What Happened?
Shares of hair care company Olaplex (NASDAQ: OLPX) fell 8.7% in the morning session after the company's second-quarter 2025 earnings report revealed a mixed performance, as its first revenue growth in nine quarters surpassed expectations, overshadowing a swing to a net loss. The premium hair care company's net sales increased 2.3% year-over-year to $106.3 million, beating analyst forecasts and marking its first positive sales growth in nine quarters. However, this top-line beat was contrasted by deteriorating profitability. The company swung to a GAAP loss of $0.01 per share, which was in line with analysts' estimates but down from a profit of $0.01 per share in the same quarter last year. The decline in profitability was driven by a significant drop in its operating margin, which fell to -1.1% from 15.7% a year ago, as expenses like marketing and administrative overhead increased. Despite the lower profitability, investors appeared to focus on the better-than-expected revenue and the return to growth, which sent shares higher.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Olaplex? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Olaplex’s shares are extremely volatile and have had 52 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 16 days ago when the stock gained 8.3% on the news that the company announced strategic additions to its Board of Directors, signaling a renewed focus on growth and innovation. The haircare company appointed two seasoned retail and consumer brand veterans, Jerome Griffith and Pamela Edwards, to its board. Griffith formerly served as the CEO of Lands' End and Tumi, while Edwards was the CFO for Citi Trends and Victoria's Secret. Olaplex's CEO, Amanda Baldwin, stated that the appointments were a top priority in building a best-in-class team to execute the company's new chapter grounded in health and beauty innovation. The stock also appeared to benefit from a broader rally in the consumer staples sector. Investors seemed to flock to defensive industries on signs that shoppers continued to spend on essential goods, including personal care, despite economic uncertainties.
Olaplex is down 23.4% since the beginning of the year, and at $1.30 per share, it is trading 50.6% below its 52-week high of $2.62 from September 2024. Investors who bought $1,000 worth of Olaplex’s shares at the IPO in September 2021 would now be looking at an investment worth $52.86.
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