Olaplex’s Q1 2023 Net Sales Decline 38.9%

For the first quarter of 2023 compared to the Q1 2022, Olaplex Holdings’s net sales fell 38.9% to  $113.8 million.

President and CEO JuE Wong says she remains confident that “the company can return to consistent and sustained sales growth.”

“Our first quarter results were in line with our expectations and we made progress on the priority actions for our reset year,” Wong said in a statement released with the company’s quarterly data.  “We delivered high impact innovation and made important investments in sales, marketing and education that are expected to strengthen our business and extend our leadership in the prestige hair care category. While we recognize that we are in the early stages of this plan achieving its intended results, we remain confident that our competitive differentiators and the execution of our priorities will enable Olaplex to return to consistent and sustained sales growth at continued top-tier profitability in the future.”

Sales by Channel

Olaplex reported that professional net sales were $48.4 million, down 37.2%; specialty retail was $34.9 million, down 45.8%; direct-to-consumer was $30.5 million, down 31.9%. Net sales decreased 60.3% in the US and increased 0.1% internationally.

Net income decreased 66.2% and adjusted net income decreased 65.7%.

The company believes that the first quarter was impacted primarily by three factors—a lower baseline level of demand for core products in the first quarter of 2023; a negative year over year impact from inventory rebalancing at certain professional and specialty retail customers, which lowered net sales for the first quarter of 2023 by approximately $21 million; and first quarter 2022 results that included approximately $10 million in net sales attributable to inventory pipeline sold to a key specialty retailer in which similar inventory pipeline sales did not occur in the first quarter of 2023.

2023: A 'Reset Year'

Olaplex said it expects 2023 to be a “reset year” in which it increases investments to support future growth, and has not changed guidance for net sales, adjusted net income and adjusted EBITDA for fiscal year 2023, as initially disclosed on February 28, 2023.