Olaplex’s Sales Dropped 13.1 Percent in Q1
Olaplex’s financial woes continued into the first quarter.
Net sales at the beleaguered hair care company fell 13.1 percent to $98.9 million in the quarter ending March 31.
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By channel, sales in the professional channel fell 19.9 percent to $38.7 million; specialty retail slid 1.2 percent to $34.4 million, and direct-to-consumer dropped 15.7 percent to $25.7 million. In the U.S., sales rose 2.5 percent, while the international business slid 24.3 percent.
Net income plummeted 63.1 percent and adjusted net income decreased 34.4 percent. Diluted earnings per share fell to 1 cent, while adjusted diluted EPS dropped to 3 cents.
Olaplex is maintaining its guidance for fiscal 2024, anticipating between $435 million and $463 million in net sales.
The company’s share price increased 17.14 percent to $1.64 at market close.
Olaplex chief executive officer Amanda Baldwin said on a call with Wall Street analysts Thursday that 2024 is “a year aimed at delivering stabilization in the business.”
“We reported net sales slightly above the high end of our guidance range, driven by earlier than expected time of shipments in our specialty retail channel,” she said.
Baldwin added that four of the five top-selling hair care products in the prestige market in the U.S. were from Olaplex for the first quarter, per Circana data. In addition to focusing on product development, Baldwin said to expect a new campaign focusing on the brand’s core stock keeping units.
Eric Tiziani, the company’s chief financial officer — who is departing the company, effective Friday — attributed some of the declines to distributor rationalization. “We’ve benefited from a weaker prior-year net sales comparator due to certain inventory rebalancing in [the first quarter] of 2023,” Tiziani said. “This was partially offset by a negative net sales impact in [first-quarter] 2024 related to our previously announced decision to rationalize our business with certain professional distributors.”
Paul Kosturos will be stepping in as interim CFO following Tiziani’s departure.
Olaplex’s direct-to-consumer business was negatively impacted by the timing and phasing of shipments, “more than offsetting strong performance from olaplex.com, which grew year-over-year for the fourth consecutive quarter,” he said.
The declines at Olaplex came as the prestige hair care category gains steam. In 2023, prestige hair care grew 14 percent in the U.S. Olaplex was once the category’s darling, with growing sales culminating in an initial public offering that valued the company at $16 billion in 2021. Since then, increased competition, among other factors, has whittled away at the brand’s success.
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