OLPX

Olaplex is a high-gross-margin (69.4%) prestige hair-care brand mid-way through a self-described 'business transformation plan' and an international distribution 'reset' that management openly warns 'has caused recent volatility in certain channels and geographies.' After a brutal top-line collapse from $704M (FY2022) to $423M (FY2024), FY2025 revenue was essentially flat at $423M (+0.1%) — the first sign the bleeding has stopped. Underneath, the mix is improving: professional +5.5% and DTC +3.1%, offset by specialty retail -8.3%. Gross margin even ticked up to 69.4% as obsolescence write-offs fell ($5.6M vs $7.8M). So the demand side looks like it is troughing rather than imploding.

The problem is profitability. Operating income cratered 89.6% to $6.95M (1.6% margin, down from 15.8%) and the company swung to a $9.25M net loss. The cause is a 33.8% SG&A surge: +$26.7M advertising, +$16.0M legal/professional fees, +$9.3M Purvala acquisition costs, and +$8.9M payroll/realignment. Notably, a chunk of that is arguably non-recurring (the $9.3M deal costs, the legal spike) or a deliberate growth bet (advertising), so underlying earnings power is better than the headline loss — but it is still a long way from the ~24% operating margins of FY2023. The transformation is the entire thesis, and the filing repeatedly flags it 'may result in higher than expected costs, loss of customers, reduced sales volume' and may 'take longer than anticipated, if at all.'