Olaplex Q3 2024 Earnings: Navigating International Challenges

Olaplex Holdings, Inc. (OLAPLEX), a leading hair care company, reported its third-quarter 2024 earnings on November 7, 2024. The company's financial performance was marked by a revision in its fiscal year 2024 guidance, primarily driven by weaker performance from its international business. This article delves into the key aspects of Olaplex's Q3 2024 earnings, the challenges faced by its international business, and the company's strategies to drive long-term growth.

**Key Financial Metrics**

Olaplex's third-quarter 2024 results showed a decrease in net sales of 3.6% year-over-year, with net income and adjusted net income declining by 27.3% and 13.8%, respectively. The company's adjusted EBITDA margin also decreased to 37.5% from 41.7% in the same period last year. The nine-month results for 2024 reflected a 7.1% decrease in net sales, with adjusted net income and adjusted EBITDA declining by 20.8% and 18.9%, respectively.



**International Business Challenges**

Olaplex's international business accounted for 55% of its net sales in 2023. However, the company's actions to simplify and realign its international operations have led to weaker performance in the international market. This realignment has contributed to a reduction in net sales guidance from $435-$463 million to $405-$415 million, a decrease of approximately $30 million. Additionally, adjusted net income and adjusted EBITDA guidance have been reduced by around $13 million and $26 million, respectively.



**Strategies for Long-Term Growth**

To improve its international business performance and drive long-term growth, Olaplex is focusing on three primary factors. First, the company is simplifying its international business model to improve efficiency and effectiveness. Second, Olaplex is investing in new sales and marketing efforts to boost demand for its products. Lastly, the company is building a best-in-class executive team to lead its transformation efforts. By implementing these strategies, Olaplex aims to strengthen its international business and deliver consistent, sustained growth.

**Conclusion**

Olaplex's Q3 2024 earnings reflect the challenges faced by its international business, which has led to a revision in the company's fiscal year 2024 guidance. Despite these setbacks, Olaplex remains committed to building a healthier business and driving long-term growth. The company's strategic focus on simplifying its international operations, investing in sales and marketing, and building a strong executive team positions it to capitalize on its powerful brand and continue its growth trajectory. As an investor, it is crucial to monitor Olaplex's progress in navigating these international challenges and capitalizing on its growth opportunities.