OLAPLEX HOLDINGS, INC. Q4 FY2024 earnings call

• Three 2024 transformation priorities: maximizing sales/marketing/education impact, strengthening capabilities/culture, developing long-term roadmap.
• Highlights: Launched No. 5 Leave-In Conditioner which outperformed expectations; had the number one set in US prestige hair care during 2024 holiday; added key executives (CMO, CRO, etc.); expanded lab for innovation; started brand vision strategy; rationalized international distributors to align with brand values.

In the fourth quarter of 2024, Olaplex reported net sales of $100.7 million and adjusted EBITDA of $17.5 million. For the fiscal year 2024, net sales totaled $422.7 million, a decline of 7.8% from 2023, and adjusted EBITDA was $129.7 million with an adjusted EBITDA margin of 30.7%. By channel: Specialty retail had Q4 sales up 5.7% to $28.8 million; D2C channel sales decreased 2.5% Y/Y; professional channel sales declined 27.1% Y/Y.

• 2025 net sales expected to be between -3% to +2% vs 2024.
• Adjusted gross margin expected to remain strong at 70.5% to 71.5%.
• Adjusted EBITDA margin between 20% to 22% as investing in marketing and talent to support 2025 strategic priorities.

• Headwinds from international business reset affecting performance.
• Marketing investment taking longer than expected to boost demand.
• Competitive holiday season leading to increased promotional intensity.

Q: Susan Anderson asked about the professional channel and international business.

A: Amanda Baldwin stated the professional channel is important as a revenue-generating and marketing engine, with focus on product, support, and community; on international, it's a methodical country-by-country process with focus on great partners and effective execution.

Q: Olivia Tong inquired about growth drivers for 2025.

A: Amanda Baldwin mentioned innovation (e.g., scalp product), brand work, and execution as critical drivers; Catherine Dunleavy added focus on three priorities (generate brand demand, harness innovation, execute with excellence) and progress against these will drive growth.

Q: Katie from TD Cowen asked about marketing investments.

A: Amanda Baldwin said brand building takes time, emphasizing balanced marketing funnel and aggressive investment in US business; Catherine Dunleavy added focus on 2025 renewed strategy and leveraging learning to optimize spend.