THE WHAT? Olaplex has reported a continued downturn in its sales, with a 13.1 percent decrease in net sales down to $98.9 million in the first quarter of 2024. The decline is largely attributed to the brand’s strategic decision to reduce the number of its distributors to combat product diversion.
THE DETAILS During its latest earnings call on May 2, Olaplex’s CEO Amanda Baldwin affirmed the company’s commitment to rectifying distribution issues that have plagued its sales channels, particularly in Europe. Despite the sales downturn, the company maintains its 2024 sales guidance of between $435 to $463 million. Shares saw a slight uptick to $1.66 post-earnings call, though they remain significantly lower than their post-IPO highs.
THE WHY? Olaplex’s adjusted EBITDA for the quarter stood at $35.5 million, down from $50 million year-over-year, yet the company achieved a slight increase in gross profit margin to 72.1 percent. The major sales decline stemmed from international markets, with a notable 24.3 percent drop, contrasted by a modest 2.5 percent increase in U.S. sales.
