OLPX - Olaplex stock plunges on weak 2023 guidance

Olaplex ( NASDAQ: OLPX ) stock slid sharply on Tuesday after forecasting a “reset" year ahead for the business.

The hair care products company posted a mixed Q4 report, narrowly beating bottom line estimates, but falling short on the top line. Net sales decreased 28% in the United States and 13.4% internationally as compared to Q4 2021. Additionally, specialty retail revenue was nearly halved from the year prior.

“As expected, the fourth quarter represented a challenging end to fiscal 2022 reflecting the rapidly changing market dynamic that began mid-year,” CEO JuE Wong said. “Our priorities in 2023 are to reset our base and invest in our core to provide a more powerful platform for growth.”

However, full-year guidance also fell well short of expectations. A net sales guide of between $563M and $634M was well short of the $736.1M consensus expectation. An adjusted net income forecast of between $176M and $224M, below the $273.3 consensus. The company anticipates an approximate 300 to 400 basis point decline in gross profit margin in 2023 compared to 2022 amid persistent inflationary impacts.

The year is expected to start off rocky as well, with Q1 sales expected to decline 41% as compared to 2022. The “continued negative impact from inventory rebalancing at certain professional and specialty retail customers” will hit sales by $25M in the quarter. Trends are projected to turn by the second half of the fiscal year.

Shares of Olaplex plummeted 7.6% shortly after the print .

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