Olaplex missed Wall Street’s sales forecast in the third quarter ended Sept. 30 as investments in marketing have not yet led to an increase in demand. The miss sent the stock down around 15 percent to $1.52 in midmorning trading.
The hair care brand’s net sales decreased 3.6 percent to $119.1 million over the quarter, below Wall Street estimates of $127 million.
Within that, professional sales fell 12.6 percent to $42.2 million and specialty retail sales dropped 1.3 percent to $42.6 million. There was one bright spot, though, as direct-to-consumer sales increased 6.8 percent to $34.3 million.
Net sales are now forecast to come in at between $405 million and $415 million for the year as a whole, down from the prior estimate of between $435 million and $463 million as the company anticipates weaker performance from its international business.
At the same time, it has not yet witnessed the increase in demand it had anticipated after the deployment of new sales and marketing investments.
Net income decreased 27.3 percent over the quarter. Adjusted diluted earnings per share was 4 cents, in line with Wall Street estimates.
Of the results, Amanda Baldwin, Olaplex’s chief executive officer, said: “This year has been dedicated to transformation. While we have seen meaningful progress against our strategic goals, we have revised our outlook for fiscal year 2024 as the trajectory of our transformation has shifted, with a particular focus on the realignment of our international business.”
