Olaplex reveals growth strategy as sales continue to fall

Olaplex has reported a decrease in net sales for the fourth quarter and full year ending 31 December 2023, whilst revealing plans to return the haircare company to growth. 

Fourth Quarter

Net sales dropped 14.5% to £88.4 million ($111.7 million), reflecting a decline of 27.9% in the US and 0.7% internationally.

For Q4, Olaplex shared the following results:

• Professional sales down 22.7% to £33.6 million ($42.5 million).
• Specialty Retail sales down 16.3% to £21.5 million ($27.3 million).
• Direct-to-Consumer sales down 2.8% to £33.2 million ($42 million).
• Net income decreased 58.1% to £11.1 million ($14.1 million).

Full Year

Net sales dropped 34.9% to £362.8 million ($458.3 million), reflecting a decline of 47.8% in the US and 18.3% internationally.

For FY23, Olaplex shared the following results:

• Professional sales down 40.1% to £142.4 million ($180.1 million).
• Specialty Retail sales down 42.6% to £106.8 million ($135.1 million).
• Direct-to-Consumer sales down 15% to £113.1 million ($143.1 million).
• Net income decreased 74.8% to £48.6 million ($61.5 million).

Looking ahead, the company expects net sales in the range of £72-76 million ($92-97 million) for the three months ending 31 March 2024.

Amanda Baldwin, CEO of Olaplex, said: "Our financial results were in line with our expectations and represent another positive step towards stabilising our demand trend. I am confident in the strong foundation of the Olaplex brand and believe that our priorities for the year ahead will position the company to return to consistent sales and profit growth."

Highlighting the company’s "challenging" 18 months, Baldwin also shared the reasons behind the slowdown during an earnings call.

"I believe the headwinds were the result of the business growing too quickly, suffering from execution errors, and not appropriately investing in the resources needed to best support the professional stylist community, develop the right capabilities in brand marketing, and prepare for the reality that often happens to a category creator increasing competition," she said.

During the call, Baldwin revealed the brand’s growth strategy for the year ahead. This includes a greater focus on its professional stylist channel as it looks to "bring Olaplex back to the forefront of product innovation and earn true brand love by elevating its product development and marketing capabilities across all markets".

It also intends to focus on the brand's existing customers and strengthen core products and current channels of distribution while "limiting new distribution this year and combating the diversion of products by closing some accounts where we find evidence that distributors were the source of diverted product".

To build on its "strong corporate culture", the company is also planning to bring its team together in person more frequently to "facilitate even better collaboration".