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Jun 30, 2023
Olaplex Q2 2023 Earnings Report
Olaplex's Q2 2023 performance was below expectations due to slower demand in Professional and Specialty Retail channels, with customers reducing inventory. The company has updated its fiscal year 2023 outlook and is focused on stabilizing demand and optimizing marketing investments.
Key Takeaways
Olaplex reported a 48.2% decrease in net sales to $109.2 million for Q2 2023 compared to Q2 2022. Net income decreased significantly to $6.2 million, and diluted EPS was $0.01. The company has revised its fiscal year 2023 guidance downward due to weaker than expected results and lower baseline demand.
Net sales decreased by 48.2% to $109.2 million compared to the same quarter last year.
Professional channel sales were down 61.2%, Specialty Retail down 53.7%, and Direct-To-Consumer down 6.4%.
Net income dropped to $6.2 million, a significant decrease from $87.7 million in Q2 2022.
The company updated its fiscal year 2023 guidance, projecting lower net sales, adjusted net income, and adjusted EBITDA.
Olaplex
Olaplex
Olaplex Revenue by Segment
Olaplex Revenue by Geographic Location
Revenue by Segment
Specialty Retail Revenue
CapyFin.comProfessional Revenue
CapyFin.comDirect-To-Consumer Revenue
CapyFin.comRevenue by Geographic Location
International Revenue
CapyFin.com Forward Guidance
The company updated its guidance for fiscal year 2023 on net sales, adjusted net income and adjusted EBITDA.
Positive Outlook
- The Company still expects to benefit from the impacts of new product introductions
- The Company still expects to benefit from new distribution gains.
- Company implemented cost savings in the second half of 2022
- Company implemented price increases in the second half of 2022
- Company expects net interest expense to be approximately $40 million during fiscal year 2023
Challenges Ahead
- For fiscal year 2023, the Company is now forecasting net sales in the range of $445 million to $465 million.
- Weaker than expected results in the second quarter of fiscal year 2023 and an assumption of lower baseline demand in the second half of fiscal year 2023
- The Company is no longer assuming baseline demand improvement from increased sales and marketing investments in the second half of fiscal year 2023.
- The Company now anticipates a 500 to 600 basis point decline in gross profit margin for fiscal year 2023
- The Company now expects more Adjusted EBITDA margin deleverage as compared to the prior fiscal year 2023 guidance due to its expectations for lower net sales and assumptions of higher operating expenses from increased sales and marketing investment for fiscal year 2023.
Revenue & Expenses
Visualization of income flow from segment revenue to net income