Financial Data and Key Metrics Changes - The company reported first-half net sales of $203 million, approximately flat year over year, with a strong adjusted EBITDA margin of 24.7% despite significant investments in marketing and personnel [69][70] - Cash flow from operations generated $18 million year to date, with a healthy balance sheet showing approximately $289 million in cash and $352 million in debt [70] - The company paid down $300 million of debt in April, unlocking an estimated $20 million in annual interest savings [70] Business Line Data and Key Metrics Changes - Year-to-date sales remained flat, but sell-through improved sequentially, albeit slowly [5] - The company launched three new innovations in the first half of 2025 compared to only one in the same period of 2024 [56] - The No. 4 and No. 5 Fine products became the top-selling prestige shampoo and conditioner in the U.S. in 2024, with new formulas tailored for fine hair addressing strength and volume concerns [58] Market Data and Key Metrics Changes - The premium hair care market is projected to grow at a CAGR of 6% to 7% from 2024 to 2028, with premium hair care representing only 20% of the overall hair care market in 2024 [7][8] - The U.S. wellness economy reached $1.8 trillion, indicating a growing consumer focus on health and wellness [9] Company Strategy and Development Direction - The company aims to broaden its addressable market by moving beyond damage repair to foundational hair health, positioning itself as an everyday choice for consumers [10][11] - The strategy is built on three pillars: generating brand demand, harnessing innovation, and executing with excellence [23] - The company is focused on building a strong emotional connection with consumers to enhance brand relevance and resilience [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's transformation progress and solid first-half results, while acknowledging the need for continued work to improve the business [24][73] - The company maintained its fiscal year guidance, expecting net sales to range from -3% to +2% compared to fiscal year 2024 [71] Other Important Information - The company announced the acquisition of Provala Bioscience, marking its first acquisition in over 10 years, aimed at developing transformative bio-inspired technologies [61] - The company has implemented AI-supported demand planning tools and enhanced data science capabilities to improve internal processes [66] Q&A Session Summary Question: What are the expectations for the second half of 2025? - The company expects second-half net sales to be more weighted towards the fourth quarter, with third-quarter net sales anticipated to decline by high single digits year over year, offset by strong high single-digit growth in the fourth quarter [71][72] Question: How is the company addressing international markets? - The company is reorganizing its international teams by key geographies and accounts, implementing a tiered approach to focus investments in high-potential markets while maintaining global consistency [68][69] Question: What is the company's approach to innovation? - The company plans to leverage over 10 years of experience in developing breakthrough innovations, aiming for two to three strategic product launches annually, supported by consumer education and stylist engagement [56][55]