Dive Brief:
- Hair care brand Olaplex reported its third-quarter net sales decreased 30% year over year to $123.6 million, according to a company press release Tuesday. Direct-to-consumer net sales were down 18.2% to $32.1 million while the company’s professionals and specialty retail channels also saw declines.
- Olaplex’s net income for the period dropped 66.5% to $20.4 million and gross profit margin declined from 73.6% to 67.6%.
- The brand updated its fiscal year 2023 net sales guidance from a previously projected range between $445 million and $465 million to now expect $450 million to $460 million.
Dive Insight:
Olaplex’s sales declines come as the brand continues to see a “lower level of demand for its products,” per the release.
"Our third quarter results and the encouraging early indicators from our increased investments support our belief that we are making solid progress towards stabilizing our sales trend in the second half of 2023,” J.P. Bilbrey, Olaplex’s interim CEO, said in a statement. “We remain excited about the untapped opportunities ahead of OLAPLEX and are implementing changes that we believe will position the brand for long-term profitable growth."
The brand’s latest earnings come after it announced last month that CEO JuE Wong stepped down from the top position and would be succeeded by Amanda Baldwin. On a call with analysts Tuesday, Bilbrey said Baldwin will take on the position by mid-December.
Olaplex CFO Eric Tiziani told analysts on the call that performance remains strong for Olaplex’s e-commerce website with a second consecutive quarter of year-over-year growth. The executive, however, noted that the brand has more work to do to deepen its engagement with the professional stylist community. The brand increased its activations with professionals in the third quarter.
“We continue to see relative strength in direct to consumer, in large part because of the investments we've been putting not only in the lower funnel against that channel, but also as we think about the upper funnel investments,” Tiziani said.
Regarding sentiment about the brand on social media, Tiziani said that it has improved significantly throughout the year since “negative media” and “misinformation” occurred in the first quarter of the year. Olaplex has been actively investing to combat misinformation and drive a more positive narrative. As part of its education efforts, the brand recently established an internal field sales and education team specific to its specialty retail and professional channels in the U.S.
