Olaplex revises FY22 guidance after 'sales slowdown'
Olaplex has released its unaudited net sales estimates for the third quarter ending 30 September 2022 and revised its FY22 guidance following a "slowdown" in sales momentum.
The company's updated guidance for FY22 includes:
- Net sales up 18% to £629-635 million ($704-$711 million).
- Adjusted net income up 11% to £270-274 million ($303-307 million).
- Adjusted EDITDA up 5% to £379-385 million ($425-431 million).
However, Olaplex expects its professional retail sales to decline by 4%, speciality retail by 36% and direct-to-consumer by 19%. Along with a 21% drop in US sales and 19% drop in International sales.
The company's updated guidance primarily reflects a slowdown in sales momentum that it attributes to macro-economic pressures, increased competitive activity and a moderation in new customer acquisition, as well as inventory rebalancing across certain customers which the company believes are in response to these same macro-economic pressures.
On an unaudited basis, Olaplex also expects the following Q3 results:
- Net sales up 9.2% to £157.7 million ($176.5 million).
- Professional sales to decline 16%.
- Specialty Retail sales to increase 60%.
- DTC sales to decline 3%.
- US sales to decline 4%.
- International to increase 28%.
- Net income between £52-54 million ($59 -61 million).
- Adjusted EBITDA between £89-91 million ($100-$102 million).
- Gross margin between 72.5% to 73.7%.
JuE Wong, President and CEO of Olaplex, said: “We are disappointed to lower our fiscal 2022 guidance. As an agile business, we have already identified and put actions in place to accelerate demand.
"We remain focused on executing our long-term growth strategy and are confident that our competitive advantages have us well positioned to navigate during this dynamic period and to be powerfully positioned in the future. Overall, we continue to expect fiscal 2022 to represent another significant year of strong growth, profitability and cash generation.”
Olaplex expects to report its results for the third quarter and first nine months of FY22 on 9 November 2022.
Read TheIndustry.beauty's interview with the President and CEO of Olaplex, JuE Wong.