Olaplex outlines 2025 guidance for 20%-22% adjusted EBITDA margin as new product launches gain traction

Earnings Call Insights: Olaplex Holdings, Inc. (OLPX) Q3 2025

MANAGEMENT VIEW

*
CEO Amanda Baldwin opened the call highlighting that "third quarter results...exceeded our expectations," with improvement in sell-through trends coinciding with the Hair Mask launch and the company's first fully coordinated 360-degree marketing campaign. Baldwin emphasized that "net sales of $114.6 million, down 3.8% year-over-year, yet better than our expectations, partially driven by earlier timing of shipments," and noted adjusted EBITDA of $30.8 million with a margin of 26.9%. She described three strategic priorities for 2025: generating brand demand, harnessing innovation, and executing with excellence, with recent investments in brand and marketing showing early positive results.

*
Baldwin discussed the successful late August launch of two new hair masks, stating this was "the most integrated product launch in our history, with full 360-degree execution." These products received positive consumer response, averaging a 4.7-star review and bringing new customers to the brand, while Circana data placed Olaplex's 2025 hair product launches as the top three sellers in prestige hair for Q3.

*
The acquisition of Purvala Bioscience was announced, targeting future innovation by developing "transformative bio-inspired technologies with applications across health and beauty industries." Baldwin stated, "with Purvala, we have the potential to create the next generation of disruptive science-backed product innovation."

*
COO & CFO Catherine Dunleavy stated, "We delivered strong results this quarter with both top and bottom line performance ahead of our expectations," and reported, "professional increased 5.3% year-over-year in the quarter to $44.5 million," while specialty retail and direct-to-consumer sales declined as anticipated. Adjusted gross profit margin reached 71.5%, up 70 basis points year-over-year, attributed to improved promotional management. Dunleavy reiterated the full year 2025 guidance and highlighted continued positive cash flow and effective working capital management.

OUTLOOK

*
The company reiterated full-year 2025 guidance: net sales in the range of minus 3% to plus 2% versus fiscal year 2024, adjusted gross margin between 70.5% and 71.5%, and adjusted EBITDA margin of 20% to 22%. Dunleavy indicated, "Our outlook considers earlier timing of sales that benefited the third quarter, and we are mindful of the uncertain macro backdrop into holiday."

*
Management noted expected channel shifts, with professional benefiting from international realignment but retail and DTC facing headwinds from planned industry destocking and weakening consumer sentiment.

FINANCIAL RESULTS

*
Net sales for Q3 were $114.6 million, a 3.8% decrease year-over-year. Adjusted EBITDA for the quarter was $30.8 million, representing a 26.9% margin. Year-to-date adjusted EBITDA is $81.0 million, a 25.5% margin. Year-to-date by region, U.S. net sales declined approximately 4%, while international sales increased approximately 2%.

*
The company ended the quarter with cash and cash equivalents of $286.4 million and debt of $352.1 million. Inventory was $73.3 million, down from $85.9 million in the prior year period.

Q&A

*
Susan Anderson, Canaccord Genuity: Asked about the impact of earlier-than-expected orders on Q3 and implications for Q4 and annual guidance. Catherine Dunleavy responded, "We are pleased to be able to reaffirm our guidance for the third consecutive quarter...we did see some earlier-than-expected shipments in the third quarter, which we think could impact the fourth quarter...these orders came in, in September that we thought might come in, in October."

*
Anderson also asked about the Purvala acquisition and product pipeline. CEO Baldwin replied that innovation would balance immediate and longer-term developments, stating, "There are some things that will take longer...a strong innovation platform has both immediacy to it as well as things that are bigger bets that take time."

*
Lillian Moffett, Raymond James: Inquired about holiday setup and promotional environment. Baldwin said, "Our marketing organization is ready...we really have started to hit our stride in terms of our ability to deliver the right content at the right place at the right time." Regarding promotions, she noted flexibility to respond to market conditions during Black Friday and Cyber Monday.

*
Jungwon Kim, TD Cowen: Asked about ongoing investments and pricing strategy for next year. Baldwin highlighted the company's focus on refining its marketing engine and building long-term brand equity, while Dunleavy emphasized that the company is "still in the midst of a multiyear transformation" and not yet ready to define the future investment base.

*
Javier Escalante Manzo, Evercore ISI: Sought clarity on U.S. and international sell-out, market share dynamics, and the impact of increased competition on channels like Amazon. Dunleavy acknowledged, "second and third quarter had relatively consistent sell-through trends" and confirmed that current sell-out lags the broader market growth. Baldwin stressed the importance of the company's Pro-first distribution strategy and multi-channel approach.

SENTIMENT ANALYSIS

*
Analysts' tone was cautiously optimistic but probing, focusing on the sustainability of recent performance, the impact of macroeconomic uncertainty, and the competitive environment. Questions emphasized risks from order timing, market share, and promotional pressures.

*
Management maintained a confident and measured tone in prepared remarks and Q&A, repeatedly emphasizing control over internal execution and the multiyear nature of the transformation. Baldwin was upbeat about early indicators and progress but acknowledged, "We're in the middle of a transformation...these things are not linear, and they're not overnight."

*
Compared to the previous quarter, both analysts and management sustained a slightly positive but cautious sentiment, with management appearing incrementally more confident due to successful product launches and international execution.

QUARTER-OVER-QUARTER COMPARISON

*
Guidance language was consistent, with annual targets reaffirmed for the third consecutive quarter. The company continued to stress execution over short-term variability and highlighted ongoing progress in innovation and marketing.

*
The strategic focus shifted from brand platform and content engine building in Q2 to full-scale execution and integrated launches in Q3, particularly with the hair mask campaign and Purvala acquisition.

*
Analysts in both quarters focused on channel dynamics, market share, and investment cadence, but Q3 featured more direct questions regarding the timing of orders and channel headwinds.

*
Key metrics showed net sales declining in Q3 after growth in Q2, with professional channel growth offset by declines in specialty retail and DTC. Inventory continued to improve, and cash flow remained positive.

*
Management's confidence in the transformation and innovation pipeline appeared stronger in Q3, supported by data from successful product launches and brand health trackers.

RISKS AND CONCERNS

*
Management highlighted macroeconomic uncertainty, particularly into the holiday season, with Dunleavy stating, "Consumer sentiment is increasingly uncertain as we head into the critical holiday season."

*
Planned industry destocking and potential timing shifts in orders were flagged as risks, especially for the DTC channel.

*
Analysts raised concerns about the company's ability to regain market share in a growing prestige hair care market and the sustainability of recent improvements given competitive pressures and evolving channel dynamics.

FINAL TAKEAWAY

Olaplex management underscored that its third quarter outperformance was driven by strong execution of coordinated product launches and foundational investments in brand and innovation. The company reaffirmed its full-year guidance and highlighted early signs of brand strength, successful new product introductions, and positive international momentum, while remaining vigilant amid macroeconomic headwinds and channel shifts. The strategic priorities remain focused on delivering long-term, profitable growth, supported by a robust innovation pipeline and a multi-channel approach to market execution.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/olpx/earnings/transcripts]

MORE ON OLAPLEX

* Olaplex Holdings, Inc. (OLPX) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4839861-olaplex-holdings-inc-olpx-q3-2025-earnings-call-transcript]
* Olaplex Holdings, Inc. 2025 Q3 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4839351-olaplex-holdings-inc-2025-q3-results-earnings-call-presentation]
* Olaplex: The Comeback Stock Of 2026? [https://seekingalpha.com/article/4824731-olaplex-comeback-stock-of-2026]
* Olaplex GAAP EPS of $0.02 beats by $0.02, revenue of $114.6M beats by $4.28M [https://seekingalpha.com/news/4517128-olaplex-gaap-eps-of-0_02-beats-by-0_02-revenue-of-114_6m-beats-by-4_28m]
* Seeking Alpha’s Quant Rating on Olaplex [https://seekingalpha.com/symbol/OLPX/ratings/quant-ratings]