Q2 2025 Olaplex Holdings Inc Earnings Call
Greetings, and welcome to the olaplex Holdings Inc. Second quarter 2025 was earning results conference call.
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It is now my pleasure to introduce Michael oriolo, vice president of investor relations. Please go ahead.
Good morning everyone. Welcome to our second quarter fiscal 2025 earnings call. Joining me today are Amanda Baldwin, chief executive officer and Catherine, Dunleavy Chief, Operating Officer and Chief Financial Officer.
And the company's earnings release issued today.
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For today's call, Amanda will start by providing highlights of our second quarter performance and discuss the progress. We have made on our strategic areas of focus, then Katherine will discuss our financial results and Outlook
following this, we will turn the call over to the operator, to conduct the question and answer session with that, I will now turn the call over to Amanda.
Good morning everyone. Thank you, Mike and welcome to the olaflex team. Mike brings over 15 years of investor relations and financial services experience including leadership roles at Shake Shack at multiple years covering, the consumer sector as both a public market and private Equity investor. I look forward to you all, getting to meet him as he partners with myself and the rest of the old Flex team at this pivotal time in our ongoing transformation.
We're pleased to share second quarter results that marked continued progress in our transformation journey.
As I have said, consistently since day 1 of joining Olex remains important to recognize that your Transformations are rarely linear. Especially those, that are as broad as ours touching all parts of our organization and business model, we are encouraged by the signs of progress year to date. And we also recognize that there remains more work ahead, as we balance improving the business and the immediate term with simultaneously, positioning Olex for sustainable long-term success,
Through our teams tireless, execution of our bonds and Beyond strategy. We delivered a solid first half of the year and encouraged by our progress.
as we enter into the second half of 2025 remain focused on, delivering the results we guided to at the outset of the year and further laying the foundation for our ongoing transformation,
Before diving into our strategic progress, here is a summary of our second quarter results.
Net sales of 106.3 million up 2.3% year-over-year.
With adjusted ibaa of 24.6 million, a margin of 23.1%.
Turning to our performance by Channel.
In professional. We are seeing early traction from our Pro. First efforts driven, largely by our us business.
Specialty, retail sales were down in the quarter. However, our sell through a key retailers, improves sequentially versus first quarter levels as we are beginning to see the benefits from our marketing Investments.
direct to Consumer LED our performance with sales Rising low, double digits, aided by a favorable response to our upgraded old plex.com site and strategy to consolidate promotions into key head pole moments
Now, let me discuss the execution of our strategy and an update on our progress here today.
As a reminder, we have 3 strategic priorities for 2025.
First generate brand, demand, second harness, Innovation and third execute with excellence.
14.6 million over the same period last year while still generating strong 24.7 adjusted ibaa margin
In the second quarter, we were number 1 in EMB across Prestige hair. Care, and are pleased with investment is driving improvement and self room and other leading indicators of long-term brand house.
generating demand requires building a brand and a marketing engine which we view as being implemented, in 3 stages,
First building the brand Baseline second, creating a brand platform and third building an ongoing content engine.
We began 2025 by building the brand Baseline, making fundamental changes in how olaflex shows up for professionals. And for consumers representing a new more elevated emotionally resonant and pro first visual identity while still maintaining our scientific core
In late February, we unveiled. This new. Look in the US featuring a revamped website designed to elevate storytelling, education and commerce.
We also rolled out a refreshed in-store visual merchandising at Key retail and pro Partners launched a revitalized social media strategy, and enhanced our presence at professional trade shows upgraded, boost, designs and engagements.
Our new brand identity has now been rolled out across most of our markets with plans to be completed across the entire Globe by the end of the year.
In April, we moved to the brand platform stage of our development, but the launch of design to defy. This new platform captures, both our history and our future with a philosophy of innovation, creativity and confidence.
We launched with a storytelling vignette featuring our ambassadors and their clients across full funnel media, including out of home, connected TV, social, and experiential activation with our Bond House immersive pop-up experience.
API for positive with increased share of voice.
Social mentions up 35% social Impressions up, 140% and Improvement in Google search volume.
Building on this effort. Beginning in June, we launched Our Endless Summer, Endless Possibilities Campaign, which focused on our top selling old Flex number 6, and number 7 products,
Both of which are key Staples to fight the frizz and create the shine and Sheen prevalent in summertime hair across the globe.
We connected the campaign with a high visibility cultural moment through our old Flex summer. Suare bringing together Olex Global brand ambassador and celebrity stylist. Tracey Cunningham, and real life. Best friends from hit TV show The White Lotus Leslie, bibs and Michelle Monaghan who showcased the product line. They used to maintain healthy hair during extensive filming in Thailand.
this where generated over 1 billion Impressions and secured coverage across more than 14 stories including 2 National broadcast segments,
Importantly, the Summers where was launched with a more full funnel content engine focused on personalized digital content at scale in an effort to bring these products to life for the everyday consumer.
As we move into the second half of the year, we'll focus on the third phase of brand building developing a consistent digital first content engine. This will support both the transformational and scientific storytelling behind our core, as well as our new product launches.
Step of brand building. We have achieved thus far in 2025 as our focus on honoring and empowering the pro as the Stark of the flywheel of our business.
In the first quarter of 2025, we were joined by the a new head of education and have since built out the team and added to our talent, as well as split, our education and sales functions to allow more focus and the creation of clear measurable kpis. We also updated our education materials in line with our design to defy branding and simplify copy and usage instructions.
these important changes have allowed us to start to implement an essential part of our strategy, which I have been discussing since very early on
explaining and getting credit for the power of our science.
In addition to the reset of our education program, we also launched a new market Blitz strategy so that our team can reconnect directly with the pro in olflex dedicated environments.
We started in 3 in cities Portland Oregon Fort Lauderdale Florida and Edmonton Canada. Our first ever event, showcasing the old Lex brand in Canada.
At these ticketed events. We host upwards of 100 guests from Top salons in the region, providing education from our olaflex ambassadors for the focus, on the transformational qualities, that our brand and products can have for their clients and their business overall
Lex offering. Well, early, we are pleased by what we've seen in these initial markets, and expect to expand this strategy, to other regions, throughout the remainder of 2025 and into 2026 and Beyond.
we've also enhanced our presence, at Key trade shows, including America's Beauty, show, and Chicago in May, and Premiere Orlando in June,
Where we held multiple days of classroom, education with Headliners and participated on the main stage for partnership with 1 of our key retailers.
At Premiere, we're proud to also celebrate the success of Burnham. Press 1 of our Olex ambassadors, who was awarded the prestigious North American hair, styling award for texture.
We also began to make investments in Pro International. As with our partners, we attended key trade shows, such as Top Hair in Germany in March and Hair Australia in June, with nearly 30,000 visitors across the two shows.
We expect to attend shows in additional markets in the second half of 2025.
According to our ongoing internal surveys, Pros are excited by the programs we are creating to become a more trusted partner.
This gives us confidence in our strategies and the ultimate potential for this important Channel.
Moving on to our second priority harness innovation.
Over the last year, we had built an innovation team and a cross-functional processes that we believe set the stage for a robust and consistent forward-looking Pipeline with a cohesive launch calendar.
Our long-term goal is to have 2 to 3 strategic product launches annually each supported by strong consumer education, stylist engagement, and Omni Channel marketing activation
To provide context on the progress. We've already made during the first half of 2025. We accelerated our new product development efforts, and we launched 3, new Innovations compared to only 1 in the first half of 2024,
In late February, we launched our scalp longevity treatment which marked our entry into 1 of the fastest growing niches in premium hair care.
In May, we launched numbers 4 and 5, fine. We used customized formulations designed to optimize the hair health of those consumers who have fine hair.
According to Sakana on both dollar and unit sales, old text number 5, find Bond maintenance conditioner, and Olex. Number 4, find Bond maintenance shampoo with a number 1. And number 2, hair launches of 2025 and the prestige Beauty space.
While still early post-launch, we've seen a sequential improvement in self-room in wash care overall.
In the back half, we just recently launched our Pro-exclusive scalp service.
As we have discussed.
Scalp is an important vertical for Innovation as it sets. The critical foundations for long-term hair Health. As 1 of the fastest growing categories in premium hair care.
While overall, this category is in the early stages, the launch of strategically important as we focus on the pro and our journey from damage repair to overall hair health.
This is an Express service product, designed to drive stylist Revenue efficiently,
We also plan to launch additional Innovation across all channels, this fall.
As we look Beyond 2025, we're excited about the pipeline. We are building focusing on developing breakthrough, Innovations and capturing new consumers and categories.
With fewer than 30 skus in our current lineup. We remain confident that we have substantial, white space for expansion.
Lastly, our third strategic priority execute with Excellence, which is primarily focused on 2, C Core areas.
Streamlining and modernizing our business processes.
And executing a globally, aligned, go to market strategy.
First streamlining and modernizing our business processes.
To achieve a best-in-class business. We must first hire the right people in the right positions.
Building upon the Strategic hires we already made in 2024 and 2025 was added new Talent across Education. Data and marketing analytics, Finance, creative and sales.
We're also working diligently to improve our internal processes and tools.
In the second quarter, we stood up our AI supported demand planning tools.
And added new data science capabilities.
We're still in this testing phase, but we are excited about the ultimate unlocked. These tools can provide our teams and businesses overall.
We're also enhancing visibility across the organization as we launched a dynamic sales dashboard to better, crack sales and sell through, which we can then use to change strategic direction as necessary.
Second executing a globally aligned go to market strategies.
We remain in the process of Shifting, our International strategy, from a 1 size, fits all model to a tiered approach that balances direct investment with strong, local Partnerships
The Lex brand continues to resonate across the globe garnering, strong interest from Distributors, retailers pros and consumers.
Harness that Baseline to get a future growth.
It's properly managed. These complex unique relationships across the globe. It is vital that we strategically set up our international business, for success.
To that end. We opened an office in London during the quarter. And now reorganizing our International Teams by geographies and key accounts,
We are also implementing similar process changes that have been successful in our North American Business. Including cohesive. Go to market strategy, join business planning regular measurement of kpis and implementing new tools, including a self-serve portal, for our distributor partners,
our systemic Market by market reset of distribution. Networks is ongoing.
If completed our evaluation stage are now executing a tiered approach that prioritizes Investments to meet the unique characteristics of each market.
Our International strategy follows. A 3-tiered approach.
First partner-led priority markets and select sizable markets. We're establishing Partnerships with strong Omni Channel Distributors. These markets receive dedicated support from our team, including talent and resources to ensure long-term success.
Second direct investment market and our top priority markets, where we already have strong professional and Retail presence. We're taking a more Hands-On approach. We plan to directly manage Kia, aspects of the business invest in areas such as marketing and education.
Third, light touch partner markets.
In markets, where Dynamics make direct involvement less effective, we work with Partners through a lighter Touch model.
We expect this tiered approach will allow us to focus our investments on the countries that we believe offer the greatest growth potential while providing the tools and Direction needed for our brand and business execution to be consistent around the world.
In summary we delivered a solid first half of the year and we remain on track to deliver our 2025 guidance as we continue to implement our bonds and Beyond strategy.
We know, transformation takes time. And we still have a lot of work to do to reach our ultimate potential, but I am pleased with our progress with that. I'll turn it over to Katherine to walk through more of our second quarter, and year-to-date results and the outlook for the remainder of the year.
Thank you, Amanda, and good morning, everyone.
We are proud of our teams execution. This quarter yet we remain clear that we are still in the midst of executing, our transformational strategy and that much of the work to unlock long-term growth is still ahead of us.
Second quarter, net sales were 106.3 million, a 2.3%, increase year-over-year.
Growth in direct consumer and strong results in our professional Channel helped offset, expected declines in our specialty, retail Channel.
Growth was led by the us where we were further along in our transformation.
Net sales continue to benefit from our focus on driving profitable sales and managing discounts.
Given this significant transformation underway and a potential variability in quarterly net sales metrics We Believe looking at year-to-date results is helpful to understand the progress made in our transformation accordingly. I will review both our second quarter and year to date performance which shows net sales flat through the first half of the year.
By Channel professional grew 12.1% year-over-year in the quarter to 37.4 million with net sales, approximately flat year to date.
Year-to-date strengths was led by North America and Tailwinds from our management of promotions.
In June, we implemented our Blitz strategy. And we're looking forward to expanding this program, in the back, half of 2025.
Within International, we are starting to implement initiatives that have been well-received in North America.
Specialty. Retail declined, 16.7% year-over-year in a quarter to 30.4 million with net sales down approximately 3% year to date.
Sell through improved slightly in a second quarter versus the first quarter. It is important to note that we believe inventory levels at our key. Customers are in healthy positions.
Direct-to-consumer grew 12.8% year-over-year to 38.5 million in the quarter and is up approximately 4% in the first half of 2025.
Our performance was aided by our strategy. To prioritize storytelling and education on our website, while focusing marketing. And around key moments such as our friends and family event, which took place in the second quarter.
Year to date by region.
It is important to put our year-to-date, net sales results, in context, we are still in the midst of transformation and approximately flat sales represents a notable Improvement compared to the net sales decline, seen in the fiscal years of 2023 of down 35% and of 2024 down 8%. We believe that this indicates our strategy and Investments are beginning to have impact.
Adjusted growth profit margin for the quarter was 73.2% and 72.6% year to date down 50 basis points.
Year to date from the prior year.
As lower margin on Innovation. That has not yet reached full production scale or margin efficiency was partially offset by results of our improved promotion experience.
Adjusted sgna was 54.3 Million for the quarter and 98.7 year-to-date and increase of 18.9 million year-over-year.
Increase is aligned with our strategic priorities and primarily reflects investment in sales and marketing, which increased 9.8 million year-over-year in the quarter and approximately 14.6 million year to date.
We view our marketing investment, as Dynamic adjusting spend based on real-time performance insights, and continuously optimizing across investment type and channels.
This test-and-learn mindset is part of a broader transformation across the organization.
Improvements in our people, processes and tools have enhanced visibility into key metrics, accelerated decision-making and enabled, more strategic resource allocations. Not just in marketing, but across the business.
With more integrated business planning, we're now able to shift resources more effectively and that agility is starting to show in our financial results.
Adjusted Eva was 24.6 Million for the quarter and 50.2 million year to date, representing a 24.7 margin year to date this compares to 33.3% margin year to date a year ago, largely reflecting the Strategic investments in marketing and people we are making to position our business for sustainable long-term growth.
Turning to review of cash flow and the balance sheet.
We generated positive cash flow in a quarter reflecting the power of our asset light business model. Even as we invest for growth,
We ended the quarter with cash and cash equivalents of 289.3 million and debt of 351.9 million.
Inventory was $78.3 million, down approximately $22 million from $100.2 million in Q2 of fiscal 2024.
We feel good about the composition, and content of our inventory and both our warehouses. And at our key Retail Partners, and continue to carefully manage stock levels and support of new product, launches, and refreshed. Merchandising,
As Amanda noted, we are maintaining our full year 2025 guidance, which reflects our performance in the first half of the year and acknowledgement that are trans are improving albeit as low pace.
We expect net sales and the range of minus 3 to plus 2% versus fiscal year. 2024, adjusted gross margin between 70.5 and 71.5.
And adjusted ibaa, margins of 20% to 22%.
This guidance assumes no material impact from tariffs. As we believe, we are minimally exposed although the trade environment remains fluid.
And while we plan our business, on an annual basis and provide guidance accordingly, we currently expect second half net sale dollars to be more weighted towards the fourth quarter.
We're actively working to best align the flow of our product and timing of key initiatives with customer needs, and have developed a more structured cadence of our campaigns and innovation calendar.
For the second half of 2025, there are several notable factors, which will impact net sales.
First, indeed, we expect headwinds in the third quarter following large sales events in the second quarter of 2025.
Versus consecrated in the third quarter of 2024.
In Pro, we expect fourth quarter to benefit from the participation in Black Friday Cyber Monday events. After not participating in 2024
Lastly, we expect the fourth quarter to benefit from pipe and selling of 2026 innovation in anticipation of launch early next year.
As a result third quarter, net sales are expected to decline, High single digits, year-over-year offset by Strong, high single digit. Net sales growth in the fourth quarter,
We are encouraged by our year-to-date results. While remaining, clear-eyed that we are in the midst of a significant transformation.
We're confident that the changes underway are the right ones to position all for long term success, yet, in a period of meaningful change, we acknowledge that the precise timing of impact across professional channels, consumer behavior and ultimately sales can be difficult to predict
We remain focused on driving sustainable, improvements aimed at lying, a strong foundation for the future, while delivering on the commitments, we set at the beginning of the year.
All Plex is an iconic. Global brand generating healthy ibaa, margins and strong cash flow.
Through the execution of our bonds and Beyond strategy, We believe We Are positioning the company to grow successfully over the long term as a leader in foundational, health and beauty.
Operator will now ready to take questions?
Thank you.
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We also ask that each analyst limit themselves to 1 question and 1 follow-up. And then req for any additional questions
Thank you, 1 moment, please really pull up the questions.
And the first question comes from the line of Susan Anderson with Kenna court, genuity please proceed.
Hi, good morning, thanks for taking my questions. Um, I guess for third quarter, just to follow up there on the sales, I guess. Are you expecting most of the decline in and Specialty retailer in the specialty, retail Channel. Just giving the shift in selling to be more, even between third and fourth quarter.
Hi. Thanks for the question and I said, nice to hear your voice. Um, let me just talk about the third and the fourth quarter Dynamics and in a little bit more detail across
When you think about the third and fourth quarter, there are just natural es and flows on a quarterly basis especially as we're in the midst of the transformation.
And you know, we really are planning our business annually versus Man managing for any single quarter as we work to deliver what our customer needs and wants. And so broadly speaking, we are intentionally working to establish a more consistent and demand driven Cadence of launches and events as we apply these. You know, these learnings the timing of the commercial activity is shifted a bit resulting in lighter, third quarter, and greater concentration of sales in the fourth quarter. And while this does create some variability in year-over-year, comparisons that, you know, it better reflects the, uh, meeting customer demands and US building kind of like a more effective, go to market, um, model over time. So I went through earlier what are the drivers that I can list them a little bit again, which is you know, D to C second quarter. We had some events third quarter that's going to have some some headwinds and Specialty retail we expect the percentage of holiday shipments.
To be better split between the third and the fourth quarter.
Versus being more concentrated in the third quarter 2024, when you think about it in specialty, retail, what happened last year is we are pretty broken in the fourth quarter, in some of our big partners. And so we've worked together to split out that flow and so more of that is actually going into uh weekly into the fourth quarter.
And then in Pro, we expect the fourth quarter, as I said to benefit from the Black Friday, Cyber Monday events, I'll stop there.
Um, in the back half, year-over-year. Thanks
Uh, good morning, Susan. Uh, so basically I think we've talked about this a couple of times as we've looked at the business overall and how do we think about promotions? More strategically has been an initiative that Katherine? And I have undertaken over the course of the last year and really thinking about promotions are certainly an important part of how to drive sales in our category but we want to really focus on those events that are what we call Chi 10 full moments. Whether those are things like our own friends and family, uh, event on our direct to consumer or Black Friday, Cyber Monday or specific retailer events and really make sure that we're concentrating our efforts around those moments versus having what I'll call more of a day in day out point of view uh before I join. So that's certainly a shift and that that impacts how the quarterly flows. Uh and we did think that it was important to participate in Black Friday Cyber Monday. For our Pro, as a part of just supporting the pro uh at the end of the day it's really making sure that they have access to what the consumer does as well. So it's not an intention to be more promotional but
it's really more to be more strategic about how we're being promotional.
Okay, great, that's really helpful. Thanks so much. Good luck. The rest of the year.
Thank you. Thank you.
The next question comes from the line of Olivia Tong with Ren and James please proceed.
Good morning. This is Lillian on for Olivia. I'm wondering if you can share some of your key learnings so far from your refresh marketing and just as a follow-up as we look to the second half, can you give any color on the Cadence of sgna spend and whether it's relatively balanced between the quarters? Or if it follows the same timing shift between Q3 and Q4?
Sure, I'm happy to to talk a little bit more about marketing which is obviously been a significant part of our strategy coming into this year and really something that we are approximately about 4, 5 months in. Um, if you really think about, when we started to really operate in the way that that I look forward to continuing to operate in this business and it is a 3-stage process and I think we've had incredibly strong response to each stage of the process, but we're still mid build. Uh I think it's really the way to think about this. So Phase 1 was what we were talking about in terms of setting the brand Baseline. That's always a, a big and exciting bet that 1 makes when you're taking a brand and you're really looking at the visual identity and updating it for the future. Uh, we've heard tremendously positive feedback on that, um, from I think we mentioned the last quarter's call from our Retail Partners and then you get to be out there and see the consumer response, uh, which has been really enthusiastic. Uh, and I think the best way that I've been able to articulate those people, uh, who know and love the
Brand say, it looks like olaplex and what it deserves to be the second piece was the design to defy platform which launched in April and and that's really the way to think about that. Uh and translate the the marketing strategy is this is the broader purpose that our brand needs to live up to and really ties together the way in which we go to market. So you have the visual identity and then you have the ways in which we're taking that and bringing it to life. Uh, that is also a first for this brand. Uh, and those were the metrics that I was referring to earlier on the call in terms of some of the really positive responses to the initial launch of that. Uh and really what we're able to showcase for our brand. The third phase, I would say we're we're still in, in mid build, we did, um, some great work around this Summer's ra and really building a full funnel content engine, uh, and there'll be a lot more to come as we get into the second half. And that's really, really critical, uh, to our growth across different channels. And the way to think about that, when when we speak about that language is really
Not just the upper funnel. Not just how the brand looks but every single touch point and connecting every single dot, uh, in the case of the pro for them. And, and in case of the consumer education is very important part of that. Uh, we talked on the call today about, uh, some of our initiatives there. So it's it's really about getting that in full flywheel going. Uh, so a lot more to come with that. And, and in my experience, 1 gets better and better every single launch, every single quarter. And that's really what we'll be focused on if we remember, uh, Katie, our CMO
How she just hit her 1 year anniversary. So I think we're we've made, tremendous progress, um, and The Talented organization that she's building to support that effort.
The next question comes from the line of Rob uttan state with evercore, isi, please proceed.
Conditioning Trends display, uh, in the past you would had some in-store uh sort of sales help at 1 Point another and also perhaps touching on um Channel cannibalization, thank you.
Yeah, happy to talk about that. I think, uh, you know, as we mentioned earlier on the call, I think, looking at the year to date results is probably the most, um, indicative of where we are in that specialty, retail was down, 3%, and we are seeing sequential improvement in our sell through, and our key Retail Partners. So, we feel good about the progress there. Uh, we actually, you know, we don't talk about specific shelf space, but if you were to walk into a Sephora walk into an Ulta, you would see new merchandising you'd see the brand, uh, often in secondary exposure and places where it makes sense. Uh, so we, we really, it's been 1 of the most important efforts to make sure that we have really strong relationships, um, with our critical Partners in retail. Uh, I work on those personally. Our chief Revenue officer Michelle who joined in December spends a lot of time with those Partners. Uh and we feel really great about those relationships.
The next question comes from the line of Ashley helgen's with Jeffrey's please proceed.
Hi, this is Sydney on for Ashley, just wondering, can you talk a little bit more about what you're seeing in the salon channel in terms of stylists sentiment and kind of the, the health of that channel for for the stylist, as well. And then a recent company report, uh, called out seeing kind of a trend of lower maintenance, more natural hair color looks, you know, are you seeing that? And kind of, when we do have those Trend Cycles. How does that affect your business? Thank you.
Or happy to take that 1. I think as we've been talking about this channel uh, really since I joined, I think we have reflected upon a channel that has shifted, uh, postco and how it operates that there. As you mentioned there, there's certainly different ways in which, uh, women are coloring their hair. Uh, and you're right. There are certainly less frequency in the needs, and some of the styles that they also wear them longer that does impact the frequency at which, uh, the consumer is visiting, the salon and, uh, does put pressure on that channel. I think it's the reason that we really believe in things like our Pro scalp treatment and bond curl shaping. Uh, on shaping treatment is really bringing other reasons, uh, for someone to come to the come to The Stylist. So, it's an important thing in which we even talked about Within These blitzes is like, how do we support those businesses? So, for us a strong Pro is, is certainly something that we believe in. And I think there remains a lot of opportunity in in that church.
Channel. But in certainly 1 where you're right. There is there are some shifting Dynamics, but we certainly believe that we can work within them.
The next question comes from the line of Kate. Grafstein with sparkly, please proceed.
Talk about your performance in the professional channel, uh, in the US versus International. And if, uh, the professional Channel outside of the US has inflected positive. Uh, we were wondering what's driving that? Thank you.
We don't break out geography within different channels, but I'm happy to talk to you a little bit more, uh, about what's happening in our international business. Uh, as we talked about today on the call because it certainly is a significant portion of our business. I think we see similar Trends and, and I've personally visited nearly every single 1. I've got a few more to go this fall, um, of our largest markets, uh, to really get on the ground and make sure that that I really understand what's happening within the channels. And I would say, what I've seen is is a lot of consistency. Uh, and and some of the things that you, that we've reflected on, in terms of where the pro is and their own business where the retail business is where ollex is is a, as a, as a player within those channels. So I think that's really great news for us because that means that the strategies that we're implementing here in North America, really should be able to translate and so all of our work around International
Uh, execute our strategies there, and certainly, we are still in the early days. There's a lot more to come, and we'll keep you posted as that unfolds. Yeah, I'll just add on a little.
you know, internationally as
it is important to look at it year to date which we're down a bit. And we're working to build sustainable revenues across all the regions and our channels. And if you look at the second quarter International growth, we're just natural es and flows that are quarterly basis as we're in the middle of transformation. So, that's again, why we're consciously putting everybody towards the year to date Trends. Um, and when you think about like all the work that Amanda is referencing, whether it be in Pro, or specialty retail, what does it look like we? You know, we are renegotiating contracts, 1 by 1 ensuring. Our partners are really set up for success for the long term, right? Beside us. And this timing is not 100% controllable. Depends on when things come due and finding the right partners and more and that is the same in all channels. So um, just a little bit more color. I want to manage it.
The next question comes from the line of John and Kim with TD Cowen. Please proceed.
Thank you for taking my question. Um, as you continue to focus on transforming the brand. Um, how are you thinking about the marketing spend level especially in the second half, as you contrast that with the first half and any changes in in your marketing campaign, or, or spend around the holiday season this year, would love to get additional color around there. Thank you so much.
Yeah, so I can I can speak to it uh strategically and and I think we've certainly referenced this along the way that we are learning a lot every single day about what we believe is the appropriate level of marketing, spend for the business. I think we feel good about where we are now and, and our plans going into the second half. The second half is for us is an important half. Uh, 1 of the things I've always thought is impressive about this business, is that holiday is an important part of our business. I think it shows a lot about the brand, um, that it plays well during that time period. It's also a very, it's a great part of the business for the pro when you think about the business that's driven in salons during that period. So we feel you know again very excited about what's coming up. This fall. Uh and both are Innovation as well as our holiday plans and the progress that we've made in our marketing engine that we were talking about before. Uh we're we'll continue to make that throughout the second half of the year and and quite frankly all the way into the future.
Um, yeah, and I would just add that, you know, your question was specific to marketing, but as we think through, you know, what are all the Investments that we're making, that are leading us to, you know, reasserting our IBA margin guidance for the year. Um, you know, our investments are aligned around the 3 Priority or generate demand harness Innovation and execute with excellence and our investment in marketing is the largest and is not set. Not only marketing. That's tied to short term sales but building on the base which are strategies aligned for the future. So, we're, we are relaunching the brand and that's a long term Roi. And then, on top of that, we layer on Innovation where we're investing there, to strengthen our Innovation pipeline, not just for this year, but for the future and all that is enabled by investing in new teams and ways of working, which we would expect to see leverage over time. So we see the ultimate potential in all of our investment strategies coming together.
And we're encouraged by the progress so far.
Got it. Thank you.
And the next question comes from the line of svana Chow hery with JP Morgan please proceed.
Got it. Thanks for taking our question. I just wanted to quickly ask on, um, your International sales, things selected in the quarter, and things are providing all the details earlier. But can you shed some light on the progress you've made so far in the distributor rationalization process in markets outside the US? And another question, um, on the carrier front, um, you reiterated that there's no uh material impact this year, but then again, you also said earlier, that 1 of the mitigating, leverages pricing,
With the least uh on products that has the least elastic impact.
Can you tell us when this pricing, is expected to go in? And also, how is this pricing? Or selective? Pricing infrastructure posted against your schedule. A promotional events in the back half.
Thank you.
Iterated on the international business. Uh, we have moved out of planning mode into execution mode and so we're we're starting that those processes but that's sort of the detail that I'd share at this point. Uh, with respect to Tara, I think we spoke about this on the first call, uh, that given where our product is is manufactured, which is primarily in the United States. We don't see that as a as a large issue so I'm I'm I'm not sure, I know the pricing.
Reference that you're making in the question. Well, it's one of the things that we could do if we could do. Yeah, stated it but as Amanda said, you know, 95% of our finished goods are sold in the U.S. or manufactured in the U.S. So we have, at the North America company, very limited exposure.
As we see the events today, it's a fluid environment.
Thank you.
There are no further questions at this time, and I'd like to turn the call back to Amanda Baldwin for closing remarks.
Just wanted to say thank you to everyone for joining us this morning. We wish everyone a great day.
This concludes today's conference, you may disconnect your lines at this time.
Enjoy the rest of your day.