Olaplex reports first quarterly earnings and more

Below, Glossy broke down the most notable moments from recent earnings.

Revlon Inc.
On Nov. 5, Revlon Inc. reported a 9.2% net sales increase to $521 million. Revlon saw growth across all of its reporting segments, including the Revlon and Elizabeth Arden brands, the fragrance division that includes John Varvatos and Elizabeth Taylor’s White Diamonds, and the portfolio division that includes Almay and American Crew.

Coty Inc.
On Monday, Coty Inc. reported in its first-quarter 2022 earnings that revenues increased 22% year-over-year, including a 23% growth in e-commerce sales. Coty’s prestige business, which includes Gucci Beauty and Kylie Cosmetics, reported 35% growth. Kylie Cosmetics’ Birthday Collection and Nightmare on Elm Street Collection turned out to be some of the “best ever,” said Sue Nabi, CEO of Coty Inc., during the earnings call on Monday.

“These launches and drops brought in a very significant amount of consumers who are new to the brand,” said Nabi. “It’s also important to note that with the relaunch, we have made Kylie Cosmetics significantly more productive than the initial range, with fewer SKUs but delivering very high sellout.”

Meanwhile, consumer beauty sales rose more modestly at 4%. CoverGirl was called out for its double-digit sales growth, while Rimmel and Max Factor were mentioned for their successful relaunches.

The Beauty Health Company
The Beauty Health Company, owners of the popular Hydrafacial services, reported strong earnings on Tuesday. Net sales increased 97% year-over-year to $68 million, driven by nearly all markets. Beauty Health Co. raised its top-line guidance for the full year to a range of $245 million to $255 million, and adjusted EBITDA to $30 million, based on the performance of its third-quarter earnings.

But on the day after Carnell announced his resignation, the company’s stock fell by approximately 12% to $25.

“Wall Street investors do not like surprises,” said Saunders in an interview with Glossy. “[But this] is a bit different than other executive transitions. I’ve been hands-on [over] the last year, since [Vesper Healthcare Acquisition Corp] merged with the company [via a SPAC], and have jointly developed the strategies and plans in place. To me, it’s business as usual.”

Strategic plans in place include assessing possible acquisitions as the company raised $900 million in cash through convertible senior notes. Saunders said the company will be eying both brands and other beauty services.

“This is a marathon, not a sprint. We are category creators, and we want to invest and build this [services] category for the long term,” said Saunders. “We want to empower the esthetician. We want to empower the consumer. It’s about building a community, and that doesn’t happen overnight.”

Olaplex
According to the third-quarter earnings report, Olaplex net sales increased 81% to over $161 million year-over-year. Its professional, specialty retail and DTC channels all grew by double or triple digits. Olaplex expects full-year revenue of $580 million to $588 million.

Olaplex’s long-term plan is to increase its sales penetration at Sephora, which currently sits at 7%, according to the brand’s S-1 filing in September. JuE Wong, CEO of Olaplex, told Glossy that, on average, the top-selling brands at any retailer have roughly a 23-30% sales penetration. Olaplex also joined the back-bar program at Ulta Beauty stores in October, but products are not yet available for sale online or in-stores.

“We [plan to] use professional [stylists] to drive authority and credibility,” said Wong. “When you have the authority and credibility [from professionals] and their recommendation to their clients, it becomes a huge validation strategy. When [customers are in-store], that is where conversion comes into play.”

Olaplex also has a robust product launch strategy, which includes an average of three products on a yearly basis. During the earnings call, Wong noted a survey in which 82% of people familiar with Olaplex viewed a potential skin-care category extension “positively.” Wong declined to elaborate on any specific plans or timelines but alluded that 2022 would include scalp products and environmental protection for hair.

Still, Olaplex stock fell post-call on Wednesday by approximately 6%. Jefferies analyst Stephanie Wissink wrote in a research note that Olaplex stock is a “Hold” for now. She said that the company will continue to watch whether supply chain disruptions will interfere with holiday sales and if Olaplex can keep up with its growing number of competitors in the hair bonding category.

The Honest Company
The Honest Company reported its third-quarter 2021 results on Wednesday, with an earnings call held after market close. Honest Co. saw revenue increase 6% year-over-year to $82.7 million for the third quarter of 2021, with skin and personal care representing 31% of revenue for the quarter. According to the earnings release, this growth was driven by additional retail distribution, incremental assortment and investment in the company’s “content, community, commerce” strategy. The Honest Co. said it shifted its business focus to retail distribution, and as a result, its DTC e-commerce declined. Wholesale retail revenue increased 28% year-over-year to $43.5 million, while DTC e-commerce revenue decreased 11% to $39.1 million. Overall, The Honest Co. saw a net loss of $5.1 million for the third quarter, compared to a net loss of $2 million during the same time last year.