Financial Data and Key Metrics Changes - For Q4 2024, the company reported net sales of $100.7 million, a decline of 9.8% from the same quarter last year [33] - Full-year net sales were $422.7 million, representing a decline of 7.8% from 2023, with adjusted EBITDA at $129.7 million and an adjusted EBITDA margin of 30.7% [15][32] - Adjusted gross profit margin for Q4 was 68.6%, down from 70.6% in Q4 2023, impacted by higher promotional activity and warehousing costs [38] Business Line Data and Key Metrics Changes - Specialty retail sales in Q4 increased by 5.7% to $28.8 million compared to Q4 2023, driven by improved North America sell-through during the holiday season [36] - Direct-to-consumer (D2C) channel sales decreased by 2.5% year-over-year, with growth at olaplex.com offset by strategic international rationalization [37] - Professional channel sales declined by 27.1% year-over-year, reflecting the company's focus on partnering with fewer but stronger international distributors [38] Market Data and Key Metrics Changes - The company regained the number one position in earned media value among US hair care brands in December [21] - Olaplex had the number one set in US prestige hair care during the 2024 holiday season according to Circana data [18] Company Strategy and Development Direction - The company is focused on three transformation priorities: maximizing sales and marketing impact, strengthening capabilities and culture, and developing a long-term roadmap [15][22] - The strategic vision, "Bonds and Beyond," aims to move beyond damage repair to foundational hair health, empowering professionals and creating emotional connections with consumers [49][54] - The company plans to invest aggressively in talent and marketing to support its 2025 strategic priorities, which include generating brand demand, harnessing innovation, and executing with excellence [44][59] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2024 was a year of transformation with net sales and adjusted EBITDA below 2023 levels, but expressed confidence in future growth driven by marketing investments and product innovation [13][44] - The company expects net sales in 2025 to range from a decline of 3% to an increase of 2% compared to 2024, with a focus on North America leading performance [45][94] Other Important Information - The company ended 2024 with a strong balance sheet, cash and cash equivalents increased to $586 million from $466.4 million at the end of fiscal 2023 [42] - Inventory declined by 20.7% to $75.2 million, reflecting improved operating discipline [42] Q&A Session Summary Question: Insights on the professional channel and competition - Management emphasized the importance of the professional channel as both a revenue source and marketing vehicle, noting the need for effective product support and community building [78][81] Question: International business distributor strategy - Management is focused on rationalizing partnerships with fewer, stronger distributors to enhance international growth, emphasizing the importance of effective partnerships [87][90] Question: Fiscal 2025 outlook and product readiness - Management expressed confidence in product innovation and brand positioning to drive demand, with a focus on execution and marketing effectiveness [98][100] Question: Marketing investments and customer acquisition - Management noted that brand building takes time and emphasized a balanced marketing approach to create long-term brand demand [110][112] Question: Trends in the professional channel and international strategy - Management indicated stabilization in professional channel trends post-COVID and highlighted the need for localized strategies in international markets [120][126] Question: Pricing strategy and customer reactions - Management discussed a thoughtful approach to pricing, balancing innovation with maintaining gross margins while responding to customer feedback [132][134]