Olaplex Holdings, Inc. Q4 FY2025 earnings call

Key managerial messages include: - Brand health and volume: In December 2025, positive sell-through in key accounts. Intend to build on momentum in 2026 by positioning heroes as the definitive choice, upgrading and expanding core assortments, and elevating science meets style positioning. - Science-based innovation: Focused on fueling innovation in 2026, refining R&D and new product development processes to address consumer and professional needs, and expecting more innovation than in 2025. - Diversified go-to-market model: Plan to capitalize on professional momentum, deepen point of sale partnerships, and scale global reach through a three-tiered international strategy. Also, first activations of 2026 center on icons number one, two, and three; relaunched Pro Focus number one and number two; unveiled Number 3 Plus; launched campaign 'Science Never Looks So Good'; and coordinated unified global launch for Number 3+ with refreshed packaging.

For 2025, net sales were 423.0 million, flat year-over-year. Fourth quarter net sales were 105.1 million, up 4.3% year-over-year. Professional channel: increased 18.9% year-over-year in the quarter to 36.8 million, net sales up 5.5% for the year. Specialty retail: declined 14.5% year-over-year in the quarter to $24.7 million, net sales down 8.3% for the year. Direct-to-consumer: increased 6.6% year-over-year to 43.6 million in the quarter, net sales up 3.1% for the year. U.S. net sales down ~3% in 2025, international sales up ~3%. Adjusted gross profit margin for the quarter was 70.6%, up 200 basis points year over year. Fiscal year 2025 adjusted gross margin was 71.8%, a 40 basis point improvement. Adjusted SG&A was 61.4 million for the quarter, $211.4 million for the year, an increase of $40.8 million year-over-year. Adjusted EBITDA was $12.9 million for the quarter, 12.2% margin; for the year, $93.9 million, 22.2% margin.

Expect net sales in the range of approximately minus 2% to plus 3% versus fiscal year 2025. Adjusted gross profit margin between 71% and 72%. Adjusted EBITDA margin of 21% to 22%. Guidance assumes no material impact from tariffs. First quarter sales to land below full-year guidance range on a percentage basis compared to prior year. EBITDA significantly pressured in first quarter due to marketing investment for Number 3 Plus, but expect sell-through to improve sequentially later in the year. Marketing efficiency expected to improve year over year for remaining of the year. Non-sales and marketing operating expense expected to increase as analyze 2025 investments in people and processes.

Q: Susan Anderson from Canaccord Genuity asked about discrepancy in specialty retail and DTC, first quarter and year cadence, and major launches.

A: Specialty retail outperformed expectations in fourth quarter with sell-through improving; first quarter revenue below guidance range and EBITDA significantly pressured due to marketing investment for Number 3 Plus, but expect sell-through to improve sequentially later in the year.

Q: Sydney Wagner from Jefferies asked about additional verticals across beauty, timing, opportunity, and share gain.

A: Amanda mentioned innovation is key, with Hero SKUs like Number 3 Plus being important, and there's a robust innovation pipeline with multi-year calendar.

Q: Owen Rickert from Northland Capital Markets asked about professional channel strong performance and international markets.

A: Professional channel strong due to innovation, supporting pro, Blitz program, education overhaul; international strategy managed as global flywheel, no specific regional breakdown.

Q: Olivia Tong from Raymond James asked about top line progression and cadence.

A: First quarter revenue driven by different innovation shipments compared to 2025, with strategic phasing of Number 3 Plus launch.

Q: Kate Grafstein from Barclays asked about prestige hair care category development and scaled player benefit.

A: Prestige hair care category less developed historically due to channel definition, but consumer interest in hair and science is growing, and Olaplex is well-positioned.

Q: Andrea Teixeira from JPMorgan asked about distribution, sell-through, and consumption.

A: No pull forward in Number 3 Plus launch, product looks great on shelf, and pleased with investments in visual merchandising.