Olaplex Holdings saw sales fall across the board in its first quarter, but beat Wall Street forecasts.
The hair care brand specializing in bond building’s net sales came in at $113.8 million in the first quarter ended March 31, down 38.9 percent year over year. Analysts polled had forecast $110 million.
Within that, the professional channel drew in $48.4 million, down 37.2 percent; specialty retail was $34.9 million, down 45.8 percent; and direct to consumer was $30.5 million, down 31.9 percent. Net sales decreased 60.3 percent in the U.S.
Adjusted diluted EPS was 5 cents, as compared to 13 cents for the first quarter 2022. This came in above Wall Street estimates for 4 cents.
According to the company, it was negatively impacted by a few factors, including lower demand for core products. The first quarter of 2023 was negatively impacted by approximately $21 million of inventory rebalancing at certain key professional and specialty retail customers, as expected.
Another factor at play has been a lawsuit against Olaplex where several plaintiffs have claimed they have sustained personal injuries to their hair and scalp, including hair loss and damaged hair, something chief executive officer JuE Wong has vehemently denied on social media.
In a statement Wong described 2023 as the brand’s reset year.
“Our first quarter results were in line with our expectations and we made progress on the priority actions for our reset year. We delivered high impact innovation and made important investments in sales, marketing and education that are expected to strengthen our business and extend our leadership in the prestige hair care category,” she said.
“While we recognize that we are in the early stages of this plan achieving its intended results, we remain confident that our competitive differentiators and the execution of our priorities will enable Olaplex to return to consistent and sustained sales growth at continued top-tier profitability in the future.”