Olaplex, a popular hair care brand known for its innovative products that repair and strengthen hair, showed signs of recovery in the second quarter of the year. Despite facing challenges in its direct-to-consumer business, the company saw strong sales from specialty retailers such as Sephora, which helped offset some of the losses. However, overall sales still dropped by 4.8 percent to $103.9 million, marking the sixth consecutive quarter of declines.
Specialty retail sales were a bright spot for Olaplex in the second quarter, jumping by 22.4 percent. This increase was a positive sign for the company, indicating that its products were still in demand and resonating with consumers. On the other hand, direct-to-consumer sales fell by 18.4 percent, highlighting an area where Olaplex needed to focus on improving.
The company’s stock initially dropped by 8 percent when the results were announced, reflecting investor concerns about the continued decline in sales. However, the stock rallied after the earnings call, where Chief Executive Amanda Baldwin reassured stakeholders that the company was on track to meet its full-year fiscal guidance of 1 percent sales growth at the top end.
When Baldwin took over as CEO in 2023, Olaplex was facing challenges such as increased competition and a loss of brand equity. One of her top priorities has been to regrow the company’s professional stylist channel, which historically played a crucial role in advocating for the brand and converting consumers. As Olaplex expanded its presence in DTC and specialty retail, the bond with professional stylists weakened, leading to a decline in sales.
During the last quarter, Olaplex increased its marketing and advertising spend by 33 percent, focusing on promoting its No.7 oil range. The company also continued to close down suspect distribution agreements and retailers to reduce the availability of products on unauthorized platforms like TikTok Shop. Additionally, new products for curly hair are set to launch, as Baldwin remains confident that the company is gaining momentum and that professional stylists will be key to its recovery.
In a call with analysts and investors, Baldwin emphasized the importance of professional stylists, describing them as a priority audience for Olaplex. She acknowledged that the company would not be where it is without their support and advocacy. Moving forward, Olaplex is committed to strengthening its relationship with stylists and leveraging their influence to drive sales and brand loyalty.
Overall, Olaplex’s journey to recovery is ongoing, with the company implementing strategic initiatives to address its challenges and capitalize on its strengths. By focusing on key areas such as professional stylist partnerships, marketing efforts, and product innovation, Olaplex aims to regain its position as a leading player in the hair care industry.