Olaplex Saw Sales Slip 35% in 2023
The hair care brand said it expects sales to be slightly down to flat for 2024.
Olaplex’s sales continued to decline through the fourth quarter of 2023, in line with the company's expectations.
Net sales for the fourth quarter declined 14.5 percent to $111.7 million.
For the full year, sales slipped 34.9 percent to $458.3 million. That fell in line with the company's guidance for sales between $450 million and $460 million for the year.
The professional channel slipped the most during the quarter, falling
22.7 percent to $42.5 million. Directto-consumer waned 2.8 percent to $42 million; specialty retail dropped 16.3 percent to $27.3 million.
Net income dropped 58.1 percent and adjusted net income also decreased 53.9 percent. The company is targeting between $435 million and $463 million in net sales for 2024.
Share prices dipped 8.3 percent to
$1.77 in morning trading.
On a call with Wall Street analysts, executives outlined a new strategy focused on innovation and tightening distribution.
“Olaplex had five of the top six bestselling prestige hair products in 2023, per Circana's retail tracking data of the U.S. market,” said Amanda Baldwin, the company's newly minted chief executive officer, on a call with Wall Street analysts on Thursday. “Our goal is to strike the appropriate balance as we prioritize our marketing efforts behind our core bestselling products while also investing in our new product introductions to ensure successful launches.”
Those launches will follow a similar pace to years past, according to Eric Tiziani, Olaplex's chief financial officer.
“We anticipate incremental sales contribution from new product launches this year, but expect the contribution from new products in 2024 to be lower than in 2023 given the timing of key launches starting later this year,” said Tiziani. “We are continuing with our recent cadence of two to four launches per year. Second, on the distribution front, we're taking several actions that are focused on our long-term success but have a negative short-term impact.”
“We've decided to constrain opening up new accounts in 2024 as we focus on improving awareness and penetration in our current key customers,” he continued. “We plan to rationalize certain distributors and accounts that do not build brand equity either due to offstrategy pricing for sub-distribution into authorized resellers.”