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Sep 30, 2024
Olaplex Q3 2024 Earnings Report
Olaplex's third quarter results reflected a decrease in net sales and net income compared to the same period last year, with the company revising its fiscal year 2024 guidance due to a shift in the trajectory of its transformation and realignment of its international business.
Key Takeaways
Olaplex reported a 3.6% decrease in net sales to $119.1 million and a 27.3% decrease in net income for the third quarter of 2024. The company has revised its fiscal year 2024 guidance due to the realignment of its international business and weaker performance than anticipated.
Net sales decreased by 3.6% to $119.1 million.
Professional channel sales decreased by 12.6% to $42.2 million.
Direct-To-Consumer channel sales increased by 6.8% to $34.3 million.
Diluted EPS was $0.02, compared to $0.03 in the third quarter of 2023.
Olaplex
Olaplex
Olaplex Revenue by Segment
Revenue by Segment
Specialty Retail Revenue
CapyFin.comProfessional Revenue
CapyFin.comDirect-To-Consumer Revenue
CapyFin.com Forward Guidance
The company updated its guidance for net sales, adjusted net income and adjusted EBITDA for fiscal year 2024.
Positive Outlook
- The Company anticipates increased promotional activity during the holiday period across geographies relative to its previous assumption.
- The company expects adjusted SG&A in the range of $167 million to $170 million in fiscal year 2024 compared to its prior assumption of $172 million to $179 million.
- The Company anticipates that adjusted SG&A will be lower than previously expected primarily due to a reduction in fiscal year 2024 non-payroll-related advertising and marketing expenses compared to its previous assumption.
- The Company now expects net interest expense to be approximately $34 million during fiscal year 2024, compared to its previous assumption of $32 million to $34 million.
- The Company now expects an adjusted effective tax rate of approximately 19.5% for fiscal year 2024, compared to its previous assumption of 19.5% to 20.5%.
Challenges Ahead
- The Company anticipates weaker performance from its international business resulting from the Company's actions to simplify and further realign its distribution network in an effort to strengthen its international sales operations, as well as the Company's limited approach to international marketing that is expected to lead to softer demand.
- The business is not yet experiencing the level of lift in demand from the deployment of new sales and marketing investments that the Company previously anticipated.
- The Company anticipates adjusted gross profit margin in the range of 70.9% to 71.6% compared to its prior assumption of 72.5% to 73.1% in fiscal year 2024.
- The Company expects that adjusted gross profit margin will be lower than previously anticipated primarily due to greater deleverage from lower sales volumes on its fixed warehousing costs, as well as additional promotional activity expected during the fourth quarter of 2024.
- The Company now expects adjusted EBITDA margin in the range of 29.9% to 30.6% for fiscal year 2024, compared to prior assumption of 32.8% to 34.3%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income