OLPX Q2 Deep Dive: Transformation Efforts Continue Amid Mixed Channel Dynamics

Hair care company Olaplex (NASDAQ:OLPX) announced better-than-expected revenue in Q2 CY2025, with sales up 2.3% year on year to $106.3 million. The company expects the full year’s revenue to be around $420.5 million, close to analysts’ estimates. Its non-GAAP profit of $0.01 per share was in line with analysts’ consensus estimates.

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StockStory’s Take

Olaplex’s second quarter was met with a negative market reaction, as investors focused on the company’s declining operating margin and mixed performance across sales channels. Management acknowledged ongoing challenges, particularly in specialty retail, where sales remained under pressure despite sequential improvements in sell-through. CEO Amanda Baldwin described the quarter as a period of “continued progress in our transformation journey” but cautioned that results are not yet linear, given the wide-reaching changes underway. The direct-to-consumer business was a bright spot, benefitting from improved marketing and website upgrades.

Looking ahead, Olaplex’s guidance is shaped by the execution of its Bonds and Beyond strategy, with management committed to balancing short-term improvements and long-term brand health. CEO Amanda Baldwin emphasized that the company’s marketing and innovation investments are being managed with a “test-and-learn mindset,” aiming to create a more effective cadence of product launches and promotional events. CFO Catherine Dunleavy noted that the timing of sales is expected to shift, with heavier weighting toward the fourth quarter, and highlighted the ongoing need for agility in resource allocation as the transformation continues.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to increased marketing investments, the launch of new products, and progress in restructuring both professional and international operations.

• Marketing investment impact: The company increased non-payroll sales and marketing spend by approximately $14.6 million year-to-date versus last year, driving improved brand awareness and sequential sell-through in key retail partners, while supporting a 24.7% non-GAAP adjusted EBITDA margin.
• Direct-to-consumer strength: DTC sales posted low double-digit year-over-year growth, fueled by upgrades to the olaplex.com website, a consolidated promotional calendar, and enhanced storytelling and educational content for consumers.
• Professional channel initiatives: Early traction from the Pro FIS (Focused Impact Strategy) and market blitz events in select U.S. cities led to improved engagement with salon professionals and supported 12.1% year-over-year professional channel growth for the quarter.
• New product innovation: Three new products were launched in the first half of the year, including a scalp longevity treatment and specialized “FINE” hair formulations, marking a step forward in Olaplex’s goal of expanding its SKU lineup and entering high-growth niches like scalp care.
• International business reset: The company opened a London office, reorganized its international team by geography, and began implementing a tiered approach to partnerships and direct investments, aiming for more sustainable and consistent growth outside North America.

Drivers of Future Performance

Management’s outlook for the remainder of the year centers on disciplined marketing, a structured innovation calendar, and the planned reset of global go-to-market strategies.

• Strategic marketing cadence: The company is shifting its promotional strategy to focus on “tentpole” events, such as Friends and Family sales and Black Friday/Cyber Monday, rather than frequent, ongoing discounts. This approach is intended to drive customer engagement while preventing margin erosion, though it may create quarter-to-quarter sales variability.
• Product pipeline and innovation: Olaplex expects to launch additional new products in the second half of the year, targeting both professionals and consumers. Management believes these innovations can expand the brand’s relevance beyond damage repair to broader hair health, supporting future revenue streams.
• Channel and geographic transformation: The ongoing transformation of international operations, including distributor rationalization and the tiered market approach, is expected to gradually improve overseas performance. However, management acknowledged that the timing and impact of these changes remain uncertain, and that macro trends—such as fewer salon visits due to consumer preferences—could persist as a headwind.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will watch (1) whether new product launches and marketing campaigns sustain direct-to-consumer momentum, (2) progress in resetting international operations and partnerships for more consistent growth, and (3) improvements in specialty retail performance as inventory levels normalize and sell-through rates stabilize. The ability to execute a more disciplined promotional strategy without further margin compression will be a key marker of success.

Olaplex currently trades at $1.31, down from $1.40 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).

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