Financial Data and Key Metrics Changes - The company reported first half net sales of approximately $203 million, which is flat year over year, with strong adjusted EBITDA margins of 24.7% despite significant investments in marketing and personnel [74][76] - The company ended the second quarter with approximately $289 million in cash and $352 million in debt, having generated $18 million in cash from operations year to date [75][76] - Inventory was approximately $78.3 million, down from $100.2 million at the end of the previous year [75] Business Line Data and Key Metrics Changes - The company launched three new innovations in 2025 compared to only one in 2024, including a scalp longevity treatment and a wash care system tailored for fine hair [56][58] - The new product launches have been well received, with Olaplex's five Bond Maintenance Conditioner and four Bond Maintenance Shampoo being the top-selling prestige hair launches in 2025 [59] Market Data and Key Metrics Changes - The premium haircare market is forecasted to grow at a 6% to 7% CAGR from 2024 to 2028, with premium haircare representing only 20% of the overall hair care market in 2024 [10][11] - The company is well-positioned to benefit from the ongoing premiumization trend in the hair care category [11][12] Company Strategy and Development Direction - The company’s strategy is built on three pillars: moving beyond damage repair, empowering professionals, and adding emotional resonance to the brand [13][26] - The company aims to broaden its addressable market by shifting product development and messaging to position Olaplex as a solution for everyday foundational hair health [13][14] 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 that more work is needed to balance immediate improvements with long-term positioning [78] - The company maintained its fiscal year guidance, expecting net sales to range from a decline of 3% to an increase of 2% compared to fiscal year 2024 [76] Other Important Information - The company announced the acquisition of Bioscience, marking its first acquisition since its launch over ten years ago, which aims to develop transformative, bio-inspired technologies [62] - The company has implemented an AI-supported demand planning tool and enhanced data science capabilities to improve internal processes [68][69] Q&A Session Summary Question: What are the expectations for financial results in the second half of the year? - 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 [76][77] Question: How is the company addressing its international market strategy? - The company has categorized its international markets into partner-led, direct investment, and lighter touch markets to focus investments where growth potential is highest [71][73] Question: What is the company's approach to innovation moving forward? - The company plans to leverage its R&D capabilities to launch two to three strategic products annually, supported by consumer education and stylist engagement [55][56]

Financial Data and Key Metrics Changes - First quarter net sales were $97 million, a decline of 1.9% year over year, but ahead of internal expectations [10][30] - Adjusted EBITDA was $25.7 million, representing a margin of 26.5%, down from 35.9% a year ago [32][33] - Cash and cash equivalents increased to $580.9 million from $507.5 million in Q1 of fiscal 2024 [34] - Inventory decreased to $79.2 million, down $15.5 million from Q1 of fiscal 2024 [34] Business Line Data and Key Metrics Changes - Specialty retail sales grew 12% year over year to $38.6 million, driven by strong retailer support [31] - Professional channel sales declined 10.9% to $34.5 million, primarily due to softness in international markets [31] - Direct to consumer sales decreased 7.2% to $23.9 million, aligning with a strategy to reduce promotional intensity [32] Market Data and Key Metrics Changes - North America showed modest growth, while international sales declined year over year but were better than expected [11][30] - The U.S. represented 51% of total net sales, with international sales making up 49% [36] Company Strategy and Development Direction - The company introduced the "Bonds and Beyond" strategy, focusing on foundational hair health and innovation [7][8] - Strategic priorities include generating brand demand, harnessing innovation, and executing with excellence [13][22] - The company aims to enhance emotional connections with consumers and expand its product offerings [9][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of the beauty category despite macroeconomic challenges [48][49] - The company reaffirmed its 2025 guidance, expecting net sales to range from a decline of 3% to an increase of 2% compared to fiscal 2024 [41][40] - Management acknowledged the ongoing transformation and the need for disciplined execution [30][29] Other Important Information - The company invested $18.1 million in non-payroll sales and marketing, an increase of $4.8 million year over year [17] - The company paid down $300 million in debt, reducing its gross leverage ratio from around seven times to four times [34][40] Q&A Session Summary Question: Insights on DTC channel performance and customer engagement - Management noted a deliberate strategy shift in the DTC channel, focusing on promotional activity during key moments [46] - They remain optimistic about the DTC channel's role in the overall strategy [48] Question: Changes in outlook due to macro trends - Management reiterated confidence in the beauty category's resilience and the company's long-term vision [49] Question: Marketing initiatives and KPIs - Management highlighted early positive KPIs from the new marketing campaign, indicating strong engagement [57] Question: Specialty retail channel performance and inventory health - Management confirmed healthy inventory levels and attributed specialty retail growth to strong retailer support [63] Question: Promotional strategy across channels - Management emphasized a strategic approach to promotions, using them selectively rather than broadly [75] Question: Marketing spend cadence for the year - Management indicated that marketing spend would increase in the second quarter and continue throughout the year [98] Question: Tariff impact and inventory planning - Management expects minimal impact from tariffs and is proactively managing inventory levels [35][39]

Financial Data and Key Metrics Changes - First quarter net sales were $97 million, a decline of 1.9% year over year, but ahead of internal expectations [10][31] - Adjusted EBITDA was $25.7 million, representing a margin of 26.5%, down from 35.9% a year ago [33] - Cash and cash equivalents increased to $580.9 million from $507.5 million in Q1 of fiscal 2024 [35] - Inventory decreased to $79.2 million, down $15.5 million from Q1 of fiscal 2024 [35] Business Line Data and Key Metrics Changes - Specialty retail sales grew 12% year over year to $38.6 million, driven by strong retailer support [32] - Professional channel sales declined 10.9% to $34.5 million, largely due to softness in international markets [32] - Direct to consumer sales declined 7.2% to $23.9 million, aligning with a strategy to reduce promotional intensity [33] Market Data and Key Metrics Changes - North America saw modest growth, while international sales declined year over year but were better than expected [11][31] - The U.S. represented 51% of total net sales, with international sales making up 49% [36] Company Strategy and Development Direction - The company is focusing on a "Bonds and Beyond" strategy to position itself as a foundational health and beauty company [6][7] - Strategic vision is based on three pillars: moving beyond damage repair, empowering professionals, and creating emotional connections with consumers [8][9] - Plans to launch two to three strategic products annually, supported by strong consumer education and stylist engagement [22] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the beauty category's resilience despite macroeconomic challenges [49] - The company is committed to executing its strategy and maintaining its 2025 guidance, reflecting confidence in its long-term vision [29][41] - Management acknowledges the ongoing complexity of operating through change but sees early signs of progress in transformation efforts [30] Other Important Information - The company invested $18.1 million in non-payroll sales and marketing, an increase of $4.8 million year over year [17] - The company has reduced outstanding debt by $300 million, lowering its gross leverage ratio and unlocking estimated annual interest savings of $20 million [35] Q&A Session Summary Question: Insights on DTC channel customer acquisition and retention - Management noted a deliberate strategy change in the DTC channel, focusing on using promotions strategically during key moments [47][48] Question: Changes in outlook due to macro trends - Management remains optimistic about the beauty category's resilience and reiterated guidance for the year [51][52] Question: Marketing initiatives and KPIs - Management highlighted early positive KPIs from the new marketing campaign, indicating a focus on emotional connections with consumers [59][60] Question: Specialty retail channel performance and inventory - Management confirmed healthy inventory levels and attributed specialty retail growth to strong retailer support and belief in the brand's future [65][66] Question: Promotional strategy across channels - Management clarified that the strategy to reduce promotional intensity applies across all channels, focusing on strategic use during critical moments [76][78] Question: Marketing spend cadence for the year - Management indicated that marketing spend would increase in the second quarter, with a focus on executing the brand strategy [101] Question: Tariff impacts and inventory planning - Management expects any tariff impacts to be modest and is proactively managing inventory to mitigate potential issues [36][41]