Olaplex showed signs of recovery with strong sales from Sephora and other stores in the second quarter, but those gains didn’t make up for a continued slide in its direct-to-consumer business.
Specialty retail sales jumped 22.4 percent in the quarter, the company said Tuesday. However, DTC sales fell by 18.4 percent. Overall sales dropped 4.8 percent to $103.9 million, the sixth consecutive quarter of declines.
The company’s stock dropped 8 percent when the results were announced, but rallied after the earnings call. Chief executive Amanda Baldwin, who joined the hair care company in December from sunscreen line Supergoop, said the company was reiterating its full-year fiscal guidance of sales growth of 1 percent at the top end.
When Baldwin joined the company in 2023, it was facing numerous headwinds, including increased competition and a loss of brand equity.
On a call with analysts and investors, Baldwin restated that her top priorities include regrowing its professional stylist channel, a segment that had historically advocated for the brand and converted consumers. As the brand grew its DTC and specialty retail presence, and competitors such as K18 moved in to court stylists, that professional bond was weakened.
On the call, Baldwin said during the last quarter, the company had increased its marketing and advertising spend by 33 percent, up to $16 million, with a particular focus on its No.7 oil range. She also said that the company was continuing to close down suspect distribution agreements and retailers as it looks to reduce the availability of products on unauthorised platforms such as TikTok Shop. New products for curly hair are slated to launch, and Baldwin maintains that the company is gaining the necessary momentum, and that professional stylists will be key to that recovery.
”We certainly would be nowhere without [them],” said Baldwin, describing them as a priority audience.
Sign up to The Business of Beauty newsletter, your complimentary, must-read source for the day’s most important beauty and wellness news and analysis.
Learn more:
Olaplex Embarks on Turnaround Plan After Rough 2023
Reporting a double-digit sales decline in its fourth-quarter earnings, Olaplex’s new CEO outlined the company’s comeback strategy.
