Olaplex Holdings, Inc.

Greetings and welcome to the Olaplex Holdings, Inc. Second Quarter 2025 Earnings Results Conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Michael Oriolo, Vice President of Investor Relations. Please go ahead.

Good morning, everyone. Welcome to our second quarter fiscal 2025 earnings call. Joining me today are Amanda Baldwin, Chief Executive Officer, and Katherine Dunleavy, Chief Operating Officer and Chief Financial Officer. Before we start, I would like to remind you that management will make certain statements today, which are forward-looking, including statements about the outlook for the Olaplex business and other matters referenced in the company's earnings release issued today. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied by such statements. Additional information regarding these factors appears under the heading, cautionary note regarding forward-looking statements in the company's earnings release and the filings the company makes with the Securities and Exchange Commission that are available at .sec.gov and on the Investor Relations section of the company's website at .olaplex.com. The forward-looking statements on this call speak only as of the original date of this call, and we undertake no obligation to update or revise any of these statements. Also, during this call, management will discuss certain non-GAAP financial measures which management believes can be useful in evaluating the company's performance. The presentation of non-GAAP financial measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. You will find additional information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures in the company's earnings release. A live broadcast of this call is also available on the Investor Relations section of the company's website at .olaplex.com. Additionally, during this call, management will refer to certain data points, estimates, and forecasts that are based on industry publications or other publicly available information, as well as our internal sources. The company has not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information. Furthermore, this information involves assumptions and limitations, and you are cautioned not to give undue weight to these estimates. For today's call, Amanda will start by providing highlights of our second quarter performance and discuss the progress we have made on our strategic areas of focus. Then, Katherine will discuss our financial results and outlook. Following this, we will turn the call over to the operator to conduct the question and answer session. With that, I will now turn the call over to Amanda.

Good morning, everyone. Thank you, Mike, and welcome to the Olaplex team. Mike brings over 15 years of investor relations and financial services experience, including leadership roles at Shake Shack and multiple years covering the consumer sector as both a public market and private equity investor. I look forward to you all getting to meet him as he partners with myself and the rest of the Olaplex team at this pivotal time in our ongoing transformation. We're pleased to share second quarter results that marked continued progress in our transformation journey. As I have said consistently since day one of joining Olaplex, remains important to recognize that your transformations are rarely linear, especially those that are as broad as ours. Such in all parts of our organization and business model. We are encouraged by the signs of progress here to date. And we also recognize that there remains more work ahead as we balance improving the business in the immediate term but simultaneously positioning Olaplex for sustainable long-term success. Through our team's tireless execution of our bonds and beyond strategy, we delivered a solid first half of the year and encouraged by our progress. As we enter into the second half of 2025, remain focused on delivering the results we guided to at the outset of the year and further laying the foundation for our ongoing transformation. Before diving into our strategic progress, here is a summary of our second quarter results. Net sales of 106.3 million up .3% year over year. With adjusted EBITDA of 24.6 million, a margin of 23.1%. Turning to our performance by channel. In professional, we are seeing early traction from our pro first efforts driven largely by our US business. Specialty retail sales were down in the quarter. However, our sell through at key retailers improved sequentially versus first quarter levels as we were beginning to see the benefits from our marketing investments. -to-consumer led our performance with sales rising low double digits aided by a favorable response to our upgraded olaplex.com site and strategy to consolidate promotions into key head-pull moments. Now let me discuss the execution of our strategy and an update on our progress year to date. As a reminder, we have three strategic priorities for 2025. First, generate brand demand. Second, harness innovation. And third, execute with excellence. First, generate brand demand. Year to date, we have invested 45.4 million in non payroll sales and marketing. An increase of approximately 14.6 million over the same period last year, while still generating strong 24.7 adjusted EBITDA margins. In the second quarter, we were number one in EMV across prestige haircare and are pleased this investment is driving improvement in sell through and other leading indicators of long-term brand health. Generating demand requires building a brand and a marketing engine, which we view as being implemented in three stages. First, building the brand baseline. Second, creating a brand platform. And third, building an ongoing content engine. We began 2025 by building the brand baseline, making fundamental changes in how olaplex shows up for professionals and for consumers, presenting a new more elevated, emotionally resonant and pro first visual identity, while still maintaining our scientific core. In late February, we unveiled this new look in the US, featuring a revamped website designed to elevate storytelling, education and commerce. We also rolled out a refreshed in-store visual merchandising at key retail and pro partners, launched a revitalized social media strategy and enhanced our presence at professional trade shows, upgraded boost designs and engagements. Our new brand identity has now been rolled out across most of our markets, with plans to be completed across the entire globe by the end of the year. In April, we moved to the brand platform stage of our development with the launch of Design to Defy. This new platform captures both our history and our future with a philosophy of innovation, creativity and confidence.