Olaplex Reports 1.9% Decline in Q1 2025 Net Sales to $96.98 Million

Olaplex Holdings, Inc. reported a decline in financial performance for the first quarter of 2025, with net sales totaling $96.98 million, a decrease of 1.9% from $98.91 million in the same period of 2024. The company's gross profit also fell to $67.36 million, down from $71.34 million, resulting in a gross profit margin of 69.5%, compared to 72.1% in the prior year. The decrease in revenue was attributed to lower consumer demand, although new product launches and an increase in U.S. sales partially offset this decline. The company’s operating income dropped significantly to $8.48 million from $19.62 million year-over-year, while net income fell to $0.47 million from $7.75 million.

In terms of operational metrics, Olaplex's sales channels showed mixed results. Sales through the professional channel decreased by 10.9% to $34.54 million, while specialty retail sales increased by 12% to $38.55 million. Direct-to-consumer sales also saw a decline of 7.2%, totaling $23.89 million. Geographically, U.S. sales rose slightly to $49.16 million, while international sales decreased to $47.82 million. The company’s inventory increased to $79.18 million from $75.17 million, reflecting a strategic decision to manage stock levels amid fluctuating demand.

Olaplex's operating expenses rose to $58.88 million, up from $51.73 million, primarily driven by increased marketing and legal costs. Selling, general, and administrative expenses surged by 18.7% to $47.99 million, reflecting a $4.8 million increase in advertising and marketing expenses. The company also reported a higher effective tax rate of 47.2% for the quarter, compared to 25.3% in the previous year, largely due to discrete tax expenses related to prior year estimates and the vesting of stock options.

Looking ahead, Olaplex is focused on enhancing its brand demand through strategic marketing initiatives and product innovation. The company aims to leverage its established presence in the professional beauty industry while expanding its product offerings to meet evolving consumer preferences. Despite the current challenges, Olaplex maintains a strong liquidity position with $580.9 million in cash and cash equivalents and an additional $150 million available under its revolving credit facility. The company anticipates that its cash flow from operations will be sufficient to meet its operational needs, although it remains vigilant regarding market conditions and consumer demand trends.