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The call highlights meaningful progress in brand relaunch, professional channel reengagement, a robust innovation pipeline (including the No. 3+ launch), improved gross margins, and positive operating cash flow. However, these achievements are tempered by notable margin compression versus prior year, a flat full‑year top line, continuing annual sell‑through weakness, specialty retail declines, and near‑term EBITDA pressure due to front‑loaded marketing and elevated operating spend. Management frames the moves as deliberate investments to stabilize and accelerate long‑term growth, while 2026 guidance is cautious and front‑weighted toward second‑half improvement.
Management guided fiscal 2026 net sales of approximately -2% to +3% versus fiscal 2025 (FY‑2025 net sales $423.0M), adjusted gross profit margin of 71%–72% (FY‑2025 adj. gross margin 71.8%; Q4 70.6%, +200 bps YoY), and adjusted EBITDA margin of 21%–22% (FY‑2025 adj. EBITDA $93.9M, 22.2%; Q4 adj. EBITDA $12.9M, 12.2%); they expect sell‑through to improve sequentially and turn positive for the year but caution Q1 sales will be below the full‑year cadence and Q1 EBITDA will be “significantly pressured” due to front‑loaded marketing supporting the No. 3+ launch, with marketing efficiency improving later in the year, non‑S&M operating expense rising as 2025 investments annualize, and the outlook assuming no material tariff impact (cash $318.7M, debt $352.3M, inventory $60.2M).
Net sales were flat at $423.0M for fiscal 2025, stabilizing after declines of 35% in 2023 and 8% in 2024; company exited the year with improving sell-through trends and positive December sell-through in key accounts.
Q4 net sales were $105.1M, up 4.3% year over year, led by strong holiday performance across professional and DTC channels.
Professional channel net sales in Q4 increased 18.9% year over year to $36.8M; professional channel net sales grew 5.5% for the full year as management reengaged pros via blitz activations, education, and backbar offerings.
DTC grew 6.6% year over year in Q4 to $43.6M and 3.1% for the year, driven by a revamped digital strategy, strong holiday/wash-and-shine kit performance, and outperformance on TikTok Shop.
Adjusted gross profit margin was 70.6% in Q4, up 200 basis points YoY; fiscal 2025 adjusted gross margin was 71.8% (up 40 bps). The company generated positive operating cash flow of $58.7M for the year and ended the quarter with $318.7M in cash.
Adjusted EBITDA for fiscal 2025 was $93.9M representing a 22.2% margin. Management describes this margin range as a stabilized base for executing the transformation and long-term growth.
Brand relaunch produced measurable gains: brand awareness +7%, sentiment +3%, earned media value +14%; engaged ~4,000 creators and generated ~2 billion impressions during 2025 campaigns.
Company delivered four of the top five prestige hair care launches (Circana) in 2025, launched No. 3+, claims of clinically proven results (3x stronger, 3x softer after one three-minute use), and completed acquisition of Pervala Bioscience to expand bio‑inspired innovation and white space opportunities.
Inventory decreased to $60.2M from $75.2M in 2024 (down $15.0M), reflecting improved working capital management amid transformation efforts.
Greetings, and welcome to the Olaplex Holdings, Inc. Fourth Quarter 2025 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Michael Oriolo, Vice President of Investor Relations. Thank you. You may begin.
Good morning, everyone. Welcome to our fourth quarter fiscal 2025 earnings call. Joining me today are Amanda Baldwin, Chief Executive Officer, and Catherine Dunleavy, Chief Operating Officer and Chief Financial Officer. Before we start, I would like to remind you that management will make certain statements today are forward-looking, including statements about the outlook for the Olaplex Holdings, Inc. 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 www.sec.gov and on the Investor Relations section of the company's website at ir.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 stateme...