Olaplex Holdings, Inc. reported a decline in financial performance for the third quarter and the first nine months of 2024 compared to the same periods in 2023. For the three months ended September 30, 2024, net sales were $119.1 million, a decrease of 3.6% from $123.6 million in Q3 2023. Year-to-date (YTD) net sales for the nine months ended September 30, 2024, totaled $321.9 million, down 7.1% from $346.6 million in the prior year. The decrease in sales was attributed to lower demand, particularly in the professional channel, which saw a 12.6% decline, while the specialty retail channel decreased by 1.3%. However, the direct-to-consumer (DTC) channel experienced a 6.8% increase.
Gross profit margins improved slightly, rising from 67.6% in Q3 2023 to 68.6% in Q3 2024, primarily due to reduced inventory write-offs for product obsolescence. Despite this, operating income fell to $28.0 million in Q3 2024 from $36.7 million in Q3 2023, and YTD operating income decreased to $63.9 million from $91.1 million. Net income for Q3 2024 was $14.8 million, down from $20.4 million in the same quarter of 2023, while YTD net income dropped to $28.3 million from $47.5 million.
Operating expenses increased by 14.8% in Q3 2024 compared to the previous year, driven by higher advertising, marketing, and distribution costs. The effective tax rate also rose to 24.7% in Q3 2024 from 22.4% in Q3 2023, influenced by non-deductible stock compensation and state income taxes.
As of September 30, 2024, Olaplex reported cash and cash equivalents of $538.8 million, an increase from $466.4 million at the end of 2023. Total assets rose slightly to $1.76 billion from $1.74 billion, while total stockholders’ equity increased to $879.7 million from $845.0 million. The company’s long-term debt decreased to $645.0 million from $649.0 million.
Strategically, Olaplex is focusing on enhancing brand awareness through marketing initiatives and expanding its product offerings, with plans to launch 2-4 new products annually over the next three years. The company is also monitoring macroeconomic factors that may impact consumer spending, including inflation and competitive activity in the beauty industry.
About OLAPLEX HOLDINGS, INC.
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