OLPX - Earnings call transcript Q1 2024

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Operator

Greetings, and welcome to the Olaplex Holdings First Quarter 2024 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.

You may begin.

Patrick Flaherty

Thank you, and good morning.

Amanda Officer. Executive are Tiziani, and today Financial Chief me Baldwin, Officer; Chief Eric Joining

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

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

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

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

Amanda Baldwin

you, thank to first year. you Today, representing and financial reported a us. the we quarter Thank start results morning, Good for solid Patrick. everyone, joining

progress While been in transformation the business internally, we've making February. good we on outlined plan

As sales discussed on the we XXXX in put continue trajectory at stabilization business, a growth. to foundation and our view a prioritize while build last and we year profit that strategies earnings a us call, the designed on generate consistent delivering to stronger to are aimed

will forward encouraged and this some the journey I'm of business. the about take this by steps time, While making remain we future are excited

community designed even consumers of product business on the Its business, also quality. Olaplex We the have of sought model. negative It's superior that capitalizing differentiated a At extraordinary brand taking are build power and science, that to health impact. are performance. the an which long-term are it's the they on and with intently delivers technical passionate products maintain time, of same are innovative focused by if after its actions a and foundation stylists the short-term we unique advantaged and the global

a channels new evidence that As greater product. find existing distributors we year source as quarter, for focus this where diverted are as mentioned accounts on and allow distribution of some we to customers last our rationalizing current the limiting with well

specialty in quarter. the year. we highlights sales of the net for timing of reiterated slightly our retail driven for high first shipments guidance reported our range, the We outlook and channel, by earlier-than-expected end the to our Turning above

equity, talk XX brand to all most #X to strength best consistent makes #X the care consumers Olaplex of I'm care for a or by which recommended and with previous metrics for our excited brand our stylist external health brand hair ranked showed hair my about. Additionally, includes among tracker, top industry-leading quarters. According hair is important prestige healthier, hair, premium continued

in be quarter top the XXXX tracking to in a SKUs the distribution continue the brand channels. care hair had U.S. a at category all accounts of We retail prestige of and leader across X for three scale Circana's as first remained top data best-selling in X key our Olaplex of market of

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committed is priority. On maximizing All developing against the culture XXXX, enabled three map we talented our and long-term work our strategic investments to our call, impact the of last and earnings to include demand; to this key priorities strengthening generate and passionate for that our road support future vision and marketing of which is introduced Olaplex. our the education for capabilities executing sales, team future; and by

on towards expected. with The these execution first accomplishments we pace the quarter included noteworthy that goals

these that impact initiatives. walk the made focus is maximize on initial progress sales, efforts our On education implementing me execution of to providing awareness, our and conversion seamless on you generate Let to investments we activities our brand-building drive demand, marketing through sell-through. the and

technology. and not the businesses. ROI and are and our distributors this of a and priority channels grow by best-performing sponsored the established sales remain the and goal to campaign the our #X the the have salons prestige total awareness our demonstrating connections media we empowering #X our our strategy. team this Olaplex's optimizing relevant Olaplex brand developing balanced connection him an important has their stylist impressions, events. We're the of of PRO allows expanding pilots influencers committed it about drove a full-funnel according and relationship consumer for engagement educational spend assets. At creator-led into today core to Our be teams directly is expertise we brand moments content of field earned and Circana with as our marketing engaging in our enabling position provide presence partnering deepening the engaged our science on group No.X and support XXXX, and with oil to this activation hair from and the as participation engage audiences. One benefits with shows internal is more these new combined our We're our recreating meaningful craft close potential roots, the our sales to pros. the of brand returning would to perspective and quarter the stylist and and speak campaign without knowledge to and stylists, relevance of teams ensure To with their generated expert And and about education on succeed increased partners. and efforts. first in helping billion brand in marketing our Oil. is to more than new X our and trust We've the By industry of sustain focus the marketing celebrate and materials, Bonding highly approach data, marketing focused consumer greater of compelling placed in culturally events field Olaplex inserting future frequency our a curriculum was coverage our exciting trade Olaplex increased and with a and the introduced best-selling activation them team's PRO highlighting at to a year ways, in community, and with

messages the intend we new to to science articulate expect of launch the professional and routine. our of ahead, enhance benefits To we end, the SKUs evolve and better coming strength Olaplex our the a to Looking to and of complete our a stylists. that campaign core positioning aim highlight to Olaplex months, further in marketing commitment

own We celebrate our anniversary activations celebrate as introduce as a PRO that also we community to plan brand. our XX-year

and the support implementation business processes, Our to an future. business and third-party better our to across help expert forecasting culture improve our improve This infrastructure to This created ongoing foundational enhanced our work integrated of second overall is the planning our external organization. designed the is with performance includes priority capabilities to of strengthen management.

Additionally, channels more stream across we spending investments optimization. and for overseeing internal marketing work created an centralized strategic

to in We an believe agility opened allow our in-person small our a operate. New collaborate has speed We allow City, come areas corporate functional the upon which will also office and York all setting. space further teams been with to and culture Olaplex together us build and organization strengthen which will this to able in across from

and foundation the will of road the build for identity, brand, brand believe of long-term what can driving ahead Importantly, next. perception for our our guide will thorough and we enthusiasm of. I do passion and foundation an we to a is assessment our vision and work map act future consumer Olaplex. a brand study business recently forge identity, of the a and customer evolution the a Olaplex This strong base confirm consumer for there's and omnichannel on stylist design. our ongoing in strong opportunity, market priority and third embedded refining insights platform. messaging Certainly, we that in-depth our our undertook category, that We for solid brand as off Encouragingly, for leveraging includes developing of innovation continue

a strategies a have record, development business launches Additionally, with identify proven accelerating creation track charged around talent bringing is new team we the continue to beyond. And executive integrated By opportunities our developing charged leadership pipeline. product function created brand expand new with our in product innovation to lead we world. product development. also with also a formed and commercialization to more in see the our a new XXXX significant and for robust and ongoing have global existing of we team enhanced as dedicated This new leveraging

global incredible to future. The accelerate these develop insightful. and feedback our for and believe the road our a believe as an designed in understand to customer are unique appropriate distributors to distribution Revenue Chief overlap structure from region international to I've in officer needs our our and assessing begin with key to our in and Asia We the to strategies. meet domestic Our assess future. opportunity business support traveled have with depth localized develop near-term the across spent partners opportunities conversations partnerships. global to significant this the our we for goals we recently extensive opportunity customers our spoken I their with and positive and was and partners there channels current focus our map on world. further for local to better is We brand the new that also begin to I and and be team, Europe in time strategies

components With achieve performance progress goals the to toward positioned believe with and first these work in with quarter. With during a our the underway, framework well to XXXX. we long-range our to summary, we establish plan are future. In steady strategic financial we we are the the mind, continue initiatives progress for the for and date pleased made

in like X for to pursue to behalf another recognize Eric months, these Before the it over, leadership moment down wish I is I would onboarding with team and who years. announced previously work across entire I provided effective turn him stepping would nearly my opportunity. the for best to On Eric, few to thank the the pleasure through take X It's future. a he as been CFO him of last all organization has at a Olaplex, like I to May the has

experience also executive Paul in financial interim a assignment. who over Paul Kosturos, and departure. who CFO XX with serve will specializes as following We CFO Eric's interim of is welcome years our

pass transition are a fortunate Eric. team, for Paul to that, expect in smooth successor. And search it a with our will have I now permanent as to we We over we and

Eric Tiziani

long-term And as to of you, and my Amanda's a direction. strategic been responsibilities. and past place this by for believe everyone. to organization like Olaplex the I'm continue brand, of confident exciting strong few him, morning, Amanda, employees transition. potential we and closely the I'd working Board with to good in in gratitude the over and in juncture I is CFO. the my tremendous the leadership Thank team in under lead the to company to and the to opportunity weeks the expressing power smooth to the support begin an hand all with Olaplex have I've Paul of off

Now turning performance. financial our to

the We encouraged first our are for keep results track for year by guidance us quarter XXXX, of our delivery on range. which full within

of we experienced consistent sign year-over-year sales the largely is our our at products seasonally adjusted XX.X% trend of QX quarter XXXX, was declined the to high second due quarter million that exceeded guidance Our shipments previously which aggregated we a demand slightly phasing sell-through first of retail in stabilizing. Net trend first end range disclosed to accounts $XX.X have marking with the in key that for in business. the for specialty that half our

As in offset QX in related certain decision of product to believe we by key decline announced XXXX. This sales previously was sell-in from weaker a prior accounts professional net versus to reminder, source to benefited in distributors at diverted net our the last due comparator XXXX our that or decline a the year of QX QX better customer rebalancing inventory sales than year versus we rationalize sales net marketplace. was last business are partially negative sell-through as a our certain QX impact with year the

we earnings remain have that at As on building our position believe accounts not there our we recent major is discussed and months a healthy to our hand previously items core channels. calls, inventory that inventory continue the position in on in in

to by Turning channel. performance

Specialty declined distributor sales to which rationalization, net million were the Our year in and the investments. By inventory sales business primarily professional down professional year affects in channel seeing increased performance $XX.X impacted marketing the quarter, the participation believe, first key was by sell-in geography, ago, million million in XX.X% year-over-year, rebalancing. The and for inventory year-over-year of tent-pole expectations of due Specialty Retail strong due comparator primarily sales olaplex.com, more of $XX.X our phasing weaker the a outperformed quarter, our we events. the channel and X.X% Europe. customer a in is from partly to year to advance ago. from prior versus positive customer to retail due lapping direct-to-consumer benefited U.S. aforementioned shipments timing offsetting related our also of $XX.X and from rebalancing decreased which XX.X% marketing inventory consecutive momentum from increased customer our to the X.X% fourth grew than earlier-than-expected to

year in rationalization, impacts versus impact has a believe a negative Our part XX.X% comparator resulted declined difficult in ago, international primarily of more in the year distributor a our business which due prior Europe. short-term we and on volume, to

inventory ago. a on basis $XX.X Moving with million XXXX. of XX.X% from expansion points a lower warehouse in from XXX the in from XXXX. of result the gross and the ago. quarter related the basis The of marketing, higher in down distribution million year Approximately the XXX distribution XX higher costs Adjusted points from in and was mix. Adjusted million reserves basis costs points This in remainder prior margin primarily adjusted XX.X%, costs, result year workforce XXX up unfavorable favorability XXX first this P&L. SG&A of result is and product obsolescence offset from XX.X% grew and of and profit to of to lapping sales of a $X.X is basis million was promotional the $XX.X year in lapping allowance points from $X fulfillment levels by a is partially $X.X investments quarter and basis product points million inflation SG&A increase first and

income quarter the million first per Adjusted million declined net decreased During and $XX.X Adjusted XXXX. the share versus of in to $X.XX Adjusted ago. XXXX. diluted in or share diluted first per from $XX year first spent EBITDA we a XX% to the $X.XX compared of million non-payroll-related advertising XX.X% was million approximately $XX.X to in $XX $XX.X or quarter, margin XX.X% quarter expenses. million marketing EBITDA

to the from quarter at fourth down Inventory the the $XX.X million down $X.X of first and of of quarter our from $XX.X was first million $XX.X of sheet. balance end XXXX. the the end XXXX on million, million Moving at quarter

hand. made good our levels believe opportunity target We inventory have additional reducing progress on inventory. this have of we lowering And while to year months healthy, inventory of on to continue our we levels levels our are

cash Turning to flow.

the has million model, from up of profitability of in improvement to XXXX quarter This net interest first $XXX.X from $XX.X deferred ended above generated in at income year cash portion million first $XXX.X XXXX. and cash We healthy operations. During anticipate capital equivalents, the that end generated cash first increase $XX.X generation continuous annual debt, will be the rate an quarter flow with quarter and continue was the of as asset-light our of million. position. cash another million and working XXXX high Long-term in $XXX.X We an of cash of drive XXXX, from current we million fees an X%. and we

outlook. our to turning financial Now,

fiscal million issued net with reiterating $XXX of call. $XXX expect As and to disclosed of in for are $XXX the range year outlook shared XXXX morning, $XXX to net our million in earnings our assumptions million, the $XXX plan of earnings range on we EBITDA million. The in million, we our in for the adjusted year and $XX million in the range release the adjusted last our income sales consistent are details this

forecast and drivers account incorporates volume level reasonably a Our expected on product basis.

continue second of several the in investments marketing impact half build initiatives and that level assume the We our quarters. to and sales seen on of past demand our we've the that

drivers you for remind last major me on we earnings Let XXXX call. shared the that three of volume

key contribution given the new in incremental but launches the we XXXX year, product this products sales contribution First, in lower expect timing than year. from this to starting later from anticipate be launches new of XXXX

certain do negative up includes are build that to XXXX and distributors to in our Second, but focused focus as that opening expected have decision are on long-term on rationalize key we constrain the on actions not a accounts This short-term customers distribution new the front, we're success, expect taking particularly growth and accounts we current into in off-strategy effects year, inventory due of of half unauthorized resellers. And pricing, of or impact the year-over-year third, the net our lap net sales depressing XXXX the either in to sub base. tailwind, a XXXX, had first sales we which rebalancing the customer distribution equity, brand impact. as

second of the in we demand experienced QX, quarter, phasing certain with for we the customers. and adjusted trends impact stable remain largely what Specifically expect our to to for activities

the As the holiday as, market. momentum anticipate benefit quarter the the third in in we of initiatives move launches the build during product in the new our and particularly the land we and half second We specialty kits from of sell-in investments seen the to of year, quarter, expect our in direct-to-consumer professional those channels historically given from we've positive we channel. seasonal our impact launches. fourth and retail lift timing And our into

P&L. down Moving

inventory For year obsolescence to to assume basis XXX to the we the from gross XX.X%, representing levels full range levels of adjusted we lapping points. promotions is the normalized in inventory of XXX and excess year expansion XXXX, year customer This margin expectation of this last promotional higher of of year. last result move lap the XX.X% as

made from of versus in increase Roughly organization year additions is from normalized benefit annualizing we cost $XX a million, we primarily million some addition, expect In million dedicated last XXXX expenses expect $XXX expect of an to full for the we that headcount $XX from program, costs. Furthermore, accrual savings will to internal of year XXXX. inflationary more expected during to in range bonus of which XXXX cost $XXX million adjusted the pressures product our payout in and in offset versus the half XXXX. SG&A costs than increase

as the invest we of to levels increase half growth. are and required marketing at expected other we in to sales is return believe expenses long-term The our

$XX million continue to to range million XXXX. full from be and increase an Specifically, $XX.X year advertising to in million, the expenses $XX of in we marketing non-payroll-related expect

and and year. an for adjusted to We approximately margin XX.X% to in achieve $XX results to out interest Taken adjusted conclusion, are pleased of XX.X%. the continuing progress rate expense year. In priorities the the range XX.X% the tax all million to effective be million net XX.X% top-tier we we've with with assume profitability anticipate to industry we first $XX on the set approximately for of EBITDA together, quarter

cash driving are gross profitability industry-leading in margin concludes expansion our continued in efforts Our with our trend, strong prepared flow sales and remarks. generation. This stabilization rate

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

Operator

first [Operator TD Instructions] with Our from question Jonna Kim comes Cowen.

Jungwon Kim

on professional and on margin. just then any with lately beauty in slowdown the seeing been the curious stylist seen anything the Just if what and just the gross channel, you've general? category, also noteworthy, And salons -- on you've another help salon overall question

we expansion You've why Any seen expect the expansion nice more year. quarter. reason this throughout shouldn't

Amanda Baldwin

respect to seen the broader in what PRO So from trends, with generally, last any -- about last and we've beauty I changes call. more we talked within consumer think both don't

we're believe care really more we That's hair there's certainly front the where will us the We great our I'll the purchases. front distribution in hear that of and momentum continue see else. With happening consumer terms strategy, future to salon So that, buying PRO, on salon, different places that of future is the future are as in emphasis certainly people you the of channel our certainly a about, anyone a consumer in importance it's buying behind their in prestige about PRO Again, the think think across of do as believe lot shifts we of there the what than the and but opportunity. different could we to placing they lot but of of category. are the a we me call, there's respect believe of in talk broadly. that products for of

Eric Tiziani

in And and prior If I'll saw year. the we've just the Jonna. take gross see Yes, expansion that we full we with were similarly margin question, QX on expansion that, fourth expect year gross high second quarter. the build similar guided we and to pleased quarter in margin the versus gross to the margin I for

outlook a we've bit gross that little well say of savings margin our And is on progress would the I a our related dip QX by reasons, making to of Just sell-in initiatives. for kits. seasonality holiday supported the in been it takes that,

the prior QX, gains in the versus here. obsolescence continue we and We takes, reserves expect terms to throughout cost of then levels year in wins of warehousing continue and similar just have savings to lower good And year. to really the puts

Operator

Our next Andrea question comes Teixeira with from JPMorgan.

Andrea Teixeira

on Eric, and one and best the of Thank question for you all luck. help the Amanda consumption on follow-up wish you international distributors. for a I have

First that you have were Amanda, the light but your expect of particular your thinking was of heard in in what as you from reducing exit And are lap When far customers? market to the we how to the peers, on And you of reorganizing commentary, we international international I the should second, one in on appreciate consumption, trends quarter, and about we and go decline. streamlining, that? innings how how we're big a to internationally. market from

Amanda Baldwin

the question, Thanks for Andrea.

what at us would from globe. as on through international year that sales think in last thinking very a I I say point comps think as the But PR building future the the when had we lot lapping I comment with really going I this and think to different really, we spent that and is can international out harder believe of impact of from in for there's the that going strong were across in the demand ways the capture business moment. we is how markets a those we on time we're strategies about really partners, forward and terms what we

Okay, think quarter, not also specifically. on exiting that's we trends something comment the the on I that

Operator

James. Raymond from Olivia next question with Tong our comes And

Olivia Tong Cheang

you, the Thank for through help years. all Eric, the

see looks like So it's that nice retailers sales it have to to stabilized.

give love color PRO where you us diversion some can or also the channel? would is the anything limit I you've then coming color state but is diversion, to was reached one-off a you First, have you there. on as think controlling the culprit, that and the And about imagine I retail if distribution talk work do any main would there steady towards could from? on you

Eric Tiziani

terms particularly impacts for care way, that our your that some international way, we of them rationalizing track to for This of And the by were product continue in think Olivia, well arbitrage our impacted last not consistent technology seen is this that words the I'll the business, parts with kind That's in impact the us attack distributor that that our that expecting source. By diversion. by deal distributor This good also steps what exists. cited levers, -- year last noted of it we're reasons source where just first challenges in we in not quarter. By in trace in omnichannel hair professional is said is all distribution our source that. our some is that as diverted sales challenges. of European -- feel those at to continue is And we've marketplace similar we've that using as start about to the we say channel. and to from. what of all. the progressing the that professional international is a of be on of taking It That's the one challenge It's We of to we well EMEA a Andrea. saw the base Olaplex diverted via trend the the we're other where product we one unique and of the to year of helps weaker the quarter. do that one those opportunity brands around many with. quarter thanks is we've QX the find as and question outlook for well on what rationalization. I'll the

retail, question We spots see one-offs. look, specialty other your take on Latin well Asia, years. And in where continue I'll in like Southeast bright Japan, to Olivia, recent we've distribution expanded any as America, areas

through the back sell inventory We're to had in first good think past customer year. unison, rebalancing to I half seen particularly to here go right? bear issues now last the it's in that point come we've that in the we out of and sell

all retail first putting we through not we're one-offs with to investments, year. an that's we the to in expect pleased that specialty we're so improve progress quarter. We trend of And the report the as with seeing initiatives to channel. trend improved specialty continue And place, the retail in were actions, really in in a

Amanda Baldwin

building on Olivia, that just as well.

new Chief both a Revenue what Officer, domestically to I internationally or where the lot and have as and a their as partners, of but spent are we with I business. have well think [indiscernible], contribute these really can understanding we priorities time Stuart

a certainly through very positive, start been positive those the you'll on had conversations lot relationships, implementing believe have in conversations and we've think that I future power we the the year about that there. see they've as are the of progress of been very really and to I excited we're happening and things strongly

Olivia Tong Cheang

it. Got

stabilize When on expectations for how think you market? hit that? will how in the you long you consensus think this it -- does long does take are effectively do that the track marketing quarter. you sales for to to diversion. about it through you for talked building And the some work you're to regimen QX, take on Just of June Do

So progressing. sense year just a thought your of process get as to better trying the

Amanda Baldwin

think to continue Yes. will strengthen channels as And stabilize I we that expect the all and year three progresses.

lot through launching time. there. us a for speaking make to initiatives focuses thinking to lot a we're we're our conversations we're we're you launching, first everything know, being we're sure We've first lined year. to having I've we're sales call together that up. that of does about lot As right time to we've and we're -- it make take the of additional get marketing, certainly, quarter We certainly education spent that the in it this in a developing. how And key that getting when time what it, the taken spoke in sure put

really are year. half to a think things. see could of of about and some we'll excited very towards end coming coming back be we I bit then also up as accelerating this we little able to talked -- start as the our the QX in quickly this that's about. QX campaigns that we the end thought And have that the do through we're launches up and in do well, I

can just almost I really make the the that beginning on story. we're can So say end to future we be a will would certainly not that we for impact an of and place getting be the where brand. But this it believe what

Eric Tiziani

impact an this still build throughout just question on we we year, guidance Olivia, the year. as the year, And distributor we've that sales with our expect to we that's into through we expect and the build, consistent net one what built The have and actions your taken in progress again. rationalization

Operator

Lieberman with Our next question from Lauren Barclays. comes

Lauren Lieberman

is So curious early market. I I we're share bit why I But seeing. you know what in sales brand DTC was spoke you improving the who know -- still channels and retail -- little you're curious yet, all things growing was multi, detail is in about we're more was full talked you're on you if I do about know trends sequentially talking other just not Are think could I -- guess in me kind mode of fact-finding yet specialty you give that planning, trends olaplex.com. about yet. a in But health up sales. I you What turnaround And the or if are you that and growing given that if cited, not down, metrics is? names. the retail

retail? growing Olaplex yet at isn't why So

Eric Tiziani

what growing sell-through from half the the beginning we're talk the commenting about note trends started that really that in And seasonality. saw lapping year, the with not moment specialty or trend that year. stabilizing last accounts is dollars in of sell-through consistent we I specifically had said last year in to what the negative we lapping year. retail the prior QX reached number last course, not, of we're in trend the we we and quite of certain What this where back was only the media will adjusted is in but we've quarter point the or on noted in We're experienced start. for that we or trend, the I'll including some first back Lauren, absolute that half in sell-through of

a comping guidance So that we year. And until for point is all factor. lap get just the is the into to sheer the together way we put that built again, the

Amanda Baldwin

it been look to to thinking bit that, certainly focus in terms a and which into I about well, that both year. and things pleased the that months well at very think team just talk in forward, time about our growth and as the new you this build little we're And short spoke as a and pace moving. we've with as are is plan. as how are that on progress. about as over continuing of time those -- marketing about we're both in of X Lauren, and And long-range I'm the on we product does the is noted But as run things to continuing those new take for we're

Operator

next comes Korinne from question Our Wolfmeyer Sandler. with Piper

Korinne Wolfmeyer

And endeavors. Eric, best of your next luck in

like channel I little of what on may trending how the the this sales forward if And to of peers. I could specialty XX% that you're other you spend, much spend with on beauty on kind pull retail is if than have in then That on I -- QX? like lot see I'd marketing quantify and pulled out still math the First, we a bit sales think, of mean of about, ask of at a lower year. significantly did that marketing

a rate gives for think kind and the then we is you going forward? over that's term, Olaplex, what that, proper So the as like of that confidence longer right sustainable rate

Eric Tiziani

then you I'm and over your thank first very to take question much. Korinne, to pass it going Amanda.

simple, on number that. phasing but we're of giving wanted of some a quantification not some to helped by that additional the was disclosing on those QX the color Just retail marketing... just on but shipments, note not And that, we Amanda, specialty we're

Amanda Baldwin

On the marketing, yes.

our on sure year. make time the I the think, to rest So focused we again, first for were we planning the in that of took quarter the

-- right at noted assessing but the of it's level think as that's And But feel is we'll of are of how. this things continue We we behind bigger year, And definitely heavily anticipate terms we'll an noted our the much behind that of long-range that's before, appropriate. planning brand. rest of part important process. more So That's the the for we throughout we track in I level we invest that marketing to very on think one brand. for it's the as that the also amount investment have when I this right again, ensure certainly year. where, the we and dollars, we say would are before, like through that to

not money, go the a that equally into the of the just it's brand think point that I of the So view, focus we're spending that, and but of important. other things what lot also from aesthetics the on, about are marketing

Operator

from comes question next Escalante with Javier Evercore ISI. our And

Javier Escalante

that I you Amanda. guess mentioned, Yes. on my whether luck Eric, wonder that question of more follow-up. you touched And competitors, your I elaborate whether a Olaplex for I already assessment your spending. I drove of have the endeavors. differentiated you you ] is the But pleasure be back KXX. it of best given can a brand the how is upon and Unilever's with you the [ competitors? findings to -- with marketing coming the working Redken, in L'Oreal new versus of budgets this I'm two XX% and level understand size brand right key is the these

Amanda Baldwin

Absolutely.

think what study. to into go I on brand was more I detail heard So perception the

do it what's your are really that very lot about it of works. the the have joining to of really of on brand to of in. product of. This the a point felt science and foundation is the what consumer What as in brand their of think the was that get important a of our difference all where terms And the immediately So really the we're call that we that about think point, confidence to we is in grounded was exciting This and about that that spoke business, the first well things understanding building both going where was I building I off confirmatory that on as forward? was what people was that want terms PRO is.

a in craft to XX-year -- and the -- them we're was that We that heritage have up there PRO since help the tremendous we've their for anniversary really enhance really been coming on.

really And of about spoke that a things that first our today, about initiatives There's opportunity a the emotional on an the more science, the we're truly level. brand, we have on and building marketing also better bit true that about that is product science and the better create key we this in community. focus about something we well really lot how sure that lies explaining personal, as the believe for that also reconnecting we've is things. product to -- that that making underlying do is what as us beyond of talked delivers. think PRO PRO one for with again, quality consumer. And little the come really the I And that was as we emotional which that, there with credit really connection we the getting an the a on differentiation both again as around a then spoken brand,

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year. a at But So think right more got come on we've to this for the certainly point, lot amount we that. this

Javier Escalante

Lauren's the time, some question. misinformation This attributed social And in And very your actually to that, just assessment point just is were of misinformation factor. a At media. follow-up. helpful. wasn't some sort to the in a that declines And follow-up suggests

in brand perception equity not of the asking the is side, it's you the okay. didn't much what it Because in and is Is too the it exactly then? it stylist were feel? is work, and to consumer brand you misinformation terms what if not that pushing brand the defend the in So model if misinformation, not business

then? happened what So

Amanda Baldwin

in moment time. at certainly, a say impacted business misinformation the that the I Yes. would

in I of cultural is salience issue juncture, relevance health we difference I terms that brand would but the that, certainly the would impact. believe What what is sort this that not between at think that underlying core draw of distinction has there. is an and say versus it the brand I

a in certainly and very brands, this right you industry. It's in very being like consumer. the results excited many, grow about that, very was there important very This top we to a about Again, about many season your to carpet people is that things within bit be the we're cultural first something products, the launching are a part and that great have red out of and be quarter, continue award is the loyal a of to was to new little something strong. did and product So speaking which mind order foundation in being moments. of spoke I put of top mind that from

beauty I think is that competitive. is our category competitive,

And consumer. really mean have you So can you brand organization distinction the now. about we're that's marketing right that very quiet health can be we're on doesn't what think really with the that in underlying focused strong and the I speaking

Operator

from comes Genuity. with Susan Canaccord Anderson our And final today question

Susan Anderson

some launches this bit year a sales. talked new product to help about coming drive You out

when you trying retail door we what rollout, I also, then give of there? idea color an what guess, expect to wondering kind just about will get a be think of on some magnitude full they'll these should we certain products launch or could retailers? Just And the be if or category the in?

Amanda Baldwin

going products deliver that I level the All this the able and believe would multiple fair delivering But that capability that to at give certainly that detail believe innovation unfortunately, are for has be we will what I questions, there of won't I say is are that reasons. to forward. continue on brand but of competitive coming

at probably point, but all this I lifeblood this say of innovation brand. the So certainly that's can is

Susan Anderson

both which kind a the that then still it on and how saying I -- it consumer one still professional just continues back competition the could same, to channel? like compete seems talk and And about challenged that and bar, maybe be thoughts front back channel more lackluster channel, Okay. from it coming your to it to of going the the get are just the any if guess on Great. in spending? of just growth. in the forward Is is the is then store guess, just And you peers maybe lot of I and

Amanda Baldwin

the within I think channel. there that salon. product trends would that is is the And consumer this visits one say, long salon around twofold. purchase are to in of places are secondly, I macro front happening there certainly more is time more between are that

that think I Again, since very So on trends strategy and are think that they those that things important part that focused unique I certainly to the we're that that, to something not have the is us. context and is how -- that don't incredibly not they means channel. been supporting brand us macro us, about important again, beginning. that are is them of macro that what's appropriate this but are as It's something remains within actually thinking incredibly the PRO to

Operator

I'll closing the comments. Amanda over now floor back hand for Baldwin to

Amanda Baldwin

will much out, really your joining speaking have forward Thank everyone questions. we today you for very Olaplex, in you, to everyone, reach and with us anything all hope the additional, I We look if you and appreciate interest appreciate soon.

Operator

today's call. concludes This All Have a disconnect. parties good may day.

Olaplex (OLPX) 2 May 242024 Q1 Earnings call transcript