Olaplex (OLPX -1.38%), the prestige haircare brand known for its bond-building technology, released its second-quarter results on August 7, 2025. The company reported GAAP net sales of $106.3 million for Q2 FY2025, exceeding analyst estimates of $100.3 million. However, GAAP diluted earnings per share missed expectations, coming in at a GAAP EPS loss of $0.01, compared to the anticipated profit of $0.02. This quarter was marked by higher costs, notably in selling, general, and administrative expenses, which led to a net loss. Despite the revenue beat and improvements in certain channels, overall results showed margin contraction and a swing to negative earnings, making this a mixed quarter for the company.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| Revenue (GAAP) | $106.3 million | $100.3 million | $103.9 million | 2.3% |
| Diluted EPS (GAAP) | $(0.01) | $0.02 | $0.01 | (200.0%) |
| Adjusted EBITDA | $24.6 million | $32.1 million | (23.4%) | |
| Adjusted EBITDA Margin | 23.1% | 30.8% | (7.7) pp | |
| Adjusted Gross Profit Margin | 73.2% | 71.9% | 1.3 pp |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About Olaplex and Its Strategic Priorities
Olaplex is best known for creating haircare products that feature proprietary bond-building technology. Its products are developed for both professional stylists and consumers, and are distributed across professional salons, digital platforms, and retail stores. Innovation has been the company’s core, with a focus on scientific advancements in the haircare space, such as its signature Bis-aminopropyl diglycol dimaleate and ongoing investments in formulations like Bond Shaping Technology™.
Recently, Olaplex has concentrated on five central pillars: continuous product innovation, leveraging professional hairstylist relationships, expanding distribution channels, navigating intense prestige category competition, and international expansion. Success for the business depends on its ability to differentiate through technology, maintain strong professional endorsements, execute on omnichannel sales, and respond quickly to market trends. Its international presence and new product launches are also shaping its long-term growth profile.
Notable Quarter Developments: Channel Mix and Margin Pressures
The second quarter showed diverging performance across Olaplex's primary sales channels. Professional channel GAAP net sales rose 12.1% to $37.4 million. This channel provides products specifically designed for use in salons and to serve professional cosmetologists. Direct-To-Consumer (DTC) net sales increased 12.8% to $38.5 million.
By contrast, Specialty retail GAAP revenue dropped 16.7% to $30.4 million.
Adjusted gross profit margin (non-GAAP) improved by 1.3 percentage points compared to Q2 2024. However, Selling, general, and administrative expenses increased 45.1% compared to Q2 2024, with GAAP selling, general, and administrative expenses jumping 45.1% to $65.9 million. The increase included $8.1 million in litigation-related legal fees, as well as higher investments across marketing and staffing. As a result, Adjusted EBITDA margin, a key measure of operating profitability, dropped sharply from 30.8% to 23.1% (non-GAAP) in Q2 FY2025 versus Q2 FY2024. GAAP net loss reached $7.7 million, showing the strain that rising costs placed on the bottom line.
Regionally, Olaplex saw U.S. GAAP net sales increase 2.5%, while International GAAP net sales grew 1.9%. International markets comprised approximately 50% of total sales in 2024, so even modest growth rates in those territories are significant. The company reiterated its commitment to "developing regional strategies," but did not provide specific new milestones, launches, or geographic market updates in this quarter’s release.
From a capital structure perspective, The company repaid $300.0 million in long-term debt ahead of schedule in May 2025, using its cash reserves. This voluntary repayment reduced total long-term debt to $351.9 million as of June 30, 2025, and cut leverage, but also lowered cash on hand by $296.7 million in the first half of 2025 since year-end. GAAP inventory levels rose only slightly from $75.2 million at December 31, 2024, to $78.3 million at June 30, 2025.
Looking Ahead: Outlook and Considerations
Management maintained its full-year FY2025 outlook for net sales of $410 million to $431 million. Adjusted gross profit margin (non-GAAP) is forecast at 70.5% to 71.5% for FY2025, with adjusted EBITDA margin (non-GAAP) expected at 20% to 22% for FY2025. The company also signaled a high single-digit decline in sales for Q3 FY2025, followed by an anticipated high single-digit increase in Q4 FY2025. These projected swings are linked to the timing of new product launches and shipment cycles, though the company has not provided further quarterly guidance beyond these statements.
Going forward, key areas for investors to monitor include the outcome of ongoing cost control initiatives, progress on product innovation, and sales channel mix. With no dividend and continued investments in marketing and legal matters, the company’s profitability and financial flexibility remain under close watch.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
