Sign in

You're signed outSign in or to get full access.

OH

OLAPLEX HOLDINGS, INC. (OLPX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net sales were $100.7M (-9.8% YoY), GAAP diluted EPS was $(0.01) vs $0.02 last year; adjusted diluted EPS was $0.01 vs $0.03, reflecting margin and demand pressure amid transformation initiatives .
  • Results came in ahead of management’s November outlook due to better-than-expected North America demand and lower promotional intensity; adjusted EBITDA was $17.5M (17.4% margin) vs 32.2% last year, but above internal expectations .
  • FY2024 actuals exceeded the lowered Q3 guidance: net sales $422.7M vs $405–$415M guided; adjusted EBITDA $129.7M vs $121–$127M; adjusted net income $75.7M vs $67–$73M .
  • FY2025 guidance frames a “brand demand + innovation” investment year: net sales $410–$431M (−3% to +2%), adjusted gross margin 70.5%–71.5%, adjusted EBITDA margin 20%–22% (down from 30.7% in FY2024) .

What Went Well and What Went Wrong

  • What Went Well

    • Holiday demand in North America strengthened; OLAPLEX had the “top-performing U.S. hair care brand” status during Black Friday/Cyber Monday at key accounts, with holiday kits selling out ahead of expectations .
    • New product momentum: No. 5 Leave-In Conditioner remained a top SKU at Sephora; OLAPLEX had 4 of 5 best-selling prestige hair care products in 2024 per Circana; regained #1 earned media value in December (Creator IQ) .
    • Execution vs internal plan: promotional intensity was lower than assumed; international results were better than expected relative to the November outlook, lifting Q4 above internal expectations .

  • What Went Wrong

    • Channel headwinds: Professional sales down 27.1% YoY to $31.0M amid deliberate distributor rationalization and softer sell-in; DTC down 2.5% YoY to $40.9M .
    • Margin compression: Adjusted gross margin fell to 68.6% (−200 bps YoY) on promotions and higher warehousing costs; adjusted EBITDA margin fell to 17.4% (−1480 bps YoY) .
    • International weakness: Net sales declined 17.4% internationally (vs +0.3% U.S.), reflecting broad realignment and limited marketing in non-U.S. markets .

Financial Results

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$111.7 $103.9 $119.1 $100.7
Gross Profit Margin %68.7% 69.7% 68.6% 66.3%
Adjusted Gross Margin %70.6% 71.9% 70.8% 68.6%
Adjusted EBITDA ($USD Millions)$36.0 $32.1 $44.6 $17.5
Adjusted EBITDA Margin %32.2% 30.8% 37.5% 17.4%
Diluted EPS (GAAP)$0.02 $0.01 $0.02 $(0.01)
Adjusted Diluted EPS$0.03 $0.03 $0.04 $0.01

Segment breakdown (Q4):

ChannelQ4 2023 ($M)Q4 2024 ($M)YoY Change
Specialty Retail$27.3 (implied)$28.8+5.7%
Professional$42.6 (implied)$31.0−27.1%
Direct-To-Consumer$41.9 (implied)$40.9−2.5%

Geography (Q4):

RegionQ4 2024 YoY
United States+0.3%
International−17.4%

KPIs and balance sheet:

KPIQ2 2024Q3 2024Q4 2024
Cash & Cash Equivalents ($M)$507.9 $538.8 $586.0
Inventory ($M)$100.2 $85.9 $75.2
Long-Term Debt ($M)$646.4 $645.0 $643.7
Advertising & Marketing (Q4, non-payroll)——~$17M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($M)FY2024$405–$415 (updated on Nov 7, 2024) Actual: $422.7 Actual exceeded guidance
Adjusted EBITDA ($M)FY2024$121–$127 Actual: $129.7 Actual exceeded guidance
Adjusted Net Income ($M)FY2024$67–$73 Actual: $75.7 Actual exceeded guidance
Net Sales ($M)FY2025n/a$410–$431 New
Adjusted Gross Margin %FY2025n/a70.5%–71.5% New (near FY2024 71.4%)
Adjusted EBITDA Margin %FY2025n/a20%–22% New (below FY2024 30.7%)
Q1 Sales cadenceFY2025 Q1n/aQ1 below full-year run-rate (qualitative) New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Professional channel strategyStabilization focus; transformation journey Prioritized innovation, PRO community; guidance lowered for FY24 PRO sales −27.1% YoY; “PRO First” strategy, education and community building; Bond Shaper service Strategically refocusing; near-term pressure, medium-term rebuild
International distributor rationalizationNot detailedRealignment to fewer, stronger partners; limited int’l marketing Continued rationalization; methodical country-by-country; better-than-expected Q4 int’l vs outlook Ongoing transition; signs of stabilization vs internal plan
Marketing investment & brand identityReiterated FY24 spend; stabilization Not yet seeing lift; expected promotions New visual identity (launched Feb 25); ~$17M Q4 non-payroll ad/marketing; demand improved in holiday Pivot to brand demand creation; early traction
Product innovation pipelineNo. 5 Leave-In highlighted in H2 focus No. 5 Leave-In strong; PRO Bond Shaper introduced 2025 pipeline starts with Scalp Longevity Treatment; more PRO service; 2–3 launches/year targeted Building cadence; broaden beyond damage repair
Gross margin drivers (promo/warehousing)FY24 adj GM guided 72.5%–73.1% Lower adj GM range (70.9%–71.6%) on promos/warehousing deleverage Q4 adj GM 68.6% (promotions, higher warehousing; partially offset by mix) Margin pressure into Q4; FY25 adj GM guide resilient
Pricing strategyNot discussedNot discussedMoving away from line pricing; balancing competitive set and margin needs Evolving architecture; protects innovation economics
Regional demand trendsU.S. +7.3% YoY Q2; int’l −15.1% U.S. −3.3%; int’l −3.9% in Q3 Q4 U.S. +0.3%; int’l −17.4%; holiday demand strong in NA U.S. stabilizing; int’l mixed during reset

Management Commentary

  • CEO on transformation progress: “2024 was a productive year… we delivered a better than expected holiday season” .
  • CFO on Q4 drivers: “Adjusted gross profit margin… reflected higher promotional activity… gross margin also impacted by higher warehousing costs, partially offset by improved channel mix” .
  • CEO on 2025 vision (“Bonds and Beyond”): positioning OLAPLEX beyond damage repair into foundational hair health; empower PROs; build emotional brand connection, with Euromonitor premium hair care CAGR 6–7% (2024–2028) .
  • CEO on brand refresh: new visual identity launched Feb 25; 360-degree marketing; clear messaging; global rollout .

Q&A Highlights

  • Professional channel competition and approach: focus on back-bar services, education, and community to drive salon visits and loyalty; product-led differentiation (e.g., Bond Shaper Treatment) .
  • International distribution: methodical shift to fewer, stronger partners; optimism on long-term global opportunity; 2025 moderated by international transformation; North America to lead .
  • Marketing ROI timing: “brand building takes time”; aggressive U.S. investment in 2025; optimizing through measurement systems; longer-term margin and % of sales to be discussed after learnings .
  • Pricing architecture: moving away from single line pricing to balance competitive positioning and margin protection for innovation; current market pricing reflects plan .
  • Product cadence: targeting ~2–3 launches/year; 2025 begins with scalp innovation plus PRO service; emphasis on reinvigorating core (e.g., pairing Scalp Longevity with No. 3 Hair Perfector) .

Estimates Context

  • We attempted to retrieve Wall Street consensus estimates from S&P Global (Primary EPS Consensus Mean, Revenue Consensus Mean), but the request was blocked due to a daily limit, so consensus data was unavailable for this report. As a result, we cannot quantify beats/misses versus Street for Q4 2024; management noted results ahead of its November internal expectations .
  • Where relevant, FY2024 actuals exceeded the Company’s updated guidance ranges from November (net sales, adjusted EBITDA, adjusted net income), suggesting internal upside into year-end .

Key Takeaways for Investors

  • Q4 results showed stabilization in North America and lower-than-expected promotional intensity; however, margin compression and Professional channel weakness continue to weigh on profitability near-term .
  • FY2024 outperformed the lowered guidance, indicating better execution through holiday; watch whether early demand signals persist as the brand refresh scales .
  • FY2025 is an investment year: expect EBITDA margin to trough to 20–22% on brand and talent spend even as adjusted gross margin remains healthy (70.5–71.5%); near-term valuation may compress on margin guide despite medium-term growth narrative .
  • Product pipeline broadens addressable market (scalp health, PRO services) and leverages OLAPLEX’s bond technology; monitor sell-through of Scalp Longevity Treatment and incremental halo on hero SKUs (e.g., No. 3) .
  • International reset is key swing factor: cadence of distributor transitions and localized go-to-market will drive recovery; North America expected to lead in 2025 .
  • Pricing architecture evolution should support innovation economics and margins; track consumer and PRO reception and any mix effects .
  • Near-term trading: sensitivity to brand demand metrics (holiday momentum carry-over, U.S. campaigns), margin progression vs guidance, and cadence of new launches; medium-term thesis hinges on brand repositioning success, PRO execution, and int’l rebuild .