OLPX - Olaplex beats Q1 top and bottom line estimates; initiates Q2 and updates FY23 outlook

2023-05-09 06:49:55 ET

• Olaplex press release ( NASDAQ: OLPX ): Q1 Non-GAAP EPS of $0.05 beats by $0.01 .
• Revenue of $113.8M (-38.9% Y/Y) beats by $3.61M .
• Fiscal 2023 guidance: Net Sales of $563M - $634M vs. consensus of $592.09M; Adjusted Net Income of $176M - $224M; Adjusted EBITDA of $261M - $322M.
• Second Quarter 2023 Net Sales :
  • The Company expects net sales in the second quarter of 2023 to modestly improve on a sequential basis from the first quarter of 2023, and remain down significantly compared to a year ago.
  • The Company expects that this anticipated decline compared to the prior year period will primarily be attributable to reduced baseline level of customer demand, as well as a result of net sales in the prior period of approximately $22 million related to the Company’s introduction of 1-Liter size offerings of certain of its products and net sales of approximately $10 million made to customers during the second quarter of 2022 in advance of the Company’s price increases which became effective as of July 1, 2022.
• Second Half 2023 Net Sales:
  • In the second half of 2023, the Company expects net sales to benefit compared to the first half of 2023 from the impact of new product introductions, additional distribution gains, and improvements in customer demand due to the Company's increased investments in sales, marketing and education.
• Gross Profit Margin:
  • The Company anticipates an approximate 300 to 400 basis point decline in gross profit margin in 2023 compared to 2022 as a result of expected increases in warehousing and distribution costs and anticipated deleveraging from lower sales volume, which is expected to more than offset the positive impacts of cost savings and price increases implemented in the second half of 2022.
• Adjusted EBITDA phasing:
  • The Company expects Adjusted EBITDA margin in the range of approximately 46.4% to 50.8% for fiscal year 2023, assuming the fiscal 2023 net sales and Adjusted EBITDA ranges reflected in the fiscal 2023 guidance above.
  • The Company anticipates Adjusted EBITDA margins below this level in the first half of the year, with the most contraction in the second quarter of 2023, but higher than this rate in the second half of 2023 driven primarily by an expected improvement in net sales during that period.
• Interest Expense:
  • The Company expects net interest expense to be approximately $40 million during fiscal year 2023, which includes net impacts from short-term investments of the Company's cash and cash equivalents balance.
• Adjusted Income Tax:
  • The Company expects an adjusted effective tax rate of approximately 20% for fiscal year 2023.

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