Olaplex (OLPX) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $103.9 million, down 4.8% year-over-year, with sequential improvement and business stabilization; specialty retail grew while professional and DTC channels declined.

• Maintained industry leadership, ranking top among prestige haircare brands and holding four of the five best-selling prestige hair products YTD 2024.

• Significant investments in marketing, with $16 million in non-payroll expenses in Q2 and a renewed focus on content and brand consistency.

• Leadership strengthened with new COO/CFO and CMO appointments, and new Bond Shaping Technology launched.

• Focus remains on long-term growth, innovation, and global distribution alignment amid a challenging macroeconomic and competitive environment.

Financial highlights

• Q2 2024 net sales: $103.9 million (down 4.8% year-over-year); adjusted EBITDA: $32.1 million (30.8% margin); adjusted net income: $18.8 million; net income: $5.8 million.

• Adjusted gross profit margin was 71.9%, down from 72.7% year-over-year; reported gross margin was 69.7%.

• Cash and cash equivalents stood at $507.9 million as of June 30, 2024; long-term debt was $646.4 million.

• Cash from operations in the first half was $59.9 million.

• Diluted EPS for Q2 2024 was $0.01; adjusted diluted EPS was $0.03.

Outlook and guidance

• FY 2024 guidance reiterated: net sales of $435–$463 million, adjusted EBITDA of $143–$159 million, and adjusted net income of $87–$100 million.

• Adjusted gross profit margin expected at 72.5%–73.1%; adjusted EBITDA margin at 32.8%–34.3%.

• Non-payroll marketing expenses projected at $66–$70 million for FY 2024.

• Anticipates improvement in the second half from holiday kits, new product launches, and seasonal DTC lift.

• Full-year SG&A expected at $172–$179 million, with increased marketing and organizational costs.