveraging on all the back office to finance, HR, all the back office. And this investment will be mainly in our commercial team for Betterware U.S. One of the good things of our business model is that we can streamline expenses very efficiently when we launch a new market.
So we are going to go step by step, not going to just go out and invest in one. We’re going to go step by step and it will not be a relevant investment. Also in Peru, we’re going also step by step. We are estimated an investment of between $500,000 to $1 million to make all the preparations in the pre-operating expenses. So in general, we don’t expect this to be too relevant and it is already implied in our guidance.
Andres Lomeli: Perfect. Thank you very much. And once again, congratulations on a great quarter.
Andres Campos: Thank you, Andres.
Operator: [Operator Instructions] That will conclude our question-and-answer portion of today’s conference call. I would like to turn the call back over to management for closing remarks.
