Q1 2024 Olaplex Holdings Inc Earnings Call

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Greetings and welcome to the all the Plex Holdings first quarter 2024 earnings results Conference call. At this time, all participants are in a listen only mode.

Operator: Greetings and welcome to the Olaplex Holdings First Quarter 2024 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Patrick Flaherty, Vice President, Investor Relations. Thank you.

Operator: A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Operator: As a reminder, this conference is being recorded.

Operator: It is now my pleasure to introduce your host Patrick Flaherty Vice President Investor Relations. Thank you you may begin.

Patrick Flaherty: Thank you and good morning. Joining me today are Amanda Baldwin, Chief Executive Officer, and Eric Tiziani, Chief Financial Officer. Before we start, I would like to remind you that management will make certain statements today that are forward-looking, including statements about the outlook for Olaplex's business and other matters referenced in the company's earnings release issued today. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected in or implied by such statement.

Patrick Flaherty: Thank you and good morning, joining me today are Amanda Baldwin, Chief Executive Officer, and Eric to Viani, Chief Financial Officer.

Patrick Flaherty: Additional information regarding these factors appears under the heading Cautionary Note Regarding Forward-Looking Statements, in the company's earnings release, and in the filings the company makes with the Securities and Exchange Commission, which are available at www.sec.gov, and on the Investor Relations section of the company's website at ir.olaplex.com. The forward-looking statements on this call speak only as of the original date of this call, and we undertake no obligation to update or revise any of these statements.

Patrick Flaherty: Before we start I'd like to remind you that management will make certain statements today, which are forward looking including statements about the outlook for the Texas business and other matters referenced in the company's earnings release issued today.

Patrick Flaherty: Each forward looking statement is subject to risks and uncertainties that could cause actual results could differ materially from those projected in or implied by such statements.

Patrick Flaherty: Additional information regarding these factors appears under the heading cautionary note regarding forward looking statements.

Patrick Flaherty: In the company's screens release and in the filings the company makes with the Securities Exchange Commission.

Patrick Flaherty: Are available at Www Dot FCC Dot Gov.

Patrick Flaherty: And on the Investor Relations section of the company's website at IR Dot all Plex dotcom.

Patrick Flaherty: Forward looking statements on this call speak only as of the original date of this call and we undertake no obligation to update or revise any of these statements.

Patrick Flaherty: Also, during this call, management will discuss certain non-GAAP financial measures that management believes can be useful in evaluating the company's performance. However, the presentation of non-GAAP financial measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. You will find additional information regarding these non-GAAP financial measures, and a reconciliation of these non-GAAP financial measures to the most directly comparable gap measures in the company's earnings release. A live broadcast of this call is also available on the investor relations section of the company's website at ir.olaplex.com.

Patrick Flaherty: Also during this call management will discuss certain non-GAAP financial measures, which management believes can be useful in evaluating the company's performance.

Patrick Flaherty: The presentation of non-GAAP financial measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Patrick Flaherty: You'll find additional information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP financial measures.

Patrick Flaherty: For the most directly comparable GAAP measures in the company's earnings release.

Patrick Flaherty: A live broadcast of this call is also available on the Investor Relations section of the company's website at IR, that's all Plex dotcom.

Patrick Flaherty: Additionally, during this call, management will refer to certain data points, estimates, and forecasts that are based on industry publications or other publicly available information, as well as our internal sources. However, the company has not independently verified the accuracy or completeness of the data contained in the industry publications and other publicly available information. Furthermore, this information involves assumptions and limitations, and you are cautioned not to give undue weight to these estimates.

Patrick Flaherty: Additionally, during this call management will refer to a certain data points estimates and forecasts that are based on industry publications or other publically available information as well as our internal sources.

Patrick Flaherty: The company has not and if somebody verified the accuracy or completeness of the data contained in the industry publications and other publicly available information.

Patrick Flaherty: Furthermore, this information about assumptions limitations and you are cautioned not to give undue weight to this estimate.

Patrick Flaherty: With that I will now turn the call over to Amanda.

Amanda G. Baldwin: Thank you, Patrick. Good morning, everyone, and thank you for joining us. Today, we reported first quarter financial results that represent a solid start to the year, while internally, we've been making good progress on the business transformation plan we outlined in February. As discussed on our last earnings call, we view 2024 as a year aimed at delivering stabilization in the business, while we continue to prioritize the strategies that are designed to build a stronger foundation and put us on a trajectory to generate consistent sales and profit growth.

Patrick Flaherty: Thank you Patrick.

Speaker Change: Everyone and thank you for joining US today, we reported first quarter financial results, representing a solid start to the year all internally, we've been making good progress on the business transformation plan, we outlined in February.

Amanda G. Baldwin: Discussed on our last earnings call with the 'twenty 'twenty four and the year aimed at delivering stabilization in the business I would continue to prioritize the strategies that are designed to build a stronger foundation and put us on a trajectory to generate consistent sales and profit growth.

Amanda G. Baldwin: While this journey will take some time, I am encouraged by the steps forward we are making and remain excited about the future of this business. We are intently focused on capitalizing on the power of the Olaplex brand with its unique qualities, its extraordinary technical foundation and the differentiated science which delivers superior product performance, its innovative products that are sought after by a passionate global community of stylists and consumers, and its advantageous business model.

Amanda G. Baldwin: I'll be starting will take some time I'm encouraged by the steps for it we are making I remain excited about the future, but that's not we are intently focused on capitalizing on the power of the brand with its unique quality.

Amanda G. Baldwin: Extraordinary technical foundation, and the differentiated fire, which deliver superior product performance.

Amanda G. Baldwin: Innovative products that are sought after by a passionate global community of stylus and consumer and its advantage business model at the same time. We are also taking actions that are designed to build and maintain the long term health of the business, even if they have a negative short term impact.

Amanda G. Baldwin: At the same time, we are also taking actions that are designed to build and maintain the long-term health of the business, even if they have a negative short-term impact. As mentioned last quarter, we are limiting new distribution this year to allow for a greater focus on our existing customers and current channels, as well as rationalizing some accounts where we find evidence that the distributors were the source of diverted products.

Amanda G. Baldwin: As mentioned last quarter, we are limiting new distribution this year to allow for a greater focus on our existing customers and current channel as well as rationalizing some accounts, but we find evidence that the distributor I spent the sources for that product.

Amanda G. Baldwin: Turning to the highlights for the first quarter, we reported net sales slightly above the high end of our guidance, driven by earlier than expected timing of shipments in our specialty retail channel. And we reiterated our outlook for the year. Additionally, our brand health metrics among prestige hair care consumers showed continued industry-leading strength consistent with previous quarters. According to our external brand tracker, Olaplex is ranked number one or number two for all of the top 18 most important premium hair care equities, which include Best for My Hair, Makes Hair Healthier, Recommended by Stylists, and a brand I'm excited to talk about.

Amanda G. Baldwin: Turning to the highlights for the first quarter, we reported net sales slightly above the high end of our guidance range driven by earlier than expected timing of shipments and our specialty retail channel and we reiterated our outlook for the year. Additionally.

Amanda G. Baldwin: Additionally, our brand health metrics among prestige hair care consumers showed continued industry, leading trainer consistent with previous quarters.

Amanda G. Baldwin: According to our external brand tracker all blacks is ranked number one or number two all of the top 18, most important premium hair care equity, which include best for my hair makes her healthier recommended by stylists and our brand I'm excited to talk about it.

Amanda G. Baldwin: We continue to be a category leader at scale, as Olaplex had four of the top five best-selling SKUs in Prestige Hair in the first quarter of 2024, first in Urcona's retail tracking data for the U.S. hair market, and remained a top brand and key account across all three of our distribution channels. As it relates to our transformation, we are right on track with where we expected to be at this stage in our journey.

Amanda G. Baldwin: We continue to be a category leader at scale at all parks had four of the top five best selling skus in prestige hair in the first quarter of 2020 for coarser contents, we tell tracking data the U S market.

Amanda G. Baldwin: Named a top brand in key accounts across all three of our distribution channel.

Amanda G. Baldwin: As it relates to our transformation, we are right on track with where we expect it to be at this stage in our journey support.

Amanda G. Baldwin: Supported by a strong foundation, I feel confident about the future direction we are taking. Throughout each conversation I've had in more than four months since joining the company, professional stylists and consumers, customers, and partners are highly engaged with our brand and our business. We're receiving very favorable feedback regarding the actions we are taking, and I'm optimistic that these conversations will culminate in future growth opportunities. All of this work is enabled by our passionate and talented team that's committed to executing against our priorities.

Amanda G. Baldwin: Supported by a strong foundation I feel confident about the future direction, we are taking.

Amanda G. Baldwin: Throughout each conversation I've had over more than four months since starting the company professional stylists and consumer customers and partners are highly engaged with our brand and our business.

Amanda G. Baldwin: It's getting very favorable feedback regarding the actions, we are taking and I'm optimistic that these conversations will culminate in future growth opportunity.

Amanda G. Baldwin: All of this work has enabled by our passionate and talented team that is committed to executing against our priority.

Amanda G. Baldwin: On our last earnings call, we introduced three key strategic priorities for 2024, which include maximizing the impact of our sales, marketing, and education investments to generate demand; strengthening our Capabilities and Culture to Support the Future; and developing the long-term roadmap and future vision for Olaplex. The first quarter included noteworthy accomplishments towards these goals on pace with the execution that we expected.

Amanda G. Baldwin: On our last earnings call, we introduced three key strategic priorities for 'twenty 'twenty, four which include maximizing the impact of our sales marketing and education investments to generate demand.

Amanda G. Baldwin: Strengthening our capabilities and culture to support the future.

Amanda G. Baldwin: And developing a long term roadmap and future vision.

Amanda G. Baldwin: The first quarter included noteworthy accomplishments towards these call on pace with the expectation that we expected.

Amanda G. Baldwin: Let me walk you through the progress we have made on these additions. In our efforts to maximize the impact of our sales, marketing, and education investments to generate demand, our initial focus is providing seamless execution on implementing brand building activities that drive awareness, conversion, and sell-through. Our goal is to sustain a more balanced, full-funnel marketing approach this year and remain focused on ROI and optimizing our spend for the best performing channels and assets. At the core of this priority is returning to our stylistic roots and recreating meaningful connections with our pros.

Amanda G. Baldwin: Let me walk you through the progress we've made on these initiatives.

Amanda G. Baldwin: And our efforts to maximize the impact of our sales marketing and education investments to generate demand. Our initial focus is providing seamless execution on implementing brand building activities that drive awareness conversion and sell through.

Amanda G. Baldwin: Our goal is to sustain a more balanced full funnel marketing approach. This year, all remain focused on ROI and optimizing our spend for the best performing channel and asset.

Amanda G. Baldwin: At the core of this priority is returning for stylus route and re creating meaningful connections with our pros.

Amanda G. Baldwin: Olaplex would not be the brand it is today without the trust and support of stylists, and we are committed to enabling and empowering their craft and helping them succeed and grow their businesses. We've increased the frequency of our participation at industry trade shows and sales events sponsored by our distributors and have established a greater presence at these events to expand the coverage of our internal field sales and education teams to engage with salons directly and ensure our team's close connection with the field teams of our partners.

Amanda G. Baldwin: Oh, plus would not be the brand. It is today without the trust and support of stylists, and we are committed to enabling and empowering their craft and helping them succeed and grow their businesses.

Amanda G. Baldwin: We've increased the frequency of our participation in industry trade shows and sales events sponsored by our distributors I never established a greater presence at these events.

Amanda G. Baldwin: We're expanding coverage of our internal field health and education into engagements along directly and then Charles can close connection with the field teams and our partners for.

Amanda G. Baldwin: We're developing new educational materials, curriculum, and content to provide scholars with knowledge and expertise about our science and technology, and our consumer engagement team has placed an increased focus on engaging and partnering with influencers and the pro stylist community. Deepening our relationship with this important group allows them to speak from an expert perspective about the benefits of Olaplex to their highly engaged pro and consumer audience. One exciting marketing activation in the first quarter was our campaign highlighting our best-selling Olaplex No. 7 bonding oil. To celebrate Olaplex No. 7's position as the No.

Amanda G. Baldwin: We're developing new educational materials curriculum and content provides pilots with the knowledge and expertise about our science and technology.

Amanda G. Baldwin: And our consumer engagement team placed increased focus on engaging and partnering with influencers in the pro Stylus community keep.

Amanda G. Baldwin: Deepening our relationship with this important group allows them to speak from an export perspective about the benefits or blocks that are highly engaged pro and consumer audiences.

Amanda G. Baldwin: One exciting marketing activation in the first quarter was our campaign highlighting our best selling older Flex number had been bonding while.

Amanda G. Baldwin: Celebrate all class number seventh position as the number one prestige hair oil in 2023. According to start kind of data that campaign introduced a new activation and creator led marketing strategy.

Amanda G. Baldwin: 1 prestige hair oil in 2023, according to Cercana data, the campaign introduced a new activation and creator-led marketing strategy. By inserting the brand into culturally relevant moments in compelling ways, we drove brand awareness and generated a combined total of more than 3 billion earned media impressions, demonstrating our relevance as a brand and future potential in our marketing efforts. Looking ahead, we intend to further evolve our marketing messages and aim to better articulate the strength of Olaplex science and our commitment to professional stylists.

Amanda G. Baldwin: By inserting the branded culturally relevant moments and compelling way what drove the brand awareness and generated a combined total of more than 3 billion earned media impressions, demonstrating our relevance as a brand and future potential in our marketing efforts.

Amanda G. Baldwin: Looking ahead, we intend to further evolve our marketing messages and aimed to better articulate the strength of old Buck by them and our commitment to professional stylists.

Amanda G. Baldwin: To that end, in the coming months, we expect to launch a new campaign to enhance the positioning of our core SKUs and highlight the benefits of a complete Olaplex routine. We also plan to introduce activations that celebrate our pro community as we celebrate our own 10th anniversary as a brand. Our second priority is to strengthen our capabilities and culture to support our future. This work is designed to improve the foundational infrastructure across our organization.

Amanda G. Baldwin: To that end in the coming months, we expect to launch a new campaign to enhance the positioning of our core skus and highlight the benefits of a complete all opex routine.

Amanda G. Baldwin: We also plan to introduce Activations that celebrate our pro community as we celebrate our 110 year anniversary as a brand.

Amanda G. Baldwin: Our second priority is to strengthen our capabilities and culture to support our future.

Amanda G. Baldwin: Work is designed to improve the foundational infrastructure across our organization.

Amanda G. Baldwin: This includes the ongoing implementation of our enhanced integrated business planning processes created with the help of an external third-party expert to better improve forecasting and overall business performance management. Additionally, we created an internal centralized workstream overseeing marketing investments across channels for more strategic spending and optimization. We also opened a small office space in New York City, which will allow teams from all functional areas across our organization to come together and collaborate in an in-person setting.

Amanda G. Baldwin: This includes the ongoing implementation of our enhanced integrated business planning processes created with the help of an external third party expert to better improve forecasting and overall business performance management.

Amanda G. Baldwin: Additionally, we created an internal centralized work stream overseeing marketing investments across channels for more strategic spending and optimization.

Amanda G. Baldwin: We also opened a small office space in New York City, which will allow came from all functional areas across our organization to come together and collaborate in an in person setting.

Amanda G. Baldwin: We believe this will further strengthen our corporate culture and allow us to build upon the speed and agility with which Olaplex has been able to operate. Importantly, we continue to forge ahead on our third priority of developing the long-term roadmap and future vision for Olaplex. This work is ongoing and includes a thorough assessment of our market opportunity, refining our brand identity, driving innovation, and leveraging our omni-channel business platform. We recently undertook an in-depth brand perception study embedded in category consumer and customer insights that confirm the strong foundation for Olaplex and will act as a guide for the evolution of our brand identity, messaging, and design. Encouragingly, there's a strong base of consumer and stylist passion for our brand and enthusiasm for what we will do next. Certainly, a solid foundation that I believe we can build off of.

Amanda G. Baldwin: We believe this will further strengthen our corporate culture and allow us to build upon the speed and agility with which all of us have been able to operate.

Amanda G. Baldwin: Importantly, we continue to forge ahead on our third priority of developing a long term roadmap and future vision for all of this work is ongoing and includes a thorough assessment of our market opportunity, we're finding our brand identity driving innovation and leveraging our omni channel business platform.

Amanda G. Baldwin: We recently undertook an in depth brand perception study and better than category consumer and customer insights that come from the strong foundation for all of our.

Amanda G. Baldwin: I will act as a guide for the evolution of our brand identity messaging and design.

Amanda G. Baldwin: Henry there's a strong base of consumer and stylus passion for our brand and enthusiasm for what we will do next certainly a solid foundation that I believe we can build off of.

Amanda G. Baldwin: Additionally, we have formed a dedicated innovation team charged with accelerating our new product development. By leveraging existing executive leadership and bringing in new talent, we have created a more robust, integrated development function to lead the ongoing creation of our new product pipeline. This team is also charged with developing enhanced commercialization strategies for new product launches in 2025 and beyond. Now, as a brand with a proven global track record, we also continue to identify and see significant opportunities to expand our business around the world.

Amanda G. Baldwin: Additionally, we have formed a dedicated innovation team charged with accelerating our new product development.

Amanda G. Baldwin: Virginia existing executive leadership, and bringing in new talent, we have created a more robust integrated development function to lead the ongoing creation of our new product pipeline.

Amanda G. Baldwin: This team is also charged with developing enhanced commercialization strategies for new product launches in 2025 and beyond.

Amanda G. Baldwin: Now as a brand with a proven global track record. We also continue to identify and see significant opportunity to expand our business around the world.

Amanda G. Baldwin: Our new Chief Revenue Officer and I spent extensive time with our key domestic and global partners to better understand our business and their strategy. We recently traveled to Europe to meet with our local team, international distributors, and customers to begin assessing the current structure and support needs for the future. I've also spoken in depth with our partners in Asia to assess our opportunities in this region and begin to develop a roadmap for the future.

Amanda G. Baldwin: Our new Chief revenue Officer, and I spent extensive time, but our key domestic and global partners to better understand our business and their strategies.

Amanda G. Baldwin: We traveled to Europe to meet with our local team international distributors and customers to begin assessing the current structure and support needed for the future.

Amanda G. Baldwin: I've also spoken in depth with our partners in Asia to assess our opportunity in this region began to develop a roadmap for the future. The feedback from these conversations were positive and insightful I believe there is significant overlap in our goals and near term opportunities to accelerate our partnerships. We believe we have an incredible opportunity to further develop our global brand as we focus on.

Amanda G. Baldwin: The feedback from these conversations was positive and insightful. I believe there is significant overlap in our goals and near-term opportunities to accelerate our partnership. We believe we have an incredible opportunity to further develop our global brand as we focus on localized strategies that are designed to be appropriate for the unique customer and distribution channels across the world. With these components in mind, we continue with the work to establish a long-range strategic plan and financial framework for the future. In summary, we are pleased with the progress made during the first quarter. With our performance to date and the initiatives underway, we believe we are well positioned to achieve steady progress toward our goals for 2024.

Amanda G. Baldwin: Localized strategies that are designed to be appropriate for the unique customer and distribution channel across the world.

Amanda G. Baldwin: With these components in mind, we continue with the work to establish a long range strategic plan and financial framework for the future.

Amanda G. Baldwin: In summary, we are pleased with the progress made during the first quarter with our performance to date and the initiatives underway. We believe we are well positioned to achieve steady progress toward our goals for 2024.

Amanda G. Baldwin: Before I turn it over, I would like to take a moment to recognize Eric, who was previously announced as stepping down as CFO, effective May 3rd, to pursue another opportunity. On behalf of the entire team at Olaplex, I would like to thank Eric for the leadership he has provided across the organization for nearly three years. It's been a pleasure to work with him through my onboarding these last few months. I wish him all the best in the future.

Amanda G. Baldwin: Before I turn it over I would like to take a moment to recognize Eric with previously announced is stepping down as CFO effective may 3rd to pursue another opportunity.

Amanda G. Baldwin: On behalf of the entire team at <unk> I would like to thank Erik for the leadership. He has provided across the organization for nearly three years.

Amanda G. Baldwin: It's been a pleasure to work with him for my Onboarding. These last two months I wish him all the best in the future.

Amanda G. Baldwin: We also welcome Paul Kostoras, who will serve as our interim CFO following Eric's departure. Paul is a financial executive with over 30 years of experience and who specializes in interim CFO assignments. We are fortunate to have Paul on our team, and we expect a smooth transition as we search for a permanent successor. And with that, I will now pass this over to Eric.

Paul: Also welcome Paul Historic will serve as our interim CFO following Eric's departure.

Amanda G. Baldwin: Paul as a financial executive with over 30 years of experience and who specializes in interim CFO assignment.

Amanda G. Baldwin: We are fortunate to have Paul on our King we expect a smooth transition as we search for a permanent successor.

Amanda G. Baldwin: And with that I will now pass you over to Eric.

Eric Tiziani: Thank you, Amanda, and good morning, everyone. I'd like to begin by expressing my gratitude to the board and to all of the employees of Olaplex for the opportunity to lead this tremendous organization as CFO. I continue to believe in the power and the long-term potential of the Olaplex brand, and the company is at an exciting juncture under Amanda's leadership and strategic direction. I've been working closely with Paul over the past few weeks to hand off my responsibilities. And with the strong team we have in place to support him, I am confident in a smooth transition.

Amanda G. Baldwin: Thank you Amanda and good morning, everyone I'd like to begin by expressing my gratitude to the board and to all of the employees of old flex.

Eric Tiziani: Opportunity to lead this tremendous organization as CFO.

Eric Tiziani: I continue to believe in the power and the long term potential of the old Flex brand and the company is at an exciting juncture under Amanda's leadership and strategic direction.

Eric Tiziani: I've been working closely with Paul over the past few weeks to hand off my responsibilities under the strong team we have in place to support him I am confident and a smooth transition.

Eric Tiziani: Now, turning to our financial performance, we are encouraged by our results for the first quarter of 2024, which keep us on track for delivery within our full year guidance framework. Our aggregated sell-through trend at key accounts in Q1 was largely consistent with the seasonally adjusted trend that we experienced in the second half of 2023, marking a sign that demand for our products is stabilized. Net sales for the first quarter declined 13.1% year over year to 98.9 million, which slightly exceeded the high end of our first quarter guidance range that we had previously disclosed, due to a phasing of shipments in our specialty retail business

Eric Tiziani: Now turning to our financial performance, we are encouraged by our results for the first quarter of 2024.

Eric Tiziani: Which keep us on track for delivery within our full year guidance range.

Eric Tiziani: Our aggregated sell through trend at key accounts in Q1 was largely consistent with the seasonally adjusted trend that we experienced in the second half of 2023.

Eric Tiziani: Marking a sign that demand for our products is stabilizing.

Eric Tiziani: Yeah.

Eric Tiziani: Net sales for the first quarter declined 13, 1% year over year to $98 $9 million, which slightly exceeded the high end of our first quarter guidance range that we had previously disclosed due to phasing of shipments in our specialty retail business.

Eric Tiziani: As a reminder, our Q1 net sales or sell-in decline versus last year was better than the Q1 sell-through decline versus last year at Key Account, as we benefited from a weaker prior year net sales comparator due to certain customer inventory rebalancing in Q1 of 2023. This was partially offset by a negative net sales impact in Q1 2024 related to our previously announced decision to rationalize our business with certain professional distributors that we believe are the source of diverted product in the marketplace.

Eric Tiziani: As a reminder, our Q1 net sales or sell in decline versus last year was better than the Q1 sell through declined versus last year at key accounts as we benefited from a weaker prior year net sales comparator due to certain customer inventory rebalancing in Q1 of 2012.

Eric Tiziani: Three.

Eric Tiziani: This was partially offset by a negative net sales impact in Q1 2024 related to our previously announced decision to rationalize our business with certain professional distributors that we believe are the source of diverted product in the marketplace.

Eric Tiziani: As we have previously discussed in recent earnings calls, we continue to believe that the months on hand inventory position at our major accounts on our core items remains in a healthy position and that there is no inventory building in our channel. Turning to Performance by Channel.

Eric Tiziani: As we have previously discussed in recent earnings calls we continue to believe that the months on hand inventory position at our major accounts on our core items remain in a healthy position.

Eric Tiziani: And that there is not inventory building in our channels.

Eric Tiziani: Our professional channel sales of $38.7 million declined 19.9% versus a year ago, partly due to the aforementioned distributor rationalization, which primarily affects our professional business in Europe. Specialty retail sales were down 1.2% to $34.4 million and outperformed our expectations due to the earlier-than-expected sell-in of inventory in advance of our participation in key customer tentpole marketing events. Specialty retail also benefited from the weaker prior year net sales comparator related to customer inventory rebalancing.

Eric Tiziani: Turning to performance by channel.

Eric Tiziani: Our professional channel sales of $38 7 million declined 19, 9% versus a year ago.

Eric Tiziani: Partly due to the aforementioned distributor rationalization, which primarily affects our professional business in Europe.

Eric Tiziani: Yeah.

Eric Tiziani: Specialty retail sales were down one 2% to $34 4 million and outperformed our expectations due to the earlier than expected sell in of inventory in advance of our participation in key customer tentpole marketing events.

Eric Tiziani: Specialty retail also benefited from the weaker prior year net sales comparator related to customer inventory rebalancing.

Eric Tiziani: Yeah.

Eric Tiziani: The direct-to-consumer channel decreased 15.7% to $25.7 million and was impacted by the timing and phasing of shipments, more than offsetting strong performance from Olaplex.com, which grew year-over-year for the fourth consecutive quarter, and we believe is seeing positive momentum from our increased marketing investment. By geography, in the first quarter, the U.S. increased 2.5% year over year, primarily due to lapping customer inventory Our international business declined 24.3% versus a year ago, due in part to a more difficult prior year comparator and the impact of distributor rationalization, which we believe has resulted in a short-term negative impact on our volume, primarily in Europe.

Eric Tiziani: The direct to consumer channel decreased 15, 7% to $25 7 million and was impacted by the timing and phasing of shipments more than offsetting strong performance from old flex Dot com, which grew year over year for the fourth consecutive quarter and we believe you're seeing positive momentum from our.

Eric Tiziani: Increased marketing investments.

Eric Tiziani: Yeah.

Eric Tiziani: By geography in the first quarter. The U S increased two 5% year over year, primarily due to lapping customer inventory rebalancing from a year ago.

Eric Tiziani: Our international business declined 24, 3% versus a year ago due in part to a more difficult prior year comparator.

Eric Tiziani: And the impacts of distributor rationalization, which we believe has resulted in short term negative impact on our volume primarily in Europe.

Eric Tiziani: Yeah.

Eric Tiziani: Moving down the P&L, adjusted gross profit margin was 74.3%, up 170 basis points from 72.6% in the first quarter of 2023. Approximately 250 basis points of this favorability is related to lower warehouse and distribution costs, and 110 basis points is the result of lapping higher levels of inventory obsolescence reserves a year ago. This was partially offset by 110 basis points from higher promotional allowances and 80 basis points from inflation on product costs and an unfavorable product mix.

Eric Tiziani: Moving down the P&L.

Eric Tiziani: <unk> gross profit margin was 74, 3% up 170 basis points from 72, 6% in the first quarter of 2023.

Eric Tiziani: Approximately 215 basis points of this favorability as it related to lower warehouse and distribution cost.

Eric Tiziani: And 110 basis points as a result of lapping higher levels of inventory obsolescence reserves a year ago.

Eric Tiziani: This was partially offset by.

Eric Tiziani: By 110 basis points from higher promotional allowance.

Eric Tiziani: And 80 basis points from inflation on product costs and unfavorable product mix.

Eric Tiziani: Adjusted SG&A grew 13.2% to $37.2 million from $32.9 million in the first quarter of 2023. The $4.3 million increase in adjusted SG&A from the prior year is primarily the result of $1.2 million in distribution and fulfillment costs and $1 million in Investments in Sales and Marketing, with the remainder a result of lapping the workforce expansion from a year ago. During the first quarter, we spent approximately $12 million in non-payroll related marketing and advertising expenses.

Eric Tiziani: Adjusted SG&A grew 13, 2% to $37 2 million from $32 9 million in the first quarter of 2023.

Eric Tiziani: The $4 3 million increase in adjusted SG&A from prior year is primarily the result of $1 2 million in distribution and fulfillment costs.

Eric Tiziani: And $1 million and investments in sales and marketing.

Eric Tiziani: With the remainder a result of lapping the work force expansion from a year ago.

Eric Tiziani: During the first quarter, we spent approximately 12 million in non payroll related marketing and advertising expenses.

Eric Tiziani: Adjusted EBITDA declined 29.1% to $35.5 million versus $50 million in the first quarter of 2023. The adjusted EBITDA margin was 35.9%, compared to 44% a year ago. Adjusted net income decreased to $20.6 million or $0.03 per diluted share from $31.4 million or $0.05 per diluted share in the first quarter of 2023. Moving on to our balance. Inventory at the end of the first quarter was $94.6 million, down $1.3 million from $95.9 million at the end of the fourth quarter of 2023 and down $37.4 million from the first quarter of 2022.

Eric Tiziani: Adjusted EBITDA declined 29, 1% to $35 5 million.

Eric Tiziani: Versus $50 million in the first quarter of 2023.

Eric Tiziani: Adjusted EBITDA margin was 35, 9%.

Eric Tiziani: Compared to 44% a year ago.

Eric Tiziani: Adjusted net income decreased to $20 6 million or three cents per diluted share.

Eric Tiziani: From.

Eric Tiziani: $31 4 million or five cents per diluted share in the first quarter of 2023.

Speaker Change: Moving onto our balance sheet.

Eric Tiziani: Inventory at the end of the first quarter with $94 6 million.

Eric Tiziani: Down $1 3 million from $95 9 million at the end of the fourth quarter of 2023.

Eric Tiziani: And down $37 4 million from the first quarter of 2023.

Eric Tiziani: We have made good progress in reducing our levels of inventory. And while our inventory levels are healthy, we believe we have additional opportunity this year to continue lowering our inventory to target levels of months on hand. Turning to cash flow, during the first quarter of 2024, we generated $43.7 million in cash from operations. We anticipate that 2024 will be another year of healthy cash flow generation as we continue to drive an asset-light model, high profitability, and continuous improvement in our working capital position.

Eric Tiziani: We've made good progress on reducing our levels of inventory.

Eric Tiziani: Our inventory levels are healthy we believe we have additional opportunity this year to continue lowering our inventory to target levels of months on hand.

Eric Tiziani: Yeah.

Eric Tiziani: Turning to cash flow.

Eric Tiziani: During the first quarter of 'twenty 'twenty, four we generated $43 7 million in cash from operations.

Eric Tiziani: We anticipate that 2024 will be another year of healthy cash flow generation as we continue to drive an asset light model hi.

Eric Tiziani: High profitability and continuous improvement in our working capital position.

Eric Tiziani: We ended the first quarter with $507.5 million in cash and cash equivalents, up $41.1 million from the end of 2023 and an increase of $138.2 million from the first quarter of 2023. This cash is generating interest income at an annual rate above 5%. Long-term Debt, Net Current Portion, and Deferred Fees was $647.7 million.

Eric Tiziani: We ended the first quarter with $507 5 million in cash and cash equivalents.

Eric Tiziani: Up $41 1 million from the end of 2023, and an increase of $138 2 million from the first quarter of 2023.

Eric Tiziani: This cash is generated interest income at an annual rate above 5%.

Eric Tiziani: Long term debt net of current portion of deferred fees was $647 7 million.

Eric Tiziani: Now, turning to our financial outlook. As disclosed in our earnings release issued this morning, we are reiterating our outlook for fiscal year 2024 and expecting net sales in the range of $435 million to $463 million, adjusted EBITDA in the range of $143 million to $159 million, and adjusted net income in the range of $87 million to $100 million. The assumptions in our plan for the year are consistent with the details we shared on our last earnings call.

Speaker Change: Now turning to our financial outlook.

Eric Tiziani: Disclosed in our earnings release issued this morning, we are reiterating our outlook for fiscal year 2024 and expect.

Eric Tiziani: Net sales in the range of $435 million $463 million.

Eric Tiziani: Adjusted EBITDA in the range of 143 million to $159 million.

Eric Tiziani: And.

Eric Tiziani: Adjusted net income in the range of 87 million to $100 million.

Eric Tiziani: Yeah.

Eric Tiziani: The assumptions in our plan for the year are consistent with the details we shared on our last earnings call.

Eric Tiziani: Our forecast incorporates reasonably expected volume drivers on a product and account level. We continue to assume that the impact of our sales and marketing investments and our second half initiatives build on the level of demand that we've seen in the past several quarters. Let me remind you of three major volume drivers for 2024 that we shared on the last earnings call. We anticipate incremental sales contribution from new product launches this year but expect the contribution from new products in 2024 to be lower than in 2023, given the timing of key launches starting later this year.

Eric Tiziani: Our forecast incorporates reasonably expected volume drivers on our product and account level basis.

Eric Tiziani: We continue to assume that the impact of our sales and marketing investments and our second half initiatives build on the level of demand that we've seen in the past several quarters.

Eric Tiziani: Let me remind you of three major volume drivers for 2024 that we shared on the last earnings call.

Eric Tiziani: First.

Eric Tiziani: We anticipate incremental sales contribution from new product launches this year, but expect the contribution from new products in 2024 to be lower than in 2023, given the timing of key launches starting later this year.

Eric Tiziani: Second, on the distribution front, we're taking actions that are focused on our long-term success but are expected to have a negative short-term impact. This includes the decision to limit opening up new accounts in 2024 as we focus on current key customers and rationalize certain distributors and accounts that do not build brand equity, either due to off-strategy pricing or sub-distribution into unauthorized resellers.

Eric Tiziani: Second on the distribution front.

Eric Tiziani: Taking actions that are focused on our long term success, but are expected to have a negative short term impact.

Eric Tiziani: This includes the decision to constrain opening up new accounts in 2024, as we focus on current key customers.

Eric Tiziani: And rationalize certain distributors in accounts that do not build brand equity either due to off strategy pricing or sub distribution into unauthorized resellers.

Eric Tiziani: Yeah.

Eric Tiziani: And third, we expect a year over year net sales growth tailwind, particularly in the first half of the year, as we mitigate the effects of customer inventory rebalancing in 2023, which had the impact of depressing our 2023 net sales base. Specifically, for the second quarter, we expect demand trends to remain largely stable to what we experienced in Q1, adjusted for the phasing and impact of certain activities with our customers. As we move into the second half of the year, we anticipate momentum to build as our investments and initiatives land in the market.

Eric Tiziani: And third we expect a year over year net sales growth tailwind, particularly in the first half of the year as we lap the effects of customer inventory rebalancing in 2023, which had the impact of depressing our 2023 net sales base.

Eric Tiziani: Specifically for the second quarter, we expect demand trends to remain largely stable to what we experienced in Q1 adjusted for the phasing and impact of certain activities with our customers.

Eric Tiziani: As we move into the second half of the year, we anticipate momentum to build as our investments and initiatives land in the market.

Eric Tiziani: We benefit from the selling of holiday kits during the third quarter in our professional and specialty retail channels and the seasonal lift we've historically seen in the fourth quarter, particularly in our direct-to-consumer channels. And we expect a positive impact from our new product launches, given the timing of those launches. Moving down the P&L. For the full year 2024, we assume an adjusted gross margin in the range of 72.5% to 73.1%, representing an expansion of 110 to 170 basis points. This is the result of lapping higher levels of inventory obsolescence from last year and the expectation of normalized promotional levels this year as we lap promotions to move excess customer inventory last year.

Eric Tiziani: We benefit from the selling of holiday kits during the third quarter in a professional and specialty retail channels.

Eric Tiziani: And the seasonal lift we've historically seen in the fourth quarter, particularly in our direct to consumer channel.

Eric Tiziani: And we expect positive impact from our new product launches given the timing of those launches.

Eric Tiziani: Moving down the P&L.

Eric Tiziani: For the full year 2024, we assume adjusted gross margin in the range of 72.5 to 73, 1% representing.

Eric Tiziani: Representing expansion 110 to 170 basis points.

Eric Tiziani: This is the result of lapping higher levels of inventory obsolescence from last year.

Eric Tiziani: And the expectation of a normalized promotional levels. This year as we lap promotions to move excess customer inventory last year.

Eric Tiziani: In addition, we expect to benefit from our dedicated internal cost savings program, which we expect will more than offset some inflationary pressures on product. Furthermore, we expect full year 2024 adjusted SG&A expenses in the range of $172 to $179 million, an increase of $19 million to $26 million versus 2023. Roughly half of that increase versus last year is expected in organization costs, primarily from annualizing the cost of headcount additions made during 2023 and from the accrual for a normalized bonus payout in 2024.

Eric Tiziani: In addition, we expect to benefit from our dedicated internal cost savings program, which we expect will more than offset some inflationary pressures in product costs.

Eric Tiziani: Furthermore.

Eric Tiziani: We expect full year 2024, adjusted SG&A expenses in the range of $172 million to $179 million, an increase of 19 million to $26 million versus 2023.

Eric Tiziani: Roughly half of that increase versus last year as expected and organization costs, primarily from Annualizing the cost of head count additions made during 2023.

Eric Tiziani: And from the accrual for a normalized bonus payout in 2024.

Eric Tiziani: The other half of the increase is expected in our sales and marketing expenses as we invest at levels. We believe are required to return to long term growth.

Eric Tiziani: The other half of the increase is expected in our sales and marketing expenses as we invest at levels we believe are required to return to long-term growth. Specifically, we continue to expect full year non-payroll related marketing and advertising expenses to be in the range of 66 to 70 million, an increase from $16.5 million in 2023. Taken all together, we anticipate continuing to achieve top-tier industry profitability with an adjusted EBITDA margin in the range of $32.8 to 34.3%. We assume net interest expense to be approximately $32 to $34 million and an adjusted effective tax rate of approximately 19.5 to 20.5% for the year.

Eric Tiziani: Typically we continue to expect full year, non payroll related marketing and advertising expenses.

Eric Tiziani: To be in the range of $66 million to $70 million.

Eric Tiziani: An increase from $60 5 million in 2023.

Eric Tiziani: Yeah.

Eric Tiziani: Taken altogether, we anticipate continuing to achieve top tier industry profitability with adjusted EBITDA margin in the range of $32 eight.

Eric Tiziani: 34, 3%.

Eric Tiziani: We assume net interest expense to be approximately 32 to 34 million and an adjusted effective tax rate of approximately 19, 5% to 25% for the year.

Operator: In conclusion, we are pleased with the first quarter results and progress on the priorities we've set out for the year. Our efforts are driving stabilization in our sales trends, expansion and gross margin rates, and continued industry-leading profitability with strong cash flow generation. This concludes our prepared remarks. We will now turn the call back over to the operator for questions. Operator.

Eric Tiziani: In conclusion.

Eric Tiziani: We are pleased with the first quarter results and progress on the priorities, we set out for the year.

Operator: Our efforts are driving stabilization in our sales trend expansion in gross margin rate and continued industry, leading profitability with strong cash flow generation.

Operator: This concludes our prepared remarks, we will now turn the call back over to the operator for questions operator.

Operator: Thank you.

Operator: And we will now be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. Please limit yourselves to one question and one follow-up question, and then re-cue to ask additional questions. You can press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star two. One moment, please, while we pull for questions. Our first question comes from Jonna Kim with TD Cowan. Please state your question.

Speaker Change: And we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

Operator: A confirmation tone will indicate that your line is in the question queue.

Operator: Please limit yourselves to one question and one follow up question and then re queue to ask additional questions.

Operator: You can press star two to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Jungwon Kim: Our first question comes from John Kim with T D. Cowen. Please state your question.

Jungwon Kim: I think you briefly taking my question just curious on professional channel what you've been seeing.

Jungwon Kim: Lately and there's a lot of help with the salons and.

Jungwon Kim: And the Stylus and also it's just old girl beauty category, if you've seen anything noteworthy any slow down in general and then just another question on gross margin you've seen nice expansion. This quarter any reason why we shouldn't expect.

Jungwon Kim: More expansion throughout the year. Thank you so much.

Amanda G. Baldwin: Morning, nice to nice to hear your voice. So with respect to the broader consumer trends, both within pro and beauty more generally, you know, I don't think we've seen any changes from what we talked about last on our last call. So there are certainly what I'll call distribution shifts that are happening in terms of where the consumer is buying in front of the salon. But we do believe in the future of our channel and the future of the pro. As you can hear me talk about, there's certainly a lot of emphasis that we're placing on the importance of the pro across our strategy.

Jungwon Kim: Good morning.

Jungwon Kim: Nice to nice to hear your voice.

Amanda G. Baldwin: With respect to the broader consumer trends, both within pro and in beauty and more generally I don't think we've seen any changes from what we've talked about loss in last call. So there are certainly what I'll call distribution shifts that are happening in terms of where the consumer is buying in front of salon.

Amanda G. Baldwin: But we do believe in the in the future of our channel in the future of the pro as you could hear me talk about there's certainly a lot of emphasis that we're placing on the importance of the progress across our strategy, but we don't certainly see people buying products in different places as they think about that front of salon purchases, but no different for us than anyone else.

Amanda G. Baldwin: But we will certainly see people buying products in different places as they think about their front-of-salon purchases. That's no different for us than anyone else. With respect to the consumer more broadly, again, we really believe in the future of the prestige hair care category. We think there's a lot of momentum behind that, and we continue to believe that it's a great opportunity, and I'll take

Amanda G. Baldwin: With respect to the consumer more broadly and again, we really believe in the future of the prestige hair care category.

Amanda G. Baldwin: A lot of momentum behind that and they continue to believe that it's a quick.

Amanda G. Baldwin: Opportunity.

Eric Tiziani: And I'll take the gross margin question, Jonah. Hi. Good morning.

Speaker Change: Yeah I'll take the gross margin question Jonah Hi, good morning.

Eric Tiziani: Yes, we were pleased with the gross margin expansion versus the prior year that we saw in Q1, and we've guided to similar expansion for the full year. If I just build on that, we expect to see similarly high gross margins in the second quarter and fourth quarter, just for seasonality reasons. It takes a little bit of a dip in Q3 related to the selling of our holiday kits, and I would say that that close margin outlook is well supported by the progress we've been making on our savings initiatives.

Speaker Change: Yes, we were pleased with the gross margin expansion versus prior year that we saw in Q1, and we've guided to similar expansion for the full year.

Eric Tiziani: If I just build on that.

Eric Tiziani: We expect to see similarly high gross margin in the second quarter and the fourth quarter.

Eric Tiziani: Just for seasonality reasons, it takes a little bit of a dip in Q3 related to the sell in of our holiday kits and I would say that that gross margin outlook is well supported.

Eric Tiziani: Progress, we've been making on our savings initiatives. So we continue to have really good wins here.

Eric Tiziani: So we continue to have really good wins here, and just in terms of the puts and takes. You know, similar to Q1, we expect the gains versus the prior year in warehousing cost savings and in lower levels of obsolescence reserves to continue throughout the year.

Eric Tiziani: And just in terms of the puts and takes.

Eric Tiziani: Similar to Q1, we expect the games versus prior year, and warehousing cost savings and lower levels of obsolescence reserves to.

Eric Tiziani: Continue throughout the year.

Speaker Change: Thank you so much.

Operator: Our next question comes from Andrea Teixeira with J.P. Morgan. Please state your question.

Eric Tiziani: Our next question comes from Andrea to shatter with J P. Morgan. Please state your question.

Amanda G. Baldwin: Thank you, operator, and good morning to all, and thank you, Eric, for all the help and wish you the best of luck. I have one question for Amanda on consumption and a follow-up on international distributors. First on consumption, Amanda, how are the trends as you exit the quarter, in particular in light of what we have heard from your peers and from one of your customers? And second, on the international market commentary, I appreciate that you were reducing and streamlining, but international was a big decline. When should we expect you to do that, and how far are we in the innings of reorganizing and rethinking about how to go to market internationally? Thank you. Thanks.

Andrea Faria Teixeira: Thank you operator, and good morning to all and thank you Eric for all the help and wish you the best of luck.

Amanda G. Baldwin: I have one question for Amanda on consumption and a follow up on international distributors for some consumption of Amanda how are the trends as you exited the quarter and particularly in light of what we have heard from from your peers went from one of your customers.

Amanda G. Baldwin: And second on the international market commentary I appreciate that you were reducing and streamlining but international was a big decline when should we expect you to lap that and and how far are we in the innings of reorganizing and we're thinking about how to go to market internationally. Thank you.

Amanda G. Baldwin: Yeah, thanks for the questions, Andrea. I think, you know, what we can comment on at this point is really, as we think about that international business, that we were lapping harder comps from last year in terms of when we had the impact on sales from the PR moment. But what I would say going forward is that, you know, as I spent a lot of time with those partners, and I think we believe there's a very strong future for us in the international markets and really building out the strategies and thinking through how we're going to really capture the demand in different ways across the globe. Okay, also on the trends exiting the quarter, I think that's not something that we should comment on specifically.

Amanda: Yeah. Thanks for the questions. Andrea I think you know what we can comment on at this point is really as we think about our international business that we were lapping harder comps from last year and in terms of when.

Amanda G. Baldwin: We had the impact on the sales from from the PR moment.

Amanda G. Baldwin: But what I would say going forward is that you know as I I've spent a lot of time with those partners and I think we believe there's a very strong future for us in the international markets and really building out the strategies and thinking through how we are going to.

Amanda G. Baldwin: Absolutely the demand and in different ways across the across the globe.

Amanda G. Baldwin: Okay.

Amanda G. Baldwin: Okay also on the trends exiting the quarter I think that's not something that we comment on specifically.

Operator: Thank you. And our next question comes from Olivia Tong with Raymond James. Please state your question.

Amanda G. Baldwin: Thank you and our next question comes from Olivia Tong with Raymond James Please state your question.

Amanda G. Baldwin: Great, thank you. And thank you, Eric, for all the help through the years. So, it's nice to see that sales to retailers have stabilized. First, could you talk about if there was anything going off, or do you think you've reached a steady state on the retail channel? And then also, as you limit the distribution and work towards controlling diversion, can you give us any color on that?

Olivia Tong Cheang: Great. Thank you and.

Olivia Tong Cheang: And thank you Eric for all the help through the years. So it's nice to see that it looks like sales to retailers have stabilized for us.

Amanda G. Baldwin: Could you talk about if there was anything one off or do you think you've reached steady state on the retail channel and then also as you as you limit the distribution and work towards controlling diversion can you give us any color on where the dispersion is is coming from I would imagine that progress is the main culprit, but would love to have some color there. Thank you.

Amanda G. Baldwin: Yeah.

Eric Tiziani: Hey Olivia, thank you. Thanks for those kind words as well, as well as to Andrea. I'll start on your question about distributor rationalization. You know, this is what we said last quarter that one of the steps we're taking this year is to, you know, attack the challenge of diverted product in the marketplace by rationalizing some of our distribution, where we think the source of that diverted product is from. And we do that using many levers, one of them is our track and trace technology that helps us find the source.

Speaker Change: Hey, Olivia. Thank you thanks for those kind words as well its well its tough to Andrea.

Eric Tiziani: I'll start on your question around the distributor rationalization.

Eric Tiziani: What we said last quarter that one of the steps we're taking this year is to.

Eric Tiziani: Attack.

Eric Tiziani: The challenge is diverted pocket dive.

Eric Tiziani: Diverted product in the marketplace by rationalizing some of our distribution, where we think are the source of that diabetic product just from and we do that.

Eric Tiziani: Using many levers one of them is our track and trace technology that helps us find the source.

Eric Tiziani: By the way, I'll also say that we're progressing well on that. You know, we saw Q1 impacts similar to what we were expecting, and our outlook for the year in terms of the impacts of that continues to be consistent with last quarter. It is in the professional channel.

Speaker Change: Oh by the way I'll, just also say that.

Eric Tiziani: We're progressing well on that you know we saw on Q1 impacts similar to what we were expecting in our outlook for the year in terms of the impacts of that continued to be consistent with last quarter.

Eric Tiziani: That's where the arbitrage opportunity exists. It's not unique to Olaplex at all. This is a challenge that all omnichannel professional hair care brands deal with, and what we've noted is that we've seen it, particularly in our EMEA and European distributor base, as a source of some of that diversion. That's one of the reasons that we've cited for the weaker trend in international sales in the first quarter. By the way, we continue to feel good about other parts of our international business not impacted by those challenges. We continue to see bright spots in areas like Latin America, Japan, and Southeast Asia, where we've expanded distribution in recent years.

Eric Tiziani: It is in the professional channel, that's where the arbitrage opportunity exists its not unique to old flex. It. All this is a challenge that all omnichannel professional hair care brands a deal with <unk>.

Eric Tiziani: And what we've noted is that we've seen it particularly in our <unk>.

Eric Tiziani: In European distributor base as a source of some of that diversion. That's one of the reasons that we've cited for the.

Eric Tiziani: Weaker trend in international sales in the first quarter.

Eric Tiziani: By the way we continue to feel good about other parts of our international business not impacted by those challenges we continue to see bright spots in areas like Latin America, Japan, and Southeast Asia, where we've expanded distribution in recent years.

Eric Tiziani: And look, I'll take Olivia, your other question as well on specialty retail and one-off. I think it's good to come back to the point here that, You know, we've seen sell in and sell out, now go in unison, right? We're past the customer inventory rebalancing issues that we had to bear through, particularly in the first half of last year, and so we're not really seeing one-offs in the specialty retail channel.

Eric Tiziani: And Oh I'll take all of your your other question as well on specialty retail any one offs I think it's good to come back to the point here that.

Eric Tiziani: We've seen sell in and sell out now.

Eric Tiziani: Now go in unison, right, where we're past the customer inventory rebalancing issues that we had to bear through particularly in the first half of last year.

Eric Tiziani: And so we're not really seeing one offs in the specialty retail channel we were pleased to report it.

Eric Tiziani: We were pleased to report, you know, an improved trend in specialty retail in the first quarter. And with all of the investments, actions, and initiatives we're putting in place, that's a trend that we expect to continue to improve as we progress through the year.

Eric Tiziani: You know what you know.

Eric Tiziani: What was an improved trend in specialty retail in the first quarter and with all of the investments actions initiatives, we're putting in place that's a trend that we.

Eric Tiziani: Expect to continue to improve as we progress through the year.

Amanda G. Baldwin: Hi Olivia, just building on that as well, I think, you know, this is someplace that we have a new Chief Revenue Officer, Stuart, and I've spent a lot of time with these partners, both domestically as well as internationally, really understanding where their priorities are, and what we can contribute to their business. I think we've had a lot of very positive conversations, and I believe very strongly in the power of those relationships, and you'll start to certainly see things as we progress through the year that are based on the conversations that have been happening, and they've been really positive or excited about the future there.

Speaker Change: Hi, Olivia just building on that as well I think you know offers or someplace, but I, we have a new chief revenue officer, Stuart and I spend a lot of time with these partners both domestically as well as internationally and really understanding where their priorities are aware what they can contribute to the business I think we've had a lot of very positive combo.

Amanda G. Baldwin: Stations and I believe very strongly in the power of those relationships and you'll start to certainly see things as they as they progressed through together that are implementing on the conversations that have been happening and it's been really positive. We're excited about the future there.

Amanda G. Baldwin: Got it. Just on Q2, you know, consensus expectations are for sales to effectively stabilize in the June quarter. Do you think you're on track for that? You know, when does some of this regimen building marketing that you talked about hit the market? And, you know, how long does it take you to how long do you think it will take you to work through the diversion? So just trying to get a better sense of, you know, your thought process as the year progresses.

Speaker Change: Got it.

Amanda G. Baldwin:

Amanda G. Baldwin: Two two you know consensus expectations are for sales to effectively stabilize in the June quarter do you think you're on track for that you know when does some of the best regimen building marketing that you talked about hit the market.

Amanda G. Baldwin: And and how long does it take for you, though how long do you think it will take you to work through that diversion. So I'm just trying to get a better sense. So you know your processes and your.

Amanda G. Baldwin: Progressing.

Amanda G. Baldwin: Yeah, I think we expect that all three channels will continue to stabilize and strengthen as the year progresses. As you know, it does take time to get everything lined up, and certainly, we've taken the time in the first quarter to make sure that we're having the right conversations that we're developing. We spoke a lot in our first call about marketing, sales, and education being key focuses for us this year. I've certainly spent a lot of time.

Amanda G. Baldwin: Yeah, I mean, I think we expect that all three channels will continue to stabilize and strengthen I'd say are progressive and I didn't know it does take time to get everything lined up and certainly they've taken the time in the first quarter to make sure that we're having the right conversations that we're developing we spoke a lot in there.

Amanda G. Baldwin: And my first call about marketing sales and education being key focuses for us. This year I certainly spent a lot of time that they put together a lot of additional initiatives to make sure that we're thinking through what we're launching we're launching that I was speaking to it.

Amanda G. Baldwin: We've put together a lot of additional initiatives to make sure that we're thinking through what we're launching, when we're launching it, and how we're speaking about it. We're getting there. I think we'll start to be able to see things. I talked a little bit about some campaigns that are coming up in Q2, towards the end of Q2. That's really as quickly as we thought we could do this and do this well, and then accelerate it through the end of the year.

Amanda G. Baldwin: We're getting there I think well start to be able to see things I I talked a little bit about some campaigns that are coming up.

Amanda G. Baldwin: In Q2 towards the end of Q2 <unk>. That's really is as quickly as we thought we could do this and do that as well and then accelerating through the end of the year and we also have our launches coming up in the back half that we're very excited about so we're or just almost getting to a place where we've got I can make an impact on what we believe.

Amanda G. Baldwin: And we also have our launches coming up in the back half that we're very excited about. So we're just almost getting to a place where we can really make an impact on what we believe the future can be for this brand. But I certainly would say that it will be the beginning and not the end of that story, and just one Bill DeLivian.

Amanda G. Baldwin: The future can be for this brand.

Amanda G. Baldwin: I, certainly wouldn't say that it will be the beginning and not not the end of that story.

Eric Tiziani: And just one bill to Olivia on your distributor rationalization question again. The actions we've taken this year, we expect to have an impact throughout the year, and that's what we've built into our guidance and is still consistent with the build that we expect in net sales as we progress through the year.

Speaker Change: And just one build a living on your distributor rationalization question again.

Eric Tiziani: The actions we've taken this year, we expect to have an impact throughout the year and that's what we built into our guidance and still consistent with the build that we expect in net sales as we progressed through the year.

Olivia: Thank you very much.

Operator: Our next question comes from Lauren Lieberman with Barclays. Please state your question.

Eric Tiziani: Our next question comes from Lauren Lieberman with Barclays. Please state your question.

Operator: Great, thanks. Good morning.

Lauren Rae Lieberman: Great. Thanks, good morning.

Lauren Rae Lieberman: So I know you spoke about you still got about improving trends sequentially.

Lauren Rae Lieberman: In market, but I'm, just curious if you could share a little bit more detail on retail sales and our sales up yet in specialty multi I know you talked about adding all of flex Dot Com I guess I was curious what the other DTC channels kind of retail trends that you're seeing and if things.

Eric Tiziani: So I know you spoke about, you've spoken about improving trends sequentially in the market, but I was just curious if you could share a little bit more detail on retail sales. You know, are sales up yet in specialty multi? I know you talked about Olaplex.com. I guess I was curious about the other DTC channels, and the kind of retail trends that you're seeing. And if things are still down, and I know we're early in the process, you know, we're fact-finding and planning, not in full turnaround mode yet.

Lauren Rae Lieberman: They are still down and I know we're early in the fourth.

Eric Tiziani: We're SaaS, finding and planning not not in full turnaround mode yet.

Eric Tiziani: But given all the brand health metrics that you sided if you're not growing yet why do you think that is you know what is you know who is growing or are you. Just give me names. So why is it all a plus growing yet at retail thanks.

Eric Tiziani: Yes.

Eric Tiziani: But given all the brand health metrics that you cited, if you're not growing yet, why do you think that is? You know, what is, you know, who is growing, or, you know, give me names, but why isn't Olaplex growing yet at retail? Thanks.

Speaker Change: But laurent I'll start high.

Eric Tiziani: What we've said is that the sell through trends, including the sell through trends in specialty retail that we experienced in the first quarter.

Eric Tiziani: In absolute dollars was quite consistent with the sell through trends we saw in the back half of last year of course adjusted for some some seasonality.

Eric Tiziani: But Lauren, I'll start. Hi, Lauren. You know, what we said is that the sell through trend, including the sell through trend in specialty retail that we experienced in the first quarter, in absolute dollars, was quite consistent with the sell through trend that we saw in the back half of last year, of course, adjusted for some some seasonality. We're not commenting on that number specifically, or if we're growing in certain accounts or not, but what I will note is that, uh you know we've noted what we're lapping from the prior year and and lapping the negative medium moment we had in the beginning of last year and and really only reached this point where we started to talk about uh stabilizing the trend in uh Q3 or the back half of last year so just the sheer comping until we get to to lap that point is a factor and and again that is all built into uh the way we we put together the guidance for the year.

Eric Tiziani: You know, we're not commenting on that that number specifically you were growing in certain accounts or not but well I will note is that.

Eric Tiziani: You know we've noted what we're lapping from the prior year and lapping the make the media Amendment, we had in the beginning of last year and and really only reached this point, where we started to talk about stabilizing the trend in Q.

Eric Tiziani: Q3, or the back half of last year. So just the sheer comping until we get to lap that point is a factor and again that is all built into the.

Eric Tiziani: The way, we put together the guidance for the year.

Amanda G. Baldwin: And just to build on that, Lauren, in terms of as we look forward, I think that growth is about new products and new marketing. And those are the things that we've been continuing to talk about and continuing to focus on as a team, and certainly spoke a little bit about how we're thinking about that both in the short run as well as over time for our long-range plan. And both of those things are in progress. I'm very pleased with the pace at which we're moving. But, as you noted as well, it does take time, and we're three months into the year. All right. Thanks.

Lauren: And just to build on that more in terms of as we look forward I think that growth.

Amanda G. Baldwin: Growth is about new product and new marketing and those are the things that we've been continuing to talk about them and continuing to focus on as a team in and certainly I spoke a little bit about how we're how we're thinking about that both in the short run as well as over time or a long range plan and both of those things are in progress I'm very pleased with the pace at which.

Amanda G. Baldwin: We're moving but as you noted as well it does take time and it's just three months end to the year.

Operator: All right, thanks so much.

Speaker Change: Alright, thanks, so much.

Operator: Our next question comes from Korinne Wolfmeyer with Piper Sandler. Please state your question.

Speaker Change: Our next question comes from Corinne Wolf Meyer with Piper Sandler. Please state your question.

Operator: Hey, good morning, team. Thanks for the question. And Eric, best of luck in your next endeavors.

Korinne N. Wolfmeyer: Hey, good morning team. Thanks for the question and Eric Best of luck in your next endeavors.

Korinne N. Wolfmeyer: Firstly I'd like to ask a little bit on if you could quantify that kind of like pull forward of sales into the specialty retail channel and how much that may have pulled out of Q2, and then on the marketing spend if I did the math I mean, you're trending at about 15% of sales and marketing this year that.

Korinne N. Wolfmeyer: Is significantly lower than what we still see with a lot of other beauty peers. So what gives you confidence that that's kind of like the right rate for applause and then as we think over the longer term is that a proper sustainable rate going forward. Thank you.

Eric Tiziani: First, I'd like to ask a little bit about quantifying that kind of pull forward of sales in the specialty retail channel and how much that may have pulled out of Q2. And then on the marketing spend, if I did the math, I mean, you're trending at about, I think, 15% of sales spent on marketing this year. That is significantly lower than what we still see with a lot of other beauty peers. So what gives you confidence that that's kind of like the right rate for Olaplex? And then, as we think over the longer term, is that a proper sustainable rate going forward?

Korinne N. Wolfmeyer: Hi, great. Thank you very much I'm going to take your first question and then pass over to Amanda.

Amanda G. Baldwin: Hi Korinne, thank you very much. I'm going to take your first question and then pass it over to Amanda. Just simple, we're not disclosing the number on that, but we just wanted to note some of the additional color that Q1 specialty retail was helped by some of those phase-in shipments, but we're not giving a quantification on that. And Amanda, I'm working on the marketing. Yeah, so I think, again, we took our time in the first quarter to make sure that we were focused on the planning for the rest of the year.

Eric Tiziani: Just a simple we're not disclosing the number on that but we just wanted to note. Some of the additional colors that Q1 specialty retail was helped by some of those things and shipments but were not giving a quantification on that.

Amanda: And Amanda Murphy marketing, yeah. So I think again, we we took our time in the first quarter to make sure that we were focused on the planning for the rest of the year. So I think we definitely anticipate that throughout the rest of the year, while we'll continue to invest more heavily behind the brand.

Amanda G. Baldwin: So I think we definitely anticipate that throughout the rest of the year, we'll continue to invest more heavily behind the brand. And, as we noted before, in terms of, we are very much on track for our long-range planning process. That's an important part of that is assessing the marketing level that's appropriate. We feel like we are at the right level for this year. But, as we noted before, that's certainly one of the bigger things that we'll think through to ensure that we have the right amount of investment behind this brand.

Amanda G. Baldwin: And as we noted before in terms of we are very much on track for our long range planning process.

Amanda G. Baldwin: And an important part of that is assessing the marketing level. That's appropriate we felt like we are at the right level for this year, but I think I did before that that's certainly one of the bigger things that we'll think through to ensure that we have the right amount of investment behind the brand.

Amanda G. Baldwin: And again, I would say it's dollars, but it's also where, when, and how. So it's about not just the money but what we're spending it on, the focus from the marketing point of view, the aesthetics of the brand, and a lot of other things that go into that that I think are also equally important.

Amanda G. Baldwin: I would say, it's a dollars, but it's also where when and how so it's about not just the money about what we're spending on it.

Amanda G. Baldwin: That's from the marketing point of view that the aesthetics of the brand and in a lot of other things that go into that that I think are also equally important.

Speaker Change: Very helpful. Thank you.

Operator: Thank you. And our next question comes from Javier Escalante with Evercore ISI. Please state your question. Operator, Escalante, the line is open. Maybe you have yourself muted. Yes.

Amanda G. Baldwin: Thank you and our next question comes from Javier Escalante with Evercore ISI. Please state your question.

Javier Escalante: I've just got a lot of other airlines opened maybe you have yourself muted.

Operator: Yes, I was muted. Eric, it was a pleasure working with you and best of luck in your new endeavors. I guess my question is for Amanda. Hello. I wonder whether you can elaborate more on the findings of this brand assessment that you mentioned, whether you pro for how differentiated the Olaplex brand is versus your key competitors, be it L'Oreal Redken, Unilever's K18, and coming back to, and I understand that you already touched upon marketing spending, but is 15% the right level given the size of the budgets of these two competitors? And I have a follow-up.

Javier Escalante: Yes, I was muted Eric a pleasure working with you and best of luck and Georgia New endeavors.

Operator: I guess my question is with them and.

Operator: Hello, I wonder whether you can elaborate more on the findings of Ts, Brian assessment that Jim mentioned.

Operator: Whether you drove four how differentiated the all uplifts brand.

Operator: East versus your key competitors be l'oreal redken unity risky a teen I'm coming back to and I understand that you already touch upon the marketing spending but is is 15% the right level given our the size.

Operator: Of the budgets of the.

Operator: These two competitors and I have a follow up.

Amanda G. Baldwin: Absolutely. So I think that what I heard was to go into more detail on the brand perception studies. So, what that really was, you know, immediately upon joining the business, I think I felt that it was important to get grounded in where both the consumer as well as the professional are in terms of what their understanding of the brand is. And to your point, really, what's our point of difference?

Amanda: Absolutely so and I think what I heard was that I could go into more detail on the brand perception study. So what that really was immediately upon joining the business I think I felt that was important to get grounded and whereas at both the consumer as well as the pro are in terms of what they are.

Amanda G. Baldwin: Understanding of the brand as an end to your point really what's the point of difference.

Amanda G. Baldwin: And where do we want to think about building the brand going forward.

Amanda G. Baldwin: What was exciting about that because that was very confirmatory of all the things that we spoke about on my first call in terms of the foundation that we're building off of this is a product that really works.

Amanda G. Baldwin: The science that people have a lot of confidence and we have a tremendous heritage and the pro that was really.

Amanda G. Baldwin: We've been out there to help them and really enhanced their craft for for instance that the 10 year anniversary that we're coming up on I think what we really believe that the opportunity lies is again around the things that we have talked about as key initiatives for us about better marketing the brand better explaining the differentiation of that science, making sure that we're getting credit.

Amanda G. Baldwin: And where do we want to think about building the brand going forward? What was exciting about that was that it was very confirmatory of all the things that we spoke about on the first call in terms of the foundation that we're building off of. This is a product that really works.

Amanda G. Baldwin: This is science that people have a lot of confidence in. We have a tremendous heritage in the pro that was really, you know, we've been there to help them and really enhance their craft since the 10 year anniversary that we're coming up on. I think what we really believe that the opportunity lies again around the things that we have talked about as key initiatives for us, better marketing the brand, better explaining the differentiation of that science, and making sure that we're getting credit for a truly true product that delivers.

Amanda G. Baldwin: For truly true product that delivers and beyond that also building a brand which is something that we've also spoken about that there is there's the science and the underlying product quality and then how do we really create an emotional connection with both the proud as long as the consumer and in one of our first things and again, we spoke of.

Amanda G. Baldwin: And beyond that, also building a brand, which is something that we've also spoken about, that there is the science and the underlying product quality. And then how do we really create an emotional connection with both the professional as well as the consumer? And one of our first things, and we spoke a little bit about this today, was really reconnecting with the pros on a personal and emotional level. There's a lot more to come on that as we really focus on that community.

Amanda G. Baldwin: But about it today was really rude connecting with the pro on a on a personal on an emotional level, there's a lot more to come and not.

Amanda G. Baldwin: Is it really focus on that community. So what I would say my my biggest takeaway from that research was that there is really back incredibly strong foundation and that the brand health is quite strong that doesn't mean that there's not work to do and not a lot of opportunity to better harness that but what we're working with from a fundamental point of view it is quite strong.

Amanda G. Baldwin: So, what I would say my biggest takeaway from that research was that there is really that incredibly strong foundation that the brand health is quite strong. That doesn't mean that there's not work to do and not a lot of opportunity to better harness that, but what we're working with from a really fundamental point of view is quite strong. With respect to, again, the question with respect to marketing and what's the appropriate dollar amount to do that, again, we feel like we have the right amount for this year and we'll continue to build on that.

Amanda G. Baldwin: With respect to you know again the question is with respect to marketing and and what's the appropriate dollar amount to do that.

Amanda G. Baldwin: So again, we feel like we have the right amount for this year and will continue to build on that and I also spoke a little bit about an internal media hub that we've set up that it's really going to allow us to look at the dollars that we're spending though we're spending them, making sure that we're putting them in the right place and then using those results to inform our long range plan. So certainly a lot more to come on.

Amanda G. Baldwin: I also spoke a little bit about an internal media hub that we've set up that is really going to allow us to look at the dollars that we're spending, where we're spending them, making sure that we're putting them in the right place and then using those results to inform our long-range plan. So certainly, there is a lot more to come on that, but at this point, we think we've got the right amount for this year.

Amanda G. Baldwin: I'm not but.

Amanda G. Baldwin: But at this point, we think we've got the right amount for this year.

Amanda G. Baldwin: And just a follow-up, this is very helpful, and just a follow-up to Lauren's questions. At some point in time, the decline was attributed to some sort of misinformation on social media, and your assessment suggests that that misinformation actually wasn't the factor. So, if it is not misinformation and if it is not the brand perception on the consumer side, what in the business model didn't work, you feel? Is it that you were asking too much of the stylist in terms of pushing and defending the brand? What exactly then? Because it's not misinformation, the brand equity is okay. So what happened then?

Speaker Change: And just a follow up this is very helpful and just a follow up to Lauren's question attempt.

Amanda G. Baldwin: At some point in time, the declines were attributed to some sort of misinformation and social media.

Amanda G. Baldwin: And your assessment suggests that that misinformation actually worsen the factor.

Amanda G. Baldwin: So.

Amanda G. Baldwin: If it is not misinformation and if it's not the brand perception.

Amanda G. Baldwin: In the consumer side.

Amanda G. Baldwin: What is the business model didn't work you feel this is a jewel.

Amanda G. Baldwin: We're asking too much to the stylist in terms of you know pushing and defend the brand what exactly then you know because he's not misinformation that Brian equities. Okay. So what happened then.

Amanda G. Baldwin: Yeah.

Amanda G. Baldwin: I would say that certainly the misinformation impacted the business at a moment in time. You know, I think that we believe that that is not the core issue at this juncture, but it certainly has an impact.

Amanda G. Baldwin: I would say that certainly the misinformation impacted the business at a moment in time are you know I think that we believe that that is not the core issue at this juncture, but.

Amanda G. Baldwin: We had an impact what.

Amanda G. Baldwin: What I would say in terms of the difference between what is underlying brand health versus brand salience and sort of cultural relevance is the distinction that I would draw there. So, again, the foundation is very strong. This is a product that many, many people are very loyal to and have great results from. In order to continue to grow and be top of mind within this industry, it's very important to be out there speaking about your brand, launching new products, and being in the right cultural moments.

Amanda G. Baldwin: What I would say in terms of the difference between what is underlying brand health versus brand salience and sort of cultural that well then there's a distinction that I wouldn't draw. There. So again. The foundation is very strong. This is a product set that many many people are very loyal to and have great results from in order to continue.

Amanda G. Baldwin: Due to to grow and be top of mind within that industry. It's very important to be out there speaking about your brands launching new products being in the right cultural moments I spoke a little bit about something that we've been doing in first quarter, which was certainly something we're very excited about with being a part of that warranty then.

Amanda G. Baldwin: I spoke a little bit about something that we did in the first quarter, which was certainly something we're very excited about, being a part of the award season and the red carpet and things like that that put you at the top of mind of the consumer. I think that our category is competitive, beauty is competitive, so you can have really strong underlying brand health. That doesn't mean you can be quiet with the consumer. And I think that's really the distinction that we're speaking about and what we're very focused on in the marketing organization right now. Thank you.

Amanda G. Baldwin: Carpet and things like that that would put you at top of mind of the consumer I think that or category is competitive beauty is competitive and so you can have really strong underlying brand health that doesn't mean, it can be quiet with the consumer and I think that's really the distinction that we're speaking about and what we're very focused on.

Amanda G. Baldwin: And the marketing organization right now.

Operator: Thank you very much. It was very helpful.

Speaker Change: Thank you very much very helpful.

Operator: Mhm.

Operator: Thank you. And our final question today comes from Susan Anderson with Canaccord Genuity. Please state your question.

Operator: Thank you and our final question today comes from Susan Anderson with Canaccord Genuity. Please state your question.

Operator: Hi, good morning.

Operator: Thanks for taking my questions. You talked a bit about some new product launches coming out this year to help drive sales. Just wondering if you could give some color on kind of what these products will be or what category they'll be in. And then also, when we think about the rollout, should we expect a full retail door launch or certain retailers? I guess I'm just trying to get an idea of the magnitude there. Thanks.

Susan Kay Anderson: Hi, Good morning, Thanks for taking my questions you talked a bit about some new product launches coming out this year to help drive cells. Just wondering if you could give some color on kind of what these products will be or what category there'll be in and then also.

Operator: And when you when we think about the rollout should we expect a full retail door launch or certain retailers I guess, just trying to get an idea of the magnitude there. Thanks.

Amanda G. Baldwin: All fair questions, but unfortunately, I won't be able to give you detail on that for competitive reasons. But what I would say is that there are multiple products coming that we believe are certainly at the level of innovation that I believe this brand has the capability of delivering and will continue to deliver going forward. So probably that's all I can say at this point, but innovation is certainly the lifeblood of this brand.

Speaker Change: All fair questions, but unfortunately, I won't be able to give detail on that for competitive reasons, but what I would say is that there are some.

Amanda G. Baldwin: Multiple multiple products coming that we believe are certainly at the level of innovation that I believe this brand has the capability of delivering them and we'll continue to deliver going forward. So I'm probably.

Amanda G. Baldwin: Probably that's all I can say at this point, but innovation that certainly the lifeblood of this brand.

Amanda G. Baldwin: Okay, great. And then maybe just one more on the professional channel, which, you know, it seems like, continues to be challenged, and a lot of your peers are saying the same thing. Maybe if you could just talk about the competition. Is it the competition in that channel? Is it still just lackluster consumer spending? And I guess, is it still coming from both the front of the store and the back bar? And then just any thoughts going forward on, you know, kind of how to compete in that channel and get it back to growth?

Amanda G. Baldwin: Okay, Great and then maybe just one more on the professional channel, which you know it seems like continues to be challenged in a lot of your peers are saying the same I guess, maybe if you could just talk about the competition is it the competition in that channel or is it still just lackluster consumer spending and I guess is it still coming from both the front of the store and the.

Amanda G. Baldwin: Back bar and then just any thoughts going forward on you know kind of how to compete in that channel in and get it back to growth.

Amanda G. Baldwin: I think the macro consumer trend around salons is twofold. I would say one is that there certainly is more time between visits that are happening within the salon channel. And secondly, there are more places to purchase products in front of the salon.

Amanda G. Baldwin: I think the macro consumer trends around so long as its two fold I would say one is that there certainly are.

Amanda G. Baldwin: Or more time between visits that are happening within the Salon channel and secondly is that there are more places to protest product in front of us. So I think those things are again their macro trends that are not unique to us.

Amanda G. Baldwin: So I think those things are, again, macro trends that are not unique to us. But again, I don't think that that means that the pro is not incredibly important to us and actually supporting them as they have been part of this brand since the very beginning. It's something that remains incredibly important to us. But thinking about that macro context and what's the appropriate strategy within that is something that certainly is how we're focused on that channel.

Amanda G. Baldwin: Again, I don't think that that means that the pro it's not incredibly important to us and actually supporting them as they have been.

Amanda G. Baldwin: Part of this brand since the very beginning is something that remains incredibly important to us, but thinking about that macro context, and what's the appropriate strategy within that is something that it certainly is it's how we're focused on that channel.

Operator: Great. Thanks so much. Good luck for the rest of the year.

Speaker Change: Great. Thanks, so much good luck the rest of the year.

Amanda G. Baldwin: Thank you. Thank you. I'll now hand the floor back over to Amanda Baldwin for closing.

Speaker Change: Thank you.

Amanda G. Baldwin: Thank you I'll now hand, the floor back over to Amanda Baldwin for closing comments.

Operator: Thank you, everyone, for joining us today and for all the questions. We really very much appreciate your interest in Olaplex. And if you have anything additional, I hope you will reach out. And we look forward to speaking with everyone soon.

Amanda G. Baldwin: Thank you everyone for joining us today and appreciate all the questions I was really very much appreciate your interest in <unk>. If you have anything additional I hope you will reach out and we look forward to speaking with everyone. Soon.

Operator: This concludes today's call. All parties may disconnect. Have a good day.

Operator: This concludes today's call all parties may disconnect have a good day.