On August 6, 2024, Olaplex Holdings Inc (OLPX, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. The company, a science-enabled, technology-driven beauty firm, reported a mixed performance with revenue falling short of analyst estimates but earnings per share (EPS) meeting expectations.
Company Overview
Olaplex Holdings Inc is renowned for its innovative, science-backed haircare solutions. The company collaborates with professional hairstylists and consumers to address prevalent haircare concerns through proprietary technology. Olaplex operates a global omnichannel platform, generating revenue primarily from professional sales, followed by specialty retail and direct-to-consumer (DTC) channels. The majority of its revenue comes from international markets.
Q2 2024 Financial Performance
For the second quarter of 2024, Olaplex Holdings Inc reported net sales of $103.9 million, a 4.8% decrease compared to $109.2 million in the same period last year. This figure fell short of the analyst estimate of $103.65 million. The company's diluted EPS remained steady at $0.01, aligning with both the previous year's performance and analyst expectations of $0.01.
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Net Sales | $103.9 million | $109.2 million | (4.8)% |
| Gross Profit | $72.4 million | $77.5 million | (6.5)% |
| Net Income | $5.8 million | $6.2 million | (6.1)% |
| Diluted EPS | $0.01 | $0.01 | 0% |
Revenue Breakdown by Channel
Olaplex's revenue performance varied across its sales channels:
- Specialty Retail: Increased by 22.4% to $36.4 million
- Professional: Decreased by 18.4% to $33.4 million
- Direct-To-Consumer: Decreased by 11.5% to $34.1 million
Geographically, net sales in the United States grew by 7.3%, while international sales declined by 15.1%.
Financial Metrics and Achievements
Despite the decline in net sales, Olaplex maintained a strong gross profit margin of 69.7%, slightly down from 70.9% in the previous year. Adjusted gross profit margin stood at 71.9%, compared to 72.7% last year. The company's adjusted EBITDA was $32.1 million, reflecting a 12.7% decrease from $36.7 million in Q2 2023, with an adjusted EBITDA margin of 30.8%.
Balance Sheet and Cash Flow
As of June 30, 2024, Olaplex reported $507.9 million in cash and cash equivalents, up from $466.4 million at the end of 2023. Inventory levels increased to $100.2 million from $95.9 million. Long-term debt slightly decreased to $646.4 million from $649.0 million.
CEO Commentary
"Our second quarter performance was in line with our expectations and demonstrated continued stabilization in the business. I am encouraged by the progress we are making on our transformation journey as we delivered on our goals for the first half of the year and are now shifting our focus to the back half of 2024 and beyond. I am confident in the direction we are taking the brand and remain incredibly excited about the long-term growth potential for OLAPLEX." - Amanda Baldwin, CEO
Fiscal Year 2024 Guidance
Olaplex reiterated its fiscal year 2024 guidance, projecting net sales between $435 million and $463 million, adjusted net income between $87 million and $100 million, and adjusted EBITDA between $143 million and $159 million. The company expects an adjusted gross profit margin of 72.5% to 73.1% and an adjusted EBITDA margin of 32.8% to 34.3%.
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Explore the complete 8-K earnings release (here) from Olaplex Holdings Inc for further details.
