OLPX - Earnings call transcript Q3 2021

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Operator

Good day ladies and gentlemen, and welcome to Olaplex Inc.'s Third Quarter Earnings Conference Call. At this time all participant lines are in a listen-only mode. [Operator Instructions].

As a reminder, this conference call is being recorded. [Operator Instructions]. to conference like Malkin to now ICR. of would hand over the Allison I ahead. go Please

Allison Malkin

Executive and you, year me Wong, Chief call. fiscal the XXXX With Eric Chief Financial JuE Officer. are Thank today to earnings welcome Olaplex and Tiziani, Officer third quarter

and JuE will strategy, provide performance regarding company's our today’s additional mission call review and Olaplex’s performance. financial company's XXXX. begin details will For third outlook introduce the quarter with of and highlight Eric for the Then the

remarks, will JuE operator call take prepared the these for Following have the the and to open questions you today. Eric

I like cause of earnings and/or actual subject by today. from Each including start, statements we could referenced business you to Before forward-looking, those materially projected certain release issued risk outlook the matters would company's Olaplex that make management the is will that about are statements. results forward-looking and remind uncertainties which implied differ and statements to other to in such

a should discuss results with considered call can the appears heading The will of to with at isolation the revise statements believes measures and on prepared not Exchange factors any filings or in relations management on evaluating and makes accordance no in as it non-GAAP these Release of which the investor regarding that speak website of update are that for company's as Commission this under GAAP. Also call section in The the of Earnings company's the obligation regarding we information in statements. during original and be Cautionary presentation forward-looking Securities ir.olaplex.com. in company's useful or only date the this www.sec.gov undertake call financial Additional company's the statements at Non-GAAP substitute be available these Note this and forward-looking of performance. management certain measures, the

the non-GAAP most information A ir.olaplex.com. now company's company's at You comparable Investor GAAP regarding will the call of the in turn Relations the section this also to Wong. these the measures directly to call of JuE of live is these broadcast on will the financial non-GAAP and over additional earnings I measure, find available reconciliation website release.

JuE Wong

and you, public And I you am an quarter offering. share important also our to quarter and today to morning third delighted speak Alison strong Thank completed the company we our milestone everyone. initial our good performance. marked as for

home a we hair XX% person We Before results continue visible in that deliver why successful? we those to Studies discuss hair application. Why been industry? new over for me Olaplex healthy, with protected the and Olaplex, use disruptors mandate from with direct-to-consumer. every protected technology very shine, and that products and the hydration, highlight technology, have consumers believe product products, women purchase bounce, believe we our beautiful see and of first frizz, been with our effective company an for We have in Olaplex repaired, products, least our were results, to proven take looking and will strengthen haircare daily, have We purchased to will to we that where all types to advantages. be professional believe let last body successful half XX application. first and we unique at something months. and beauty very believe specialty categories suite three are is have by other is sold global And to from With who product channels; three driven our have first compete. stylists, have product We because Olaplex who healthier diverse has the from results. performance deliver patent science XX and our hair do is eight but of in because for professional, which we able in protected consumers one and shown use hair. to positioned beauty commitment consumers their stronger, are are visible damage patent use exclusively competitive hair deserves consistent on their to believe three regular deliver the key our we less founded average I are Today enable is? of retail innovative Olaplex more

under products We are a innovation, pipeline on strong focused with development. of

we our in around what We world. protection patent have patent sell, numerous in to but we in These now the portfolio and future. not sell the cover what over XXX countries expect patents also patents only

of supported by our are private We on stylists over a group. community professional highly XXX,XXX engaged Facebook

partners alone with community committed trade base, social haircare makes followers Instagram us growing number on X.X and one which media. comprised of we prestige consumer our the loyal brand believe million Our

the mix channel mutually and We strong in each professional, have a is respectively. direct-to-consumer, third and XX% XX%, where of experienced quarter omnichannel synergistic XXX% growth reinforcing and all across retail

is of XXXX market. business Our sales a year operate months September large XXXX. the for nine U.S. XX, fiscal more in in with XX% outside ended We growing a addressable global the with than and category

segment. global TAM, for euromonitor, within the addressable and total haircare market is that prestige haircare Our the fastest is billion $XX growing

at our positions to care our strong TAM. Olaplex in have addition skin has this of technologies best margins consistent we amongst believe hair, industry. billion which all of We in patents for the believe robust are growth we that In $XXX applications for

direct-to-consumer. quarter of comes strength very in strong our sales regiment the based our This to Olaplex growth last third XX%, Now professional rose turning broad quarter top Net third by omnichannel growth a retail, distribution; on already from year. to driven across to of our results. specialty to

of and quarter rose XX.X%. XX.X%, this with EBITDA XXXX, including third million, adjusted Our profit of margin income adjusted $XX.X strong increasing margins profit gross of to to XX.X% remain adjusted deliver net in XX.X% margin XX.X% EBITDA gross margin an adjusted of

which future margin Eric EBITDA will support review third adjusted year's quarter shortly. growth, detail to Our in includes in more this investments

with our our across new addition, professional, progress from product In growth innovation growth initiatives productivity, was specialty increased productivity retail new in sales growth by expansion. and and direct-to-consumer international and channels. led the distribution quarter existing Sales included distribution increased against

three new highly two professional first we the home launched In our Shampoo. to for and third take launched year; channel. exclusive XP, one have Toning quarter incremental this the products We use

We highlight, excited about our product strands. are to neutralize technology hydrate, this and very which for and uses blonds, soften platinum strengthen, exclusive brighter multi-patented brassiness grays

Sephora’s with of am success all our contributed bond this quarter, Salon passionate the extremely entered team half treatment, designed of expanded to XXX In our space increase October. locations of our into that and their well just benefit quarter shelf feet our Bond Olaplex benefited Nº.X number body new of of in builder smooth and Olaplex PRO-Rx our X-in-X we Mask. sales to the proud location Overall, in and Intense as XX and Mask, services. majority the hair, continue treatment also with is minutes. an end adding with stakeholders. ULTA Moisture first Sephora Coles in of of part through October, to our professional positioned Third first quarter. in was And rollout And introduction are for dedicated adding backbar Intense a exclusive I professional salon reparative believe U.S. shine strong Olaplex while from the distribution linear performance the in square fixed We we as three offering, the Moisture from moisturize

to excited incremental now, continue detail. non-cannibalizing ahead, new we products users turn innovation supported robust in problems. results about pipeline the would term. And I Olaplex As like our to more the our believe by we expand launch business of financial focused prospects to call to momentum is over look near base that in positive real-consumer long our guidance and globally we a to Eric solving expect can and loyal remain and and on review continue We our

Eric Tiziani

begin speak JuE Thanks everyone. to and business, excited with year move to I'm all good you outlook an third of then our morning our results with our XXXX. finally I'll for full I'll overview and introduce quarter today.

deliver the has thrilled financial passionate top an of by platform story disruptive metrics, space to grow be and on provides core see profitability white to category believe a We model. We business a sales substantial with start which and earnings of outstanding that our growth. a with I'm within behalf sustainable geographies. us our profile, Olaplex me competitive strategy term saying long Let to our and advantages part Olaplex that haircare deep team. of telling from tier channels Olaplex across

results. figures in increased the our during Pertaining most find release, SEC any to third million third which earnings turning form furnished you year. the for was the our Now million today. with last on reconciliation GAAP results, XX% quarter from also Net on $XXX.X to adjusted sales quarter tables of can to X-K comparable $XX.X to the remarks

inventory Adjusted due XXXX. increase in to XXXX of addition the decline new current the to in in $XX.X quarter. profit This January forward build increase a higher third for of adjustment including channels in profit and million due XXX and third across also strong support an primarily XXXX professional mix. XXXX gross million product in $XX.X growth acquisition prior were appropriate XX.X% from Gross million period basis $XX to with XX.X% quarter. XXX.X% XX% to velocity and million the to the input XX.X% value points happy Gross margin successful basis profit product this increase distribution gross products, rose supply the $XXX.X million. quarter. was $XXX.X increase to $XX.X sales related the the which mentioned, some increased the quarter, retail margin from margin $XX.X particularly the to Adjusted customers. to million lapping to inbound in to direct-to-consumer enabled XXX% us in fair launches, The Olaplex to expanded JuE was We're by of of As XX.X%. existing third the XX% was versus business million primarily XXX our driven the environment in increased one-time The resilience in specialty chain profit looking and costs, and year was deliver point growth inventory in demand.

to Our non-capitalizable million, quarter per assets. primarily transaction third million to This quarter. compared $X.X to improvement of and the the fulfillment quarter. diluted $X.X IPO business in more profit operating $X.XX was was IPO. of driven and other cost gross million growth. strategic EBITDA to expenses in third than of share, connection the XXXX sales amortization The with consist third share $XX.X million our compared which XXXX million in $XX.X of expense, million volume intangible corporate of third net in increase other adjusted XXXX and SG&A the income. effect by million by a distribution to million $X.X related $XX.X leading in Adjusted SG&A $XXX.X in further to the million expansion our and relating stock higher million sales $X.X per grew of third $X.X expense, backs Strong sales offset payroll This costs expenses cash was XX.X% quarter increase million driven marketing EBITDA or million are expense, reorganization compensation for $X.X $X.X to $X.XX of adjusted and quarter. $X.X XXXX affected in in comp income in gives and from force, settled $XX.X in and and in the which or work unit for general in add the net increase adjusted increases million adjusted EBITDA to diluted expenses

in sales marketing the and IPO higher related compared increase basis expense, SG&A year-over-year Our sales point our expressed of other third and increase points, and margin EBITDA of a last adjusted XX.X% the in basis EBITDA year an strategic quarter, XXX investment for payroll G&A margin percentage included as of adjusted a in XXX costs. excluding XX.X%, This reflects which to sales. transition and support to increased was

the for awards pull four of triggered is of for third In vesting non-executive sales particular negatively the settled into majority XXX expressed of period was approximately employees quarter sizing the of units’ a EBITDA cash as points which one this addition, of pricing up year impacted year one-time compensation trench to forward an and by a for in IPO. QX, adjusted incremental the basis this percentage expense. by The was due

sheet. the balance to Turning

million. As of third million quarter. quarter Inventory had cash term the million September end XX, XXXX of compared fiscal and debt end of long cash XXXX to at the $XX.X $XXX.X equivalents at million the the balance at was $XXX.X $XX.X and our we of stood

meet We demand. of our end, is composition at to well quarter inventory are the pleased positioned with which

by XX, Regarding the primarily net partially $XXX.X for income net the XXXX. to cash cash by September flow capital. activities September add was driven statement, This XX, we in working nine by amortization months provided for nine of million the XXXX back, ended had ended investments and $XX.X operating months offset compared million the

slightly and the equipment million, of period purchase internal asset for reflecting model. use like software $X our was our primarily for business property Additionally, under

Now to outlook. your

$XXX XXXX, net year million of the million in midpoint, range year the growth range, versus $XXX $XXX EBITDA expect year or based full adjusted to income full growth on finally the versus sales this in For to growth XXXX versus $XXX $XXX in net fiscal year million midpoint Based we of XXXX. based full is plus on $XXX of a plus on the the midpoint XXX% XXXX. range XX% and to million. million this or of range the XXX% Adjusted million

our we which model We year pleased believe working, positive have quarter to full GAAP with the currently and and outlook. our effort with provide summer, the of business opportunities. have the our now to turn questions. adjusted is plans and outlook does data new the Operator. accurately XXXX the continue strong in remarks distribution and guidance reflected our to and most that variables the individual and that in measure us such advantages EBITDA directly to call in We results. to for reconciliation not we disruptive concludes GAAP momentum comparable business, comparable for able the our the year unreasonable for in This progress net adjustments, years without would reporting to look back are results income third our to most company very will are that and prepared competitive included poised directly mind deep full Our forward over the measure, reconciliations. we quarters In reflects be our of not XXXX come. delivering growth, sufficient necessary Keep operator the estimate with adjusted because a both is for existing our

Operator

first Thank Piper Sandler. [Operator you. Our Instructions] Murphy from with the line comes question of Erinn

is line now Your open.

Erinn Murphy

morning of the Would could a some quarter more of the that’s JuE Eric. good compared the share launch and for first of to love a your bit how Thank product. the Great! seems at of your My then over gate. do product you, checks. channel of have follow detail incredible least our out the just you company, if history former from for I little and first congratulations question is XP on on launches up It

JuE Wong

gray that, ingredients brassiness a with have, people highlight to able have hydrate getting we as well Bis-amino, a not but our to for with Yes, Erinn be is that that their to we with because we are with Yeah, In tends the situation. said, of Toning able are our thank blonds, who as case also we hair been natural Blond repair shampoo hair. to you as only moisturizing XP’s, Shampoo only first most the which have technology, drying proper the received, brighten the the lot of kind are and we has any question. our the to in toning shampoo and patents very our well

say and a just that it very something currently about the product that is market. as not successful, are is I lot of customers exist does nature in of comparison, professionally very So a a looking this much the honed very it is that definitely retail for in, would

with this we So happy very performance. been have

Erinn Murphy

guess Great Eric. my for I is to then hear. follow-up And

guidance, quarter. the $XXX imply versus think is $XXX I'm midpoint I of third implied about quarter On why down fourth guess in kind it quarter, curious sales million implied was at the it it I million the would and

that quarter? anything so JuE Thanks Just there for on just you about, much. that the holiday. sequential implying fourth mid-point with are given talked the at everything deceleration XP else the Is

Eric Tiziani

Yeah, Erinn. thank you

to don't our and of we see QX traditionally up is one QX particularly so sell some, QX. bit is, end while seasonality for through the quarter seen are than ready lot and a in the a And QX. get ready so that and we’ve seasonality see there but that's higher over do material have we professional years we see So we thing the the in absolute year holiday business, buying we tend in channel, the to one for the in QX kits in and holidays, of that that terms that’s reasons a to sold QX between inventory of third also stylist sales the get in

All of you feel we've know the that said, we momentum reflected we QX a strong confident, in good quarter. our about and it's think guidance

Erinn Murphy

much. so you Thank Great!

Operator

Mohsenian Morgan comes question Dara of from Stanley. next Our with a line

open. now is line Your

Dara Mohsenian

Hey, good morning guys.

increasing as better customers the How there while year-over-year we of expect other the underlying however out a a the some biggest by year-over-year. just as a you basis? you at years. longer factors number look much channel. normalized COVID opportunities term, break was longer looking perspective much years results next want look a the perspective also growth growth revenue in about it you than more sort of So, key on on from salons, term Obviously on driven environment professional from in pretty side are subject, Can discuss drivers And you over the over few are out, of maybe salons, professional can that more here next the the we the just revenue quarter. Is of etc., that strong within sustainable. versus talk the it to you few here

JuE Wong

I’ll question Eric, the you the of let outlook cover if Eric more numbers. take the and some on want I'll specific

United Olaplex stylists happening above the look what in levels. can now for of and is pre-COVID at with States, If the are number you us salons

markets professional conduct business they their growth both repeat seeing open, are our outside that runway mandate, our in significant limitations and end of to ability customers, professional experience still still new the as the and of but all continue social are channel it the distancing, believe going some and with in seeing are as channel. are U.S. to professional We of in well vaccine because opportunities growth we to the we while at with

where the I'll hopefully So Eric on question this see answers to your we professional ourselves on turn side. over on expansion. that revenue the

Eric Tiziani

based. professional Dara. is had so and third Yeah, say all JuE, a Thanks in our I hi did, of quarter strong broad think must it channels the We quarter.

as So momentum was broad of XP. the as core sold was continued X-in-X It as channels. exclusive that the also, within programming We professional new also to portfolio quarter professional thought really and across third being in three based launch the in And quarter which across the do launch just well portfolio momentum for our well channels, awareness holiday in the we that's across support in building. really geographies. broad is the across based second it’s our in the launched, products but all

Dara Mohsenian

Great! That's in one in the follow-up very specialty growth, just strong helpful, retail. Obviously and quarter. also

far bit expand retail U.S. on So side. limited, partner in in Can the your you you where opportunity additional little the over U.S. specialty years talk about footprint Thanks. the fairly the versus here; door retail stand partners term particularly potential longer next the the a is obviously today to to couple

JuE Wong

Thanks the Dara for question.

we see, very are on can focused you As distribution. our current

standalone If a resourced of penetration Sephora while runway, you our you are look successful brand still at we lot has publicly will our see at documentation, footprint, even our at Sephora. very from that

our we treatment, the ULTA have seen into as well in also entered with our have XXX as that we professional doors with Coles standalone recently October through October Salon expanded into and We offering.

we core I that a perform core in in monitor are couple those that we opportunity us to you of that what articulated and we that new our grow. still believe we we can we going areas, and how to continue our have, of just for if to our to focus continue to we continue distribution distribution exciting lot runway believe has in have we opportunities think Ultimately those footprint the deliver. sales is for a performance will is for I So deliver

Dara Mohsenian

Great! Thanks guys.

Operator

comes Our question line Jason with Goldman English of the from next Sachs.

now open. is line Your

Jason English

question me the morning of point quarter in. a out to on on distribution. there Congrats on successful I folks. finer for put slotting a a Dara’s want IPO Thanks Good and gates. slightly Hey! strong

products back that start to us describe on And an the you've that's met so of update at bar going or mentioned milestones for maybe gone you give criteria you Can salons, need You to be to end Alter. into the on the can the sell you your some the store front how far? of there.

JuE Wong

question. the for Jason Thanks

first take your me let So of part question. your

as monitor We products actually we the professional because high, to going as add actually how we ULTA track that how had at at the many and women the are tremendously because success. more visit grow to offering number color service it are continue Olaplex service choose our opportunity know are our to well salon them key is to doing ULTA, track that going going and is the metric awareness their to of how we’re to to customer ULTA as of services, for a

care the of able to we X that brand an then offering know growth. when for we are we you our else that on hair And to to up brands in specialty we for with well building, marketing, partners, in terms we go as the what one mentioned, brand much going beauty so retail, expansion As anchor core really of brands distribution anchor as accounts are top any into partner really we brand them. just want are number become the be so of have to of as I've

considerations in our are key for players. those partnership with our growth us existing So

Jason English

prepared also you that you to you've portfolio, That's your on and then helpful, about today, not but specifically out went sell you distribution mentioned in And only future talking just sell Skin you. what remarks you thank in call Care. could covering got expansion, what the you to shifting patents from but

launch into a Care. going I foreshadowing as think Skin most listeners that you are interpret us

So (b) a so, interpretation, when and if reasonable a is (a) look like? what and question, two-part that it two questions or would

JuE Wong

question. for Jason Again, thank the you

reiterating is I have previously just that think doing were we shared. we were what we what

with said, care I Olaplex skin the them in care science care actually we of an skin data we we Olaplex to with transformation for promising. familiar unseen, applications as independent saw guys agencies lead XX% patent Olaplex have call, skin such have see We you play as people look do with my XX% technology. and want our to being product see a agency and because sight switch really an from We did and very team permission through will of skin to basically care. a you to study say

we we So have the know permission play, have to permission a we win. to

to give will at there, is not and get options. about I you when to giving definitive at be As we this anything able in all time will exploring ourselves this time.

Jason English

Got it. Great states though. I'll on. Thanks for pass sharing it those.

Operator

question Our Andrea with next comes from line Teixeira Morgan. JP of the

is line open. Your now

Andrea Teixeira

Thank time hair first My on would looking XP allow congrats you. Good and for in availability. you potentially away? that waiting right your to on performance, was again. that XP closely. needs that Salon And the for It infused you have decision on innovation you prevents morning in or ULTA for you way ULTA clarification success comments table launch, exclusivity to that, And and a be I question more that think if see curious Bis-amino. go lapped to is the including par the with to do probably is that there dye just and or launch paves potential of to are with to to go at into any you for that any retails that other order the Sephora is you then anything do and

JuE Wong

help it will because clarify. you the thank question, Again, us much for so

as how we look our of will a the is, to average that consumer and the most for what development foremost, we haul, year, are delivering product an three and first that's two launching XXXX up data meaning way and opportunities well when our have consumers surf in So platform to sight driven insights of in clear is really as at R&D need. for working us all guidance of on at appropriate we continue really we products through line market. what product long the analytics, look we the studies, a way ourselves, work trend our and Because a want

of innings we terms in early Secondly in ULTA. ULTA, are with

seen, the offering October. you’ve with them just we’ve If entered in salon

monitor COO is our we very, We keeping our to has and our by she the very from led very really is Warden of doing Tiffany will to indications continue Early team pulse strength. sales well who close it. are been

exclusivity, Sephora, you now have in we are in Mercury, are As are ULTA in we we to seen, Salon. Blue

double these to brand, top XX we of down really So retailers, will one the continue we on with be beauty so continue all them. partner that anchor the number an being brand can to haircare with

Andrea Teixeira

Thank you.

Operator

Our question Raymond of James. Tong next the from Olivia comes line with

Your line is now open.

Olivia Tong

in Great, on thank the you. the quarter. Congrats IPO

The first obviously incredibly are the is consumers further like recognition, sounds increasing your it brand with products. because question around satisfied

consumer season we’ve program which brand Can So holiday you're holiday about through obviously potentially either base? seen beyond or that talk other builder. the you. a great you that at the helps trial Thank Sephora looks the doing, like things build the recognition and

JuE Wong

the for Olivia question. Thanks

take first note really shown and growth is, comes to what is truth. from very where recommendations professional when brand their focused hairstylists. for builds building they and sources want to long three we I that us term there to hair have is of think and on important especially are studies awareness, foremost, When it what are marketing

So our to that will be focus. community building continue

social source that two with marketing, which optimization. that are So media and of word one, in search the two area, our digital that whether with reviews means media of performance said, or via is truth the is and number our connection mouth space through we engagement, the it's engine number already product which third conversion

online customers. continue that, convert be our this of all doing, partner strategic, but engage are branding and tools as that we driving to And just in continue connect, is would will not partnership well the interactive as organic we if We to more only what marketing because and offline do lot to these and our we a the build retailers with with. traffic awareness both

Olivia Tong

but I’m not as too clearly the here, we into impressive. into QX sort myself then And ahead comps hopefully getting are that's Great, helpful. year, cycle of half of quite next first

quarters could stimulus thinking be terms anything up year, next lap in comps, just that the if have concerned pent else may to of those be that. about color give about, a as like base whether an the in we little So impact or anything of demand, there bit you was you had

think through, you Thank to numbers some start next growth, comp as big to you. pretty trying heading year. Just bigger into even growth

Eric Tiziani

Hi Olivia.

JuE Wong

you want Eric, do – to do to me that? want take you

Eric Tiziani

that take I’ll one. Yeah,

full introduced for QX. full So through results. come we We we XXXX providing guidance QX and guidance our XXXX would us together when year takes which provided anticipate year

provided I'm at can't So and with to to there, aim we But get thank which guidance into We're new much to time, we're but the periods to our you. noise than on grow say of that delivering to that into ambition for the going of not longer other on be top going I focus outlook XXXX quarters. that, base. happy quarters always we're some the in going hire there's over and going

Olivia Tong

Best of much. very Thanks luck!

Operator

comes question next Jefferies. with Wissink line Our from the Stephanie of

now line open. Your is

Stephanie Wissink

Thank morning We everyone. up a you. had on Good question costing. follow

your I you costs. prepared some think remarks mentioned costs, in distribution Eric inbound higher input

margin. thinking us for the balance the the what's first-out, the sheet you. recent more Just gross want sure make your inventory then what's remind quarter, guidance works, if you accurately for could how about And thinking first-in, fourth Thank implied that in to we're just margins and versus costs consideration we gross on going last-in about how any forward. first-out, be the should is mechanism

Eric Tiziani

Absolutely! Thanks Stephanie.

is freight into in we and when from that that's warehouses, in when current for the of particularly yes, which year and one performance of it’s that to normal in in margin product and per some And XXXX. something sell in The assumed that we’ve more falls terms really in our sell as don't really kits and more we well forward XXXX mix, end and example come that QX provided go usual, environment annual we've at between goods, QX, does So which about mentioned, there lower There's in the that reflected taken margin that and QX holiday that our of costs. was a project of element pressure that the into into other we're not a warehouses, – adjusted of…Yeah, aware do gross ahead. QX we gross thing, noted we full gross into inbound our freight that and It QX do cost margin guidance in current year that per we for then was costs slightly there, QX you forward we so performance, programming consideration we there. we project we know macro environment relates into programming. some for talk

Stephanie Wissink

Eric, I'm my apologies. ahead ahead sorry, Go go

JuE Wong

of know base, just we've the terms was believe going that inventory our finished costs in I good outlook. costs line sight input inventory builds, you gross accounting do to accounting we we that our assumed the mean cost margin to and it that and goods of our our does QX have say in

Stephanie Wissink

Very helpful. Thank so you much.

JuE Wong

Sure.

Operator

Lauren comes Barclays. Lieberman question the next with line of from Our

now line Your open. is

Lauren Lieberman

curious morning. Great! the investments DTC I you was Thanks, making versus qualitatively of and you’re the initial from if Amazon to also, tool DTC share DTC the diagnostic improve of or could kind own that other of you gross parties. your Thanks. your then sort beyond comment rudimentary experience exists third I talk today. And website on good wanted can is coming on about to little much bit a or how quantitatively anything

JuE Wong

on Eric, I'll going part do you first part, out the to want build and second what we're to the that, of the take DTC. take

JuE Wong

our Yeah, Lauren! are so of play everyone, seeing absolutely. very They between and similar direct-to-consumer, for just and and we're a to at The when across the it’s pretty clarify growth growth e-comm. own answer. dot combination pure both. e-comm, similar those pure it's our com things, look easy rates, trends specifically Olaplex.com both of we seeing own so just that I a took report we're Hi play

Lauren Lieberman

Great!

JuE Wong

and like shared we what Canada, on. already also version. our But is that have through that go markets we note is the high that to and program outside U. Australia, highlighted markets is that of peaceful this are some Olaplex.com things the earlier U.S., our of those of key own diagnostic a we K., the you have to markets know going our also expanding terms X.X is to Yeah, one important in Olaplex.com, of so includes

regiment to and for themselves, what also about to their on them. recommendations that we in continue answer opportunity that wanting that be can better going more hair, we to data questions, as them more provide up we to serve know so programs believe so to So consumers about engaged expand for are

be those share works excited at So to hopefully you are and appropriate we able are all with and we'll the time. in the

Lauren Lieberman

JuE is is talked any about a bit you've also. your that today? pilot in think of I that – Like data to collect ability

of of I this primarily was – existing So you so wondering diagnostic X.X still or pilot premature. the well results if it's from a collection that or the serving there's if data already some is that's

JuE Wong

on as not our together from on to So data and that working we have able sort better that but in know X.X analyzing sure is glean speed those com, team, up and dot care that sales decisions. the with you structured is to dot own But you lot know be what also we make updated our consumer a important just com necessarily are to is transformation in lot has more XXXX, to and been team from of our help team. own a us know, so April to of a e-comm our been is insights discipline gathered, make data

Lauren Lieberman

on in And [ph] question great. your just any conversation DTC. for just had of professional from on and win I follow curious quarter on one on guess which this network Okay, earlier, there’s was the or surprise strategy win positive the U.S. up same professional share the penetrating if international? Any then outside the professional U.S., being kind I was share I

JuE Wong

them have and that space expansion successfully that we have, plan, plan of already that terms continue we international long have that in U.S., here Like the is consumers retail that And the for and D-to-C really as countries. out, from of us. from providing out to market, at insight us, retailers so convenience consumer will as that will ourselves layer of specialty we have. which to to the introduce you gain pointed we brand program to I respective then drive same serving premium in we we know that it distributors say, use Yeah, in the we'll each the we ability multiple and those serve with to introduced while our part really we partnering need the it, salon game continue doing against that are for awareness, want buy will in getting while XX/X time meaning you more have what into segment are correctly

you playbook market. playbook region So answers obviously and that our or domestic look is is similar, at each each our very the new will know we in international but

Lauren Lieberman

very Talk] Thank [Cross you great. Okay, much.

Eric Tiziani

on is that around you in was particularly see but it both, the about international which have U.S. we’ve say the it really we had the Lauren just expand the will to humming. to great channel flywheel was question versus U.S., strong in quarter, first in as talked our I strong

Lauren Lieberman

much. very you thank Okay,

Operator

next Our Bank question of John of the from with line Kapoor comes America.

now is line Your open.

John Kapoor

strong Hey quarter. guys! Congrats, you have a

So I a I onto I guys of got questions of to become price is or and with sight brand. move of on tag a good kind to manage asked. that what to it. all associated bunch away how term, wanted tag willingness understand I sort the near line was of the mean your good environment wondering, around one from long $XX Stephanie's just question – inflation that I will have you that.

away to mix you come the guys I from size, that. of just something for potential pack get to support. so, know guys margin if architecture price I drive and like just margin hesitant can you wonder like or from might that wanted be You support sense point a how or

Eric Tiziani

question. Absolutely John! the for Thanks

in start can first that saying efficiencies focused drive inflation we you from foremost so we this supply and an know volume you know the forward. purchasing let are to by going in we're efficiency as and is we're efficiencies and on see drive pressures some So at growing, to our moving we can cost there chain. offset both we me Particularly what that that year growing higher and rate extent, as see we're the that come be

that our know pull We products not which but we any and will talk on but on net we is markets, great management to know going that those you our comment we're about close of in revenue pack a you by at levers question up launch will over so I’ll we looking new asked just – as there. go we’ll you opportunities, know at equity future, pricing, you always intentions price new as we're time brand know follow we the believe we options and not we're architecture, have there, intentions and is going very into we And it absolutely are have strong constantly. look saying, you the to

John Kapoor

timeline Yeah, in guess fair I was just the about I innovation enough. And wondering lastly, XXXX. then

have all was few I a long You about guys think I the up products we next of timing. lined wondering know you that years. runway understand for just

wondering if the done to is year-over-year near that as I slated expect a – well something Should XXXX. know when do new sort has should follow You products was know when just a quarterly or you you products. that to be – that's I expand the long technology beyond of we or then land? new was a product Bis-amino those shot, was we guys of this different chemical just new but to you land technology consistent XX will wondering, and I expect guess offering know term and for should sort and up

JuE Wong

that first, much for question. take a exciting that's very for question because your one you us. thank Well, last very I’ll

we've were As before, an to mentioned fact ready was us it IPO, beauty prior enabled driven company. that ourselves we are getting very for we technology you as a R&D, know clear

that technology institute not that systems in and science. defined So that really and with opportunities, space for piece that we of in the call what run us unique, before use but to and what only visible is helping in on able team started our are space universities for, is to already has application, delivery the look R&D will up we first partner and know where are rate, long a we already, also for IPO in research without the stand well terms results partnering leap really companies well as biotech be not for can our that a very on on us be we and you as the on we technology as even important rest one, grants process going are at looking to as laurels,

at Our is least a to chief charge of lead has going scientist close for managed experience R&D to team XX years by that help us. that

dependency our and on answers R&D our So technology. or your two on one hopefully that question

The other question asked that launch about you timing. is

three in have We seen as our products. of lunched XXXX, you have we have

three to make to We of critical marketing to we time going make to are campaign. when And launch and being to able announcement products the will cadence two comes, because the that stick our a announcement, year. is

good it about and hear will in you XXXX. excited have time So in of we we very what are

John Kapoor

Thank Great. you.

Operator

question comes with Cowen. from a Kim line next Jonna Our of

now is line open. Your

Jonna Kim

much. up of regular progress. how Hi! another curious, follow we and but question. your you head to count I'm our and obviously business up currently Coles, on, Thank as organization performed it's invest know stores impressively is Thank just early the stories Sephora geographies just channels And out as monitor the of I the organizations. for across expect scale kind lien those gate building Sephora taking you on versus the an and and just higher you have the so to you

JuE Wong

They’ve very really the through but very us, and and It early innings just October, launched doors with take just let early is promising. is XXX early very me the indications days. Coles. So Sephora

one that of Sephora We are standalone the the let’s of they Sephora slate this dose. have way, – sort XXX are a few, XXX XXX one plus their it has in we proper, brands of of brands, in and put

that of delivered we our be part XXX, prior. the them be have you to know strong that performance to would for So will continue our and

and them. we we Eric, our the continue that deliver in and really do to support the that, is continue expect ourselves going, us to ahead growing really we primarily expenses because continue to is from of need this been will organization, for has of to to people invest terms reason where why and are plan, you've we In behind of some and heard will growth our for investment managing organization, our we the

Jonna Kim

and notable in much. performance Got any initiatives small, rent higher to awareness in sort sort of follow-up you still country. of have just see and you you do the but China so is did is, place it. Thank there one I what know you drive Thank

JuE Wong

Right.

So we very excited. are

are we XX/XX early is As indications. fact is you strong just, very in China know seeing tonight in and

though As lot its and XX/XX seen results. we you even started very promising a have in brands of mid-October know

be reason are continue is, fact, believe online grow, China to we brand our mainland are already awareness those Global with consumers is with will able we that will the build we why In exciting us something get and team business that still for and brand. when will online even the into the familiar mainland to able so Chinese proper, be Chinese consumers Tmall

Jonna Kim

you. Thank

Operator

Advisory Our question Telsey of from comes with Dana next the Group. Telsey line

line now Your open. is

Dana Telsey

on the congratulations and results. morning Good

What any As achieving? between on follow Thank you about higher the products. I you. new products, Is on the on launch be you’d there margin margins are new have then products? the And mentioned seeing you've a Tmall new up in difference partnership? you the a of and in update past type product the

Eric Tiziani

take one. first I’ll Dana, Hi that

development rest So that's really the I goals depend said think or products, process, us we the the those and is, and that design always to of of new product for worked that in product portfolio. by be for either around to set we and accretive our thresholds accordingly, will It the will and neutral margins well past what design in product.

some channels As some have products across you for to are know that that in-homes. we are new professional, exclusive

reassure a for robust profitable just that and that are So at the we are margins we that process very design us. about product the those not specific going into have goes ensuring to talk level, we

JuE Wong

have follow up on Tmall you Global? And a

Dana Telsey

investing skin and when Exactly. do categories you. that, I skin into a know How JuE about thinking then are launch? Thank did other expanding you start and and how potential you in that do,

JuE Wong

on So the that was one think asked I as that as Jason who question I’ve answered, well.

the to better with we for share due-diligence will ourselves. to able are timing because not We I need continue market to going will ultimately, do we explore according. definitively to be and this, our understand opportunities the you of

Dana Telsey

Tmall? it! And then Got

JuE Wong

sorry. And what’s on your question Tmall,

Dana Telsey

you benefiting on that it. are is Any update How progressing? from partnership partnership or how expanding that

JuE Wong

of will the and our where you the leading brand that appreciate, studies you that one in that of be Yes, year buzz success the, indicator know most we are can XX/XX market. media China first have shows so socially XXXX, this as is in in And anniversary we again, is we social are.

it really work We on conversion will is us. this Global if emphasize, Tmall our the distribution have it social we of if connection, on as and I continue the to and on brand platform portfolio We do do, terms double to drive it and activation We then long continue works, to go because in activation. drop we game in the with have our and again it media to a our don't engagement then really measure what out out, so we done And done. our and something of down awareness build go and else. will it and online, already on the through for specific doesn't build

So the marketing our disruption. discipline is in

Dana Telsey

Thank you.

JuE Wong

[Cross Thank ahead, Go Talk] Absolutely! you. operator.

Operator

with last Ottenstein Our from Evercorer. question comes the of line Rob

is line Your open. now

Rob Ottenstein

terrific congratulations you Great! a as much, Thank start company. very and I want to also offer my public to a

what is of is best by or by it salons, you number So think is, measure up the that of segment? Q&A the guesstimate stylist, with way that that penetration my now it follow Can pre-COVID and the a question the you your first your of is is segment? to penetration calculate of above questions would Is levels. where and how is stylists first about talk I to you see, mentioned I what your professional in one you think

JuE Wong

you in Association are them. that they our are producing well first meaning have content you engagement the interacting if know they look And us. with Professional foremost, will group, there that registered XXX,XXX that think stylists they are we us, for over I with Facebook connection and as engaging hair data, with are constant us, and is they on XXX,XXX at let professional us Beauty with

will that us to strongly very very continuous serve build that feel continue well. we community So

Rob Ottenstein

you And XXX,XXX, on have sense an your annual Great! how many do basis? any the of products buy of kind

JuE Wong

lot data, in stylists indicate able this a at specific that we as our part we will ecosystem. professional to tell from the would serve-up it but our of time, of think you of I as XX% channel, can the for have not be plus you growth year-over-year

Rob Ottenstein

on that even women of is, my survey not we one all number a Terrific! lot had of consistent the your going XX% to product you surveyed are and with public? XXXX, general most question ways a of Thank we forward you. awareness and work one, the things XX% do And good pretty was that did that and increase Olaplex. that is in then that real was Number of heard think I the group, your think two, what is data best surprising

JuE Wong

Thank you for the question.

building is always have we therefore us being on one disruptive our in work. as awareness what do as As help community, what hone to about way well by our and data does brand using of to performance driven and marketing said, building brand not in kind really awareness really it's well works

driving but from time and going really the brick And we advocate. more through and same the buy So digital online not continue awareness to to consumers data and media lasting. performance, be building platform both we that to community mortar also professional that we that build are are strongest look our with retailers, to and going will long be at stray that, at can so

Rob Ottenstein

you Thank Terrific! much. very

JuE Wong

Absolutely!

Operator

for back will now Thank closing you. turn to questions. remarks. Wong I There JuE no are CEO, the further call

JuE Wong

to everyone for speaking fourth you our We’ll year. quarter March results Thank much, New you next conferences you joining healthy a all holiday and an and of of season today. report soon. and look Investor so We thank everyone at with a we happy upcoming Sarah, everyone again forward Year. and We in when us see wish

Operator

participation. this today's and concludes gentlemen, you for Ladies your conference call. Thank

now may You disconnect.

Olaplex (OLPX) 14 Nov 212021 Q3 Earnings call transcript