OLPX - Earnings call 3 2023 | Olaplex Holdings, Inc.

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Operator

Greetings, and welcome to the Olaplex Holdings Third Quarter 2023 Earnings Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Patrick Flaherty, Vice President, Investor Relations. Thank you, Patrick.

You may go ahead.

Patrick Flaherty

good and on you, morning. Thank

are Joining Officer; Interim Executive Bilbrey, Eric me Tiziani, today and Chief Chief JP Financial Officer.

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

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

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

available certain estimates completeness verified it company information other Furthermore, as accuracy that, are will will to information has The involve you and I refer publications give forecasts available data publicly independently are contained well publications industry now assumptions Additionally, the to during call publicly that means cautioned or our as sources. estimates. With we industry other this limitations, this internal the points, call, data based in on these these the not and over information. turn and to of and weight J.P. or undue

John Bilbrey

into both of opportunity leader company, joining the company's and strong. I that and everyone. the understand and in joined you, developed passion opportunity. technology is and the value. The growth in better understanding significant long-term unique. competitive as Since create in generation. That for stronger, of innovation our new with deliver joined portfolio to profitable resilient level and in improvement category, hair loyal execution differentiators ensuring July I the potential Executive growth next products special performance. our brand. goal is path in significant My of see being be today. the sustained of Thank And I spending requires of delivers a appreciation to Olaplex consistent base high-growth Olaplex, attractive, prestige top-tier to for will in have brand tools because process, our this stylists conviction an as growth the place believe end, with the morning, technology-leading a a you long-term of to It's good key to achieve allow several a we that with our company to enable innovative I've care of been the since offering operating Through a goals. pleasure Olaplex our growth capabilities. leading differentiated have professional though, evolve it past XXXX geographies. our attractive Patrick, I for profitability and saw A the different areas continue for trying I company year, said, I've in right X evolution long-term consumers make by stronger we build own focused believe, and a the our initiatives strengths and that our business superior business on in business, time building opportunity digging point I competition. to increased the that been structure, the faced my we're I've patented Olaplex. has and Chair us to pivotal the To and focus advantaged and over headwinds cash phase including business model at face systems make and I

improve of to forecasting, our planning innovation integrated First, management. business overall redesign I've and performance overseeing delivery processes business been the

of And the thoughtfully position enhancing analytics with at third, channels channel execution and our Next, organization. the managing customer- seeking distribution believe the been which our consumer-focused professional to I omnichannel give ensure our strategy, center insights we're to in I've of and and more tools our that invest more and a the and investing capabilities, brand. are reassert becoming in brand stylists will the us our and

In transition. addition success to need to reviewed and what long-term organizational our we determine announced assessed recently capabilities we initiatives, these for and a leadership

that CEO led El company she as industry SPF through excited are will has has leading global next consumer-focused collaborating spent as served she fund, Group, Senior a management significant to portfolio Clinique. last with deep ] brand prestige the ideal She's across [ position team of I the join at teams and President on the held several the mix of focused Chief investment and beauty operating privilege XXXX. in a Amanda care very stabilization growth. delivering led X in marketing an with trend building Amanda the Olaplex have achieving at Prior the is sector. her marketing, Dior My positions company, on to to omnichannel joins Beauty we with serve to remain Super and skin CEO. the Catterton, of Amanda our particular brands to starts a strengths our focus significant Super customers, with interim the Amanda And Vice mid-December, with and strategy where previously the plans in the partnering by Group, Executive success. Until development, Baldin half of years long-term sales expertise second has as across We accomplished the executive, product person the for company. ensure leadership bringing Olaplex our as which Officer that experience priority beauty Amanda make beauty

execution pass results priorities, remainder our over unlock of existing I'm that opportunities. And Our XXXX. to on the third Eric moment, driven expand into on now support and see to and our entire Olaplex in growth more results third And the and implementing new we're to outlook those said, belief Olaplex our a guidance and and for and report will you. we on opportunity quarter potential team look drive Olaplex quarter the stabilization, and We for forward to these changes over with Eric it identified is And as powerfully will geographies. great excited Board progress high science, by the untapped of our to towards partnering the we making our details capitalize provide on are that progress believe we summary, goal. that Amanda, innovate, our the channels I'll our results. In brand. XXXX that with of more Eric,

Eric Tiziani

our that our against was XXXX J.P, second results believe the stabilizing sales half a trends Thanks, of goal. in good delivered goal. and we quarter, We solid morning, top that communicated QX everyone. Last progress

progress the Our made. commentary share that following increased trends yielding I'd in the our also we've suggesting demand to positive the on stabilizing, are investment business results. is like

basis. sales This aggregated sequentially we're First, QX dollars sell-out say relatively tracking a absolute is key metric trend. when QX we remained of in we with terms an demand consistent the dollar what in stabilizing on mean

reported sales year prior path this year accounts, customer to down decline versus of little quarter the between as levels we was a levels was the minus trend and of versus net in continued XX% for there rightsize which prior our our Second, inventory difference sellout current demand. glide key XX%

the position. accounts remain core As position major on inventory a our months at we believe last mentioned good our on-hand items in quarter,

strength In quarter year-over-year regard, positive of of the This business. campaign. continue of positive posting the brand Next, olaplex.com increased channel growth. remains activations. the than and has second increase consideration to awareness, marketing particularly measure and this million performance a from notable benefited impressions the affinity believe funnel that since with campaign strong, from a brand $X more caused in our start upper investment inside the in value We we campaign for broader lifts consecutive in starts for has earned media optimism

more placements, to Pro activations stylists observed commitment media early promotions. implemented visual positive we from recognize quarter holistic and have in updates in this increased work With a further to visibility We professional our the programs, sampling already increase and there third engagement the their our our increased that community. during work. deepen channel virtual indicators success, and with demonstrate ahead approach and the in-person with trade events, is to participation key merchandising we Additionally,

and for to hair makes our efforts, support investment early key as for and #X include third benefit accelerating and consistent Best tied remain these proven consumers our actions our However, #X the our resonating. And assets reset. evolving including of also educational specialty hair tracked care healthier, sales hair XX to XXXX, goal established and with partners. from days to these prestige for to our hair, products, external brand balance marketing, of the top brand parties health we continue position priorities we are retail tracker, Olaplex metrics in our equities, the of and are we strong for deliver premium on our my These prior quality lastly, highest against XX we or ranked appear encouraged and of stabilization be here. In Pro for reasserting care that with months. scientifically According among increasing by

million, walk and year, with and sales approach Year-to-date, previous Let Starting $XX approximately we marketing our during progress invested optimize quarter. $XX through $XX balanced, a learn to million and with for expectation third range million on in more sampling to funnel be certain quarter XXXX marketing year and payroll of initiatives marketing to to have and a our This spending. remaining test, of we $XX deployed the sales the million. have you now year, million in to inclusive me of $XX investment with strategy, we compared we the full X now these made our the full expect marketing,

This quarter, Based in this strength in marketing into further social we analysis, on mix funnel our channels, kicked that we shift to marketing our able starts connected modeling in content TV elements. were and our best-performing full campaign inside of digital, invested creative more namely best-performing off June. our investment

stylists our of to it where impact quarter consumers. a choice fourth the made key the into buying quarter moments investment this also for bigger we third rephase some have the and planned We believe from will around

the in We have about our media efforts our earned multiplier marketing effect which marketing the of we also consistently value spoken a metric of importance spend. value on provides the believe

pleased reassert launch with to position impressions global #X the Dynamics. views exited earned brand social on that value the We XX quarter, media views campaign's This in significant nearly technology. the of and The in campaign the we on regained by care of bolstered to coverage million Tribe and more XX to in media September the quarter TikTok. #X Olaplex's in authority value the third brand science buzz the in hair and report of Care a generated hashtag was earned as campaign are U.S. social creative and the channels according media and Hair media than campaign the million position designed as

education efforts. to Moving our

actively distribute U.S. to our provide to content continue mentions more our and international in easier any on focused of science, the for and misinformation new correct and education business education on use brand our We partners core materials efficient market.

experience. very professional as our training established as deployed Olaplex field displayed U.S. a against commitment reach even provides retail in-house expanding better the is the We building both team, Feedback of reminder, and specialty we from channels an control the retail and education to and support partners addition, brand. this positive of been recently on in-store our we have has our cost-effective capability sales and believe specialty internal more our in In resources

priority recent Another position reasserting professional channels. with specialty and retail is our the

are strategy events that deploy we participating In the activities to specialty earlier, measure retail promotional partners balanced marketing their with by the activations mentioned category a our approach analyze addition increased pro we I to our success. ensuring to and that in high-profile collaborating

program our we our very year, that And this of enhanced to activations a users also targeted We our convert Olaplex. continue at and leveraged recent customers with sampling levels insights continue capabilities benchmarks strong and the executed X the to campaign top-tier specialty high that millions industry. number deliver delivering of in exceeded samples of against with retail new data ROAS industry CRM and impressions, revealing to

sales in our results Specialty the million. XX% channel compared channel, sales turning By Now declined line to to XX.X% Professional decreased to financial as to declined million. quarter our quarter. third with Net the year-over-year for third sales expectations. of XX.X% retail $XXX.X million, $XX.X to $XX.X XXXX.

XX.X% Our million. to direct-to-consumer were $XX.X channel sales down

the quarter, promotion major in had year for we year-over-year. gains and ago, dollar The our distribution U.S. by sequential absolute of kits Pro the that a to and was Middle East international the quarter, third July. By driven primarily decrease in was channels. a in dollar third by decline versus international in to retail the sales net As and the absolute of of compared from geography, Latin the for to quarter by U.K., sell-in specialty down largely QX signaled sequential and the Southeast increase second Australia, $XXX quarter Canada million QX in from the in offset was Asia, related the last million XX% the partially $XXX holiday sell-in America. driven QX sales occurred our XXXX was DTC net XX.X% declined customer The growing

Moving Adjusted Adjusted an million $X.X $XXX $XX.X declined in versus the expense as result third a sales Xrd of in million expansion million the down XX.X% attributable ago. to Approximately compared the and XX.X% other third prior $XX.X in quarter. XXX from per expenses. costs. than These promotional higher Adjusted SG&A distribution basis basis year related offset XX basis was profit a XX.X%, inventory to from XXX points points lower and down gross XXXX. allowance, points XX.X% $X.XX to XXXX. EBITDA of diluted Adjusted primarily costs. Adjusted from to ago. net million XXX the of benefit, margin per EBITDA in payroll million SG&A point from in from share the XXX in XX.X% increase as primarily quarter the income and year to reserve more is margin from XX.X% and diluted $XX.X marketing $XX.X points to product decreased obsolescence increase basis to is basis increase $XX.X year warehouse $X.X million on The well workforce related or million grew inflation quarter adjusted XXXX share was a $X.XX or XX.X% million P&L. year-over-year

balance the Inventory million, our the of for from months range our Now our the at of on sheet. towards turning progress target quarter lower good third reflecting goal our to end second end was down $XXX.X $XXX.X hand. against to at quarter, million inventory the

to flow. Turning cash

$XXX.X first XXXX, During generated we in the months of million X from operations. cash

and above $XXX.X of X%. current portion quarter annual improve cash through income up capital equivalents, deferred from was healthy is cash inventory. model million flow This generating of in million. as debt, $XX.X Long-term working through fees interest primarily rate position our our are and profitable we end an generating ended highly cash lower We the the We at business QX. $XXX.X and million with net

turning outlook. our Now to financial

$XXX year range we in in income fiscal $XXX to million previously to million. adjusted For to reported our to previously million $XXX versus reported million $XXX to of Adjusted now sales $XXX to our range XXXX, range of of million. million versus the net the $XXX the EBITDA of million million And $XXX $XXX to million. $XXX our in Net of $XX range expect previously million $XXX million compared range reported million range of $XXX

closer our the the mid-XX% XX%. the margin adjusted XX.X% levels that we In in adjusted confident can assume we year, to we medium term, gross historical range. the For in remain return to of margin range gross

half assume interest tax update the range annual conclusion, against to effective third guidance continue year. In good in the trend expense represented the stabilize approximately rate XXXX, second of demand $XX goal approximately pleased this believe We for and to XX% of to progress to we're and net be million an our we year. the the adjusted for quarter

capabilities, invest believe and in our as and initiatives. This concludes our consistent We prepared of strategic company again powerful community growth patented implement profitable foundational achieve our continue we our leverage to advocates once will remarks. technology

to turn over call We operator back for the will questions. the now Operator?

Operator

the with [Operator Susan from of first comes Genuity. Instructions] Anderson question line Our Canaccord

Alec Legg

on It's for Alec Legg Susan.

the on Just sellout.

stocking down starting too? compared how You are And talk stabilize maybe about quarter? unit to for the half. on levels, the mentioned feeling it exit incremental you of account first the any in rate can to at was the just XX% to in XX% promotional then Just the I retailers about guess the kind levels? a basis of details sellout

Eric Tiziani

questions. it's the Eric for Alec, here. Thanks

yes, So against for do sharpening of with year, guidance QX mean with progress would our stabilization. results show we just expectations, believe of again, we're good pleased delivery What line goal by first, in this say, I which our the the we stabilization.

looking we've trend. progress ways which the the saw good talking in of time that third in And stabilizing we against that One quarter about at what sell-out dollars over been and trending absolute is that. was

So stabilizing absolute in versus sell-out similar. QX. And to the very the question, separate versus QX we sell-in your and trend same was trends sellout relatively dollars saw

inventory as that believe are we through passed all this customers, our we've in items rebalancing healthy key the earlier at inventory and that year. our So hand. core a experienced that And headwind customer weeks levels we're on of

we we continue your part average We the quarter. And actually events flat happens sellout see to third are average not So quarter less rest third in our the stylists dollar quarter important up as some But promotional when to to the in The absolute less of trend than versus new bit it on that the in the third that's a unit we a but second be opportunity for we basis, trend a think our in do saw that the quarter minus that in the the quarter our acquire the third last our on XX% was participating more being especially key. stabilization price the promotional question. customers, the an for promotional and tick the are second average. customers, category. previously relatively and of and consumers, than category be to quarter, strategically is than versus

Alec Legg

And you operating costs on with how promotions? thinking on guess, you then to the or compete when up And ramp the marketing? brands are comes EBITDA overall as you margins like margins, about it balancing said, just other gross I operating then

Eric Tiziani

Sure. in see in Well, been gross still we that that me And dealing we've with and on historically. using spend our those and particularly know we range year, year optimize get equity, really and continue XXXX, to and that at We gross around some following about get we're building with we've strength it firm on start And We let about direct upper marketing, marketing and We've on perform And gross starts that margin, to believe, at as been We the that funnel year best brand. that. returning this in with priority of stated excess the our as margin do out, that sales priority and margin. mentioned to that see been levels inventory in best as we've measured. headwinds support -- we the our assets we're stated, see the can taking cases, increasing analytics data in marketing actions that side inside modeling using continue headwinds, for with building spend this approach a excess sales been also the talked funnel at dealing on through we've message ROI the marketing to very the customers. we've to call, campaign. partnering and and will a awareness, we investments to with best-performing we some as the our that certainly brand We on the in brand. we year. so. We're the around are about in the the elsewhere of our to the where spend. the analytics think redirect P&L. as mid-XXs much looking that We've our levels an building want be headwinds this this we the investment learn talked we'll through promoting message, test, this to some items performing been put proactive use some we've the And our channels. lower to gross to Those mix of Olaplex slower-moving information through in margin inventory big

marketing, ROI some platforms our and So strong get whether ROAS olaplex where we e-commerce retailer.com well. and some it very metrics in as .com of be of our performance

Operator

Our question. next Ottenstein Rob comes proceed question from Please ISI. line your with Evercore the of with

Robert Ottenstein

on, And you call bringing this Great. her to and appreciate Amanda doing soon. look meeting forward

salons. your us X into on to buzz still a on dissipating on Why an now? and the as update and So have it counter readout still decline of the can you any questions. on Or the that kind One, whether second, the is, ability then perhaps what's act sellout view? that deep you and And go social on where you media drag level? monitor whether usage detail business a this your give the bit in it at is the see little stylist going on more

Eric Tiziani

Absolutely. the questions. Robert. for Thanks, Thanks

two talked the this some media the social sentiment significantly seen social to up the sentiment the we've negative media really the the been And call we as narrative drive about mentions in investing right? and we've what through in improve One, quarter we've in on and And brand, traversed And negative year. media, misinformation that correct mentions and into as pick the of market. buzz, and first pretty negative about year. media misinformation the break of drop I that the parts. sentiment past. would First just in We've some

to good what earned that would the I around about call we've we progress earlier part, seen second in answer talked value. is So use media there. And question the

how talked actually and care we the successful the position we've value #X media marketing So the a in we quarter multiplier campaign this is in exited in of believe in is an one, on We category own investing about the returned hair big been area and the investment. on we've third our really that number to U.S. the back quarter, in earned had. a

we're If we're channel. sellout say very as progress what we've in good has seen talking again, in your trend about the call, business, trend the frankly, And talked on we're quarter the last and well. as progress went to on The similar we've those took through actually a making about we little pick seeing anything, Pro as So in question Pro think stable the we as we been elsewhere trend there. second stabilization. And specialty about quarter. the was this quarter, similar being investments area We where I with the XXXX. accelerate the an up we from we've investments seen traverse sequentially If to green that to Pro particularly about community resonate those what third we're retail. stylist saw going hold. in that. we're and believe done We've seen, good our That's the activities the when shoots seeing of balance

So see to well. we're quite as that pleased

Operator

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

Olivia Tong Cheang

just that sell-in in doesn't first it And in necessarily back key I sequential improvement into seeing it what looks dollars of holiday QX, you're the My of QX. that. drivers around if part imagine the we of in the was in is terms XQ. continue like

also over then seeing you generally, stabilization rate if you're if could sequential talk so trends, October far? could you what about the the to on talk And in out, of If exit next view expecting? terms that you at cycle months? And you're what on your XX trends consumption, just then smooth the that

Eric Tiziani

Thanks, Olivia. Absolutely.

maybe and then in start quarter, the I'll question and talk And I'll sell-out. I'll QX through So around this start third sell- talking progression just about QX. by the with about

-- So retail net the net actually and quarter, then quarter Pro those perspective retail our performance strongest again, declines. From Pro sales of the what were in sellout performance, you third sellout then strongest similar was the direct-to-consumer sell-in the or in followed sales in when a direct-to-consumer terms call look decline third and by in the quite and trend. we at have

What there. why. explain me let differences So the are

all, that own Amazon was the worth growing the even And versus about prior of customers putting into again First sellout of the our a direct-to-consumer, back noting of that U.S., quarter that for We been business. like it's the the in consecutive better year. investments second we've talked in part on olaplex.com.

internationally manage was we've some dynamics to as of investments the some held Our on back DTC weaker business there. bit a market little

thought that's was be back I we've to improvement exited direct-to-consumer. In I in in there. into the additional the mentioned earlier, retail, would a as it we quarter just the the give So on less we in helpful QX sold Pro, kits that through color actually, the slight just actually sell trends on the or why a as was cadence investments put of place And holiday retail than on sales this to little out. last in in business. year we've retail channel reason the the quarter other third specialty quarter worse decline the of the sell-in appropriate third specialty in And third versus the the of the year. That's as net bit quarter seen with commensurate

expectations a asked we say similar very that this So exactly It's we When then trend. what for QX. we're good was within our on what mean implied actually guidance. into QX saying about the and QX in that's projection stabilization, as about you as go we've does progress made

XX guidance So keep the stabilization on through talked the continuing It's the of really priorities it the look the us we next And in that's for follow about. over know that seasonally what to a lastly, funnel to quarter. And to brand does you sell-out. about bit on That to the noise business. we we've balanced and business. we time. to not stable hey, about, adjusted going putting But building fourth lower marketing the similar place. quarter-to-quarter like its all here. take absolutely, the impact a funnel do going with marketing but to against keep been months? asked time sell-in We're going in provided business yes, for trend there's implies little versus a That's assumes in We're and have investing optimizing want on takes fully investment that, from the upper that way, just measuring we've learning

expect So have had take with next we months, over the time those more that impact XX to some even from root to as see investments with consumers, our stylists. our

profitable this progress growth, we we'll update that half has achieve. to and can so stabilization that's a we this it the going again, know growth that priority goal. a the believe demand top And to this trend. up And of shows good to long-term back really business call set return been say of us year for We against for this

Operator

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

Dana Telsey

you puts thinking As expense at and And the on 'XX, And investment do look business? the and and over expense How you structure is structure business, could marketing what think the this takes? what the steady or of a state? products, timing? seen Eric the forward as are year, also year products next about obviously, of you how new be the new going about

Eric Tiziani

even the you investing this the for other see would, shampoo, meantime, on still sharing our new we're care therefore, adding compare for XXXX, our call Thanks brand, the comment new and believe so reasons we're our we level part guidance Olaplex incrementality looks XXXX the was sales call, the We we in setting by stabilization is balance big trend our to with our pleased helping and always I Lash forward we learn to would at quite which have having highly to been and years results the when right we science-driven, launching to test, out look of time more approach, a These the and invest drive and to multiyear and capabilities intend in like remain of that technology-driven, of we much, business. come and in here been us and our investment continue right we're products limited category, time. the that look the next products new that brands behind most hair all to prestige the Dana. 'XX segments talked the such pipeline, Absolutely. we with or your we've focus new XXXX. that some assortment a We've stabilization the brand to what marketing a for QX In in in our differentiated Again, with the optimize this where has excited. going opportunities. And category of future. the other believe continue to come. recently, are the say us. where opportunity purple to strong poised in ahead about trend at precedent, of return believe that really brand, one we incremental growth to XXXX not up for the going our and are right that pipeline, us foundation, dry We're on that We demand be still just have of many launching we products question And really conditioner. big to is

certainly that's expect in growth tailwind business a future. So the the in what we for to be

Operator

Sandler. Our next with comes question from Wolfmeyer Korinne Piper

Korinne Wolfmeyer

a those with bit to to be new help forward? seen of you're I in pipeline. Can launches new be uptake innovation question here what in the that couple you've last I guess really the past of stronger, to launches piggyback talked of little a around guess you if going some that's or this you've products. discuss mean, I what about And newer those driver of historically, slower maybe quarter? product key to going the quarters, uptake just off doing

Eric Tiziani

they're typically Thank SKUs said, performance you, up X how their they for segments Absolutely. in these Like products. X selling category, at Korinne. I performing the we of are segment. When the in that Thanks we're pleased new top top terms within question. of within with look their the

same our Now but little I in than the drive headwinds in customers the actually segments. say the is faced innovations also felt smaller segments. those overall how bit with helping that would has we're the for are within and have year, are the across talked some as those we've they're performing a growth headwinds brand that And brand. about to others, all size, our the develop to happy they're segments Olaplex category What further throughout these not of market believe halo of the we also

innovations marketing at marketing with big We're entire just year the doing? still And and behind each putting better So say, the our are relative headwinds. What but execution. prior faced context we and as brand campaigns let's getting not some the plans launches. in as launch well of in has XXX the performing we're better those as with those

note our important thing is not to I launch to think here to an be plans are going then on. and move

continue the see our a That's sustainable become year strategy. want X them we been parts always and to those of in supporting key long-lasting innovation sure products portfolio. to element of also year new We make X

for moments it's that the say, X last we've be additional XXXX, to your and launches And finding going that and so our hey, activate had, year support part those plan. I that example, in that's question, for of would to against

Korinne Wolfmeyer

helpful. Very then positive, know just there on And touched I that this if briefly caused I the the seems and segment DTC, quarterly again. it DTC it. olaplex.com Q&A. DTC like weakness. But on the dynamics was could touch the in earlier are Got some overall we the

of about it As positive into to the QX still growth? some segment if XXXX, there would it is to positive on is negative? return it we even olaplex.com that be dynamics are going parts that, Or other that -- then is growth, think early cause to delivering could still think and reasonable

Eric Tiziani

the Yes. entire I then and focuses to returning on just to would say, business, stabilization growth. similar

for about world or that direct-to-consumer doesn't sephora.com around Just well retail sales. the as Amazon, like everyone, retailer.com a U.S. include talking an talk channel, pure-play the in as ulta.com about retailers specialty and captured we're reminder e-commerce when in as like gets our our olaplex.com we

direct-to-consumer those lower continue that investments the driving stabilization been inside part driving even year-over-year large I brand we're that and as are see investments the we've we've in we again. more to upper to would olaplex.com. really And the this of say, the starts against in consumers about strength from also to because only but the in seeing relative pointing is channel, funnel campaign shoots so the we one go we in putting funnel green made best to investments believe think strength we've already just not growth the of And about learn olaplex.com's case, made,

bit noise strength very we continue but sell-out, and through having talked sell-in, of see for promising mentioned and in we're very, momentum as to I building. a earlier, relative that So you this being little the as there's channel

Operator

Our next Chowdhury JPMorgan. question line with from Shovana of the comes

Shovana Chowdhury

on management? an In company's as you substances your acquire in prepared a -- broader remarks, And you overall events especially participation and mentioned see changed participating color promotional some not just opportunity promotions too on more add previously customers also more. new more the how the to Can marketing your you to on promotion? keen has level, where in change plans with

Eric Tiziani

question. Thank much you the for so

continue penetration past, So deeper about when do events. We're let those with stylists and for using can a through promotionality thing with results We've that the the how Olaplex the we're this me we consistent as customer throughout the strategic When as drive that about it's business. and in look category and And We customers, the we promotional pleased the consistent of question possible, the regimen continue data, to strategically -- so do we the acquisition, do than we're new is been to buy what to far, to with well. right in sure and way regimen of the our is brand. the events further talked just as how not those you to for consumers, into But seeing less we good for equity right as we at where to that we the we results our that expect it -- stylists important course very pretty angles, see think participate we're think the looking to that. drive overpromote promote first. moments average. do in make we make that's year. and often how consumers This the participate. do don't we've tackle really strategy

bringing earlier, In we're so to J.P. the terms strategy of management, joining marketing excited going changes any of to a be with company change mentioned in or as our that Baldwin, she's in investment Amanda of middle and brands capabilities, is going and excited has we're on driving to this incredible experience really in be as to business the She building December. well. about what Amanda marketing

in marketing made So quite our learning yet. strategy and and about point that's just the I'll optimizing. to not earlier testing comments change I But a

our our we We optimize mix go. marketing spend are as modeling and shift to analytics using

we performing -- take certain So noticed information our in into quarter. better than were to we the money shrink others, invest certain marketing were we're that that in want were than able to that We -- performing channels deploy campaign, starts in and and assets side fourth performing better how others. that channels,

Operator

is Cowen. last question Our from with TD Jonna Kim

Unknown Analyst

in then you on share of domestic between balance hair the ahead? lastly, seeing overall And if the talk you're bit more Can a this Jonna. you're Nas Tom just then update into you play trends It's international how about of an does dynamics on care landscape? and growth for category? the for seeing provide the expectations your in and growth prestige terms market little what just competitive And could

Eric Tiziani

Thanks, question. Tom. Great

When stabilization naturally And a trends. stabilization the trends it sell-through of consistent. trend, share tremendous and quarter is idea quarter, we with here market So about versus trend base, market second third for very you of on foundation path. as our Very That's in for let the what out. the value translates stabilized return the right think healthy steadied share growth. quite to The then saw right? share that's the to we talk and largely the me We is opportunity market well. it stabilize creation start demand that there's business relative with that

quarter markets, U.S. declines similar similar is Canada, similar seen U.K., we've trend stabilizing. Between we've in again market the in and that markets, said what our share have some between saw domestic a What the past international U.S. the in sales and here is international, English-speaking in frankly, the third and consistent headwinds, followed So bigger international. you the of to Australia

specifically. and starting selectively Now made the Canada the that or U.K. in see investments we've whether markets as our in to it investments we've be increased funnel in also also stabilization PR we're in those trends in some similar of upper marketing that those markets, means

that, promising in what international shoots is seeing about and we've from other we're talked growth green that some previously. markets really Aside

today in for and certainly are but we that markets is the well. but about are e-commerce to some the Nordics Asia France the category. future. And China really believe you us Europe in momentum going Southeast Middle not we're lastly, as asked last dividends us and cross-border pay for the East, promising seeing These in smaller all that least,

attractive in to prestige grow. And continue resilient continued We to U.S. see globally and the strongly very It's it's grow as continued a care hair category. to

We expect that salon. there's well. a as there of to and the segmentation a continue, in front XXXX of fourth little frankly, Yes, beyond bit into and quarter

pro but little expect channel quite resiliently more pressures bit macro have we in the retail has and been direct-to-consumer fared to and with a challenged So that XXXX, continue.

focused we stabilization category. business growth. foundation and things right the return So doing to all very on in We're profitable the to a are -- attractive put this in very place to right profitable

Operator

you. Thank

remarks. closing call the back We over have session. Eric I'll reached to the end Tiziani turn Q&A of for

Eric Tiziani

joining the Thank We you very your us on the for today in much. call. everyone, Thank you, continued interest business. Olaplex appreciate

very look a to soon. and Thanks have of speaking you any great to day. all Have again. If you forward we again questions,

Operator

today's teleconference. concludes This

You may time, you this participation. at disconnect thank your lines for your

Olaplex (OLPX) 7 Nov 232023 Q3 Earnings call transcript