Good morning. Joining me today are J.P. Bilbrey, Interim 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, which are forward-looking, including statements about the outlook of 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 statements. 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 that 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. Also during this call, management will discuss certain non-GAAP financial measures, which management believes can be useful in evaluating the company's performance. 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 GAAP 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. 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. The company has not independently verified the accuracy or completeness of the data contained in these industry publications and any other publicly available information. Furthermore, this information involve assumptions and limitations, and you are cautioned not to give undue weight to these estimates. With that, I will turn the call over to J.P. Bilbrey.

Thank you, Patrick, and good morning, everyone. It’s a pleasure to be with you today. I joined Olaplex’s executive chair in July 2023 because I saw an innovative company with a special brand. A leader in the attractive high growth and resilient Prestige Hair Care category, offering product differentiated by patented technology that delivers superior performance. Since joining the company, I have been spending my time digging in to the business, trying to better understand both our strengths and our areas of opportunity. For this process, I've developed a stronger understanding odds and appreciation for the competitive differentiators that make Olaplex unique. I have conviction in the potential for long-term growth and the opportunity to create significant long-term value. The passion of our loyal base of professional stylists and consumers is strong. I see significant opportunity for consistent, sustained growth as we evolve out portfolio with new technology leading innovation and build our business in attractive geographies and I believe our advantage business model will allow us to continue to deliver top tier profitability and cash generation. That being said, the business has faced several headwinds over the past year, including our own execution in the face of increased competition.I believe though that we're at a pivotal point in the company's evolution and the next phase of growth for Olaplex. It requires a different level of focus and improvement in brand building capabilities. My goal is to enable a path to long-term profitable growth and make the company stronger ensuring we have the right structure, tools, and operating systems in place to achieve our goals.To that end, I've been focused on leading 3 key initiatives since I've joined Olaplex. First, I've been overseeing the redesign of our integrated business planning processes to improve forecast innovation delivery and overall business performance…

Thanks, J.P. and good morning, everyone. Last quarter, we communicated that stabilizing our sales trends in the second half of 2023 was a top goal. We believe our Q3 results delivered solid progress against that goal. Our demand trends are stabilizing suggesting that our increased investment in the business is yielding positive results.I'd also like to share the following commentary on the progress we've made. First, aggregated sell-out sales dollars remained relatively consistent sequentiallyin Q3 with Q2 sell-out on an absolute dollar basis. This is a key metric we're tracking in terms of what we mean when we say stabilizing the demand trend. Second, there was little difference this quarter between our reported net sales decline of minus 30% versus prior year and the sell-out trend in our key accounts, which was down 28% versus prior year. As we continued the glide path to right size customer inventory levels for current levels of demand. As mentioned last quarter, we believe the months on hand inventory position at our major accounts on our core items remain in a good position. Next, olaplex.com performance remains strong, posting a second consecutive quarter of positive year-over-year growth. This channel has benefited from our increased marketing investment, particularly in upper funnel activations. In that regard, we continue to measure positive impressions of the brand from the Strength Starts Inside campaign with notable campaign lifts in brand awareness, consideration and affinity, and a more than $3 million increase in earned media value since the start of campaign. We believe this is cause for optimism for the broader business. Additionally, we increased our activations in the professional channel during the third quarter and have already observed positive early indicators from this work. With a holistic approach to increase our visibility with stylists and demonstrate our commitment to…

Thank you. We will now be conducting a question and answer session. [Operator Instructions]. Our first question comes from the Susan Anderson with Canaccord Genuity.

Good morning. It's Alec Legg on for Susan. Just on the sell-outs, you mentioned it was starting to stabilize and are down 28% compared to 26% in the first half. I guess, can you talk about the exit rate of the sell-outs in the quarter?Just how the retailers are feeling about stocking levels and then maybe any incremental details on a unit basis just to kind of account for the promotional levels too.

Thank you. Hey, Alex, it's Eric here. Thanks for the questions.So yes, first I would just say, again, we're pleased with Q3 results delivery in line with our expectations, the sharpening of our guidance for the year, which we believe show good progress against this goal of stabilization.What do we mean by stabilization, one of the ways in which we've been talking about that is looking at absolute sell-out dollars, trending over time and stabilizing that trend and what we saw in the end of third quarter was good progress against that so stabilizing the sell-out trend versus Q2 was relatively the same in absolute dollars versus Q2 and to your separate question, we saw sell-out and sell-in trends, very similar. So we believe that we're passed and through the customer inventory rebalancing that we've experienced as a headwind earlier this year and that our key customers, our core items are all at healthy levels of inventory and weeks on hand. So, that's the key.The stabilization is the absolute dollar trend being relatively flat in the third quarter versus the second quarter happens to be a -28% sell-out trend in the third quarter and on a unit basis that was the last part of your question, we actually saw our average price tick up a bit in the third quarter versus the second quarter. As we continue to be less promotional on average than the rest of the category, but we are participating in some promotional events that we think are important for our customers, for our stylists and our consumers, especially when we see an opportunity to do that strategically and to acquire new customers, but not more promotional in the third quarter than previously and less than the category average.

Thanks. And then just on the overall operating or EBITDA margins, I guess, how are you thinking about balancing the gross margins of operating costs as you ramp up marketing?And then like you said, compete with other brands when it comes to promotions?

Sure. Well, let me start with gross margin.We know, and we've stated we've been dealing with some headwinds this year on gross margin, particularly around the actions we're taking on excess inventory levels on our side and in some cases promoting through, some of the slower moving items of excess inventory at our customers.Those are the big headwinds we've been dealing with in gross margin this year.We still believe as we've stated, that as we get through those headwinds, we see gross margin returning to that mid-70s range that we've been at historically and that will continue to support the investment levels that we want to put elsewhere in the P&L. We talked about as a priority this year in 2023, increasing our sales and marketing investments to get our message out.To be proactive about the Olaplex message, building awareness, building brand equity, really building the brand and we've been following through on that priority this year and we'll continue to do so. We we're measuring.We've talked about this as a test, learn, and optimize approach to our sales and marketing, and we're very much using the data and using the ROI analytics to direct that spend where we think it can perform the best for the brand.We see that in the upper funnel with our Strength Starts Inside campaign. We've been partnering with an analytics firm on at the marketing mix modeling around that and as we mentioned in the call, we use that information toredirect some of that spend to the best performing assets in the best performing channels. And we certainly also see it in our lower funnel marketing spend.So some of our performance marketing, whether it be in olaplex.com and some of our e-commerce platforms and retailer.com where we get very strong ROI and ROAS metrics as well.

That's very helpful. Thank you.

Our next question comes from the line of Rob Ottenstein with Evercore ISI.

Great thank you very much and appreciate you doing this call and bringing Amanda on. Look forward to meeting her soon.So the two questions, one, can you give us an update on where the social media buzz is, your ability to monitor it and counteract it and whether you see that still as a drag on the business now or is that dissipating in your view?And then second, perhaps go into a little bit more detail on what's going on salons, why this deep decline still and whether you have any kind of readout on the sell-out usage on the stylist level?

Absolutely. Thanks for the questions. First, on what we call the social media buzz, I would break this into two parts.One, just sentiment about the brand, right? We've talked about some of the misinformation in the past and that negative media and some sentiment in the first quarter of the year and we've really seen the sentiment improve and pick up and mentions negative mentions in social media drop pretty significantly as we've traversed through the year and as we've been investing to drive that narrative and correct misinformation in the market.So we've seen good progress there and the second part I would use to answer that question is what we talked about earlier in the call around earned media value.So this is an area that we've been investing in and we believe the big multiplier on our own marketing investment.We talked about how we've returned to the Number 2 position in earned media value in the haircare category in the U.S. in the third quarter and actually exited the quarter Number 1 on the back of a really successful campaign we had. So we're seeing good progress there. That's part of what we're talking about when we say we're making good progress on stabilization.And your second question was about the pro channel and again, last call, we talked about this area where we going to accelerate our investments in the balance of 2023. We've done that. We believe we're seeing green shoots from that and those activities resonate with the stylist community as well. The sell-out trend in Pro has been very similar to the trend we've seen elsewhere in the business, particularly similar to what we've seen in Specialty Retail.If I think about the third quarter and the stable trend we've seen frankly as we traverse through the quarter, if anything we saw Pro actually pick up a little sequentially as the quarter went on as those investments took hold.So we're quite pleased to see that as well.

Our next question comes from the line of Olivia Tong with Raymond James.

My first is just around what you're seeing in terms of the key drivers of the sequential improvement in dollars in Q3 and if we back into Q4, it looks like it doesn't necessarily continue in 4Q. I imagine that the holiday sell-in was part of that.If you smooth that out, if you could talk about the sequential trends that you're expecting, and then also in terms of exit rate on consumption, if you could talk to October trends, what you're seeing so far, and then just generally your view on what stabilization looks like over the next 12 months.

Thanks, Olivia. Absolutely. So, I'll start with this question around the progression through Q3 and Q4. And I'll startby maybe just talking about sell-in in the third quarter and then I'll talk about sell-out.So in terms of our net sales or what we call sell-in performance, Direct-to-Consumer have the strongest performance then followed by Pro and Retail in the third quarter when you look at those net sales declines.From a sell-out perspective in the third quarter, again, Direct-to-Consumer was the strongest and then Pro and Retail were actually quite similar in the sell-out decline trend.So let me explain why, what are the differences there? First of all, in Direct-to-Consumer, it's worth noting that the sell-out was better in the U.S. Our own olaplex.com, we talked about that growing again for a second consecutive quarter versus prior year. And even customers like Amazon, on the back of the investments we've been putting into that part of the business.Our DTC business was a little bit weaker internationally as we've held back on some investments to manage some of the market dynamics there. So just thought it would be helpful to give that additional color on Direct-to-Consumer.In Pro, as I just mentioned earlier, actually the cadence through the quarter is actually a slight improvement as we exited Q3 on the back of the investments we put in place there and in retail, we sold in less holiday kits into the Specialty Retail channel in the third quarter of this year versus the third quarter of last year.That's appropriate. That's to measure it with the other trends we've seen in the business and that's the reason why the sell-in or the net sales decline on Specialty Retailis a little bit worse in the third quarter than the sale out.So then you asked about what…

Our next question comes from the line of Dana Telsey with Telsey Advisory Group.

Hi, good morning, everyone. As you think about the expense structure of the business, Eric, and obviously the marketing investment this year, over next year or 2025, what is the expense structure of the business?How do you look at the puts and takes and what could be seen as a steady state and also on new products how are you thinking about new products going forward and timing?

Again, I would just say that our focus has been stabilization of the trend in the balance of 2023 and investing in our sales and marketing with this test, learn, and optimize approach which we believe is really helping drive that stabilization of the demand trend and setting us up for the right foundation, the right capabilities and poised for return to growth in future.We're not going to comment here on what that investment level looks like in 2024 or 2025. We intend to come out with our 2024 guidance at the right time that would, by precedent beyond our next call, our Q4 results call and we look forward to sharing more at that time.In the meantime, we're going to continue to invest behind the brand where we see opportunities and the other part of your question was new products where we still believe this is one of the big reasons that we have such, such big opportunity ahead of us.We remain and we still have a quite a limited assortment. If you know, when you compare us to other Prestige Hair Care brands, in the category.We're pleased with the new products that we've been launching, even in 2023, our LashBond, our Dry Shampoo, most recently our Purple Conditioner, these are all new segments for the Olaplex brand and therefore, we believe are adding some incrementality to the business and we're really excited. We've always talked about having a strong pipeline, a multiyear pipeline, and we look to continue launching new highly incremental science-driven technology-driven differentiated products to the category for many years to come.So that's certainly what we expect to be a tailwind for growth in the business in the future.

Our next question comes from Korinne Wolfmeyer with Piper Sandler.

I guess just to piggyback off of that last question, around the innovation pipeline.I mean, historically I guess in the past couple of quarters, you've talked about maybe some slower uptake of those newer products. Can you discuss what you've seen with those new launches here in this quarter?And what you're doing to help the uptake of new product launches be a little bit stronger, if that's really going to be a key driver going forward?

Absolutely.Like I said, we're pleased with the performance of these new products. When we look at how they're performing within their segments in the category, they are up there top 5 typically in terms of top 5 selling SKUs within that segment.Not all these segments are the same size, some are a little bit smaller than others, but we're happy with how they're performing within those segments and we believe they're also helping to develop the market to actually drive further growth in the category and for our customers in those segments.What I would say is, as the overall Olaplex brand has faced the headwinds that we've talked about throughout the year, our innovations have also felt that that halo of headwinds across the brand.So still performing well in the relative context, but let's say not as big as some of our innovations in the prior year just as, you know, the entire brand has faced those headwinds.What are we doing? We're getting better and better with each launch at execution and with the marketing plans and 360 marketing campaigns we're putting behind those launches. I think an important thing to note here is our plans are going to be not to launch and then move on.We also want to continue supporting those new products in year two, in year three to make sure we see them become long lasting, sustainable parts of the portfolio. That's always been a key element of our innovation strategy and so for that last part of your question, I would say hey, it's going to be that year two support and finding those additional moments to activate against the launches that we've had, for example in 2023 and that's our plan.

Got it. Very helpful and then if I could just touch on the DTC segment again, I know we touch on this briefly earlier in the Q&A, but you know, the DTC in the olaplex.com was positive and it seems like you know, where there were some quarterly dynamics that caused, you know, the overall DTC weakness.As we think about Q4 and then even into the early part of 2024, is it reasonable to think that that segment could return to positive growth as olaplex.com is delivering positive growth or is it there still some other dynamics going on that would cause it to still be negative?

Yeah. I would just say similar to the entire business focuses on stabilization and then returning to growth. Just as a reminder for everyone, when we talk about our Direct-to-Consumer channel, we're talking about olaplex.com in the U.S. and around the world, as well as Pure Play e-commerce retailers like in Amazon, doesn't include retailer.com, like a sephora.com or ulta.com that gets captured in our Specialty Retail sales. So I would just say, we continue to see relative strength inDirect-to-Consumer, in large part because of the investments we've been putting not only in the lower funnel against that channel but also as we think about the upper funnel investments we've made the Strength Starts Inside campaign, that's pointing consumers to learn more about the brand, to go to olaplex.com and we really believe this is one of those green shoots we're seeing from the investments we've made that are driving the stabilization and even in olaplex.com's case already driving year-over-year growth again.So there's a little bit of noise in sell-in andsell-out, as you mentioned, and as I talk through earlier, but we continue to see this channel having relative strength and that being very, very promising for the momentum we're building.

Our next question comes from the line of Sylvania Chaudhary [ph] with JP Morgan.

Thank you for our questions. In yourprepared remarks you mentioned participating in some promotional events where you see an opportunity to acquire new customers and participation in key promotions more.Can you just add more color, especially, as previously the company's stance was not too keen on promotions and also more on a broader level, how has your marketing plans overall changed on a with the change in management.

Thank you so much for the question. So let me tackle the promotionality question first.This is very consistent with what we've talked about in the past, really, in that it is not our strategy to over promote the Olaplex brand. We don't think that's right for the equity of the business.When you look at the data, we continue to promote less than the category average, but we do see important moments and events with our customers, stylists and consumers, where we think it strategically the right thing to do to participate. We've been pretty consistent about that throughout the course of the year.We're seeing good results when we participate in those events and we're often just looking for the angles,how do we make this as strategic as possible? How do we drive new customer acquisition?How do we drive further penetration through the regimen to make sure that that we're using that as a way for consumers and stylists to buy deeper into the regimen as well and we're pleased with those results so far and we can expect to continue that. In terms of any changes to our marketing investment or strategy with a change of management, as J.P. mentioned earlier, Amanda Baldwin, we're so excited that she's going to be joining the company in the middle of December.She has incredible experience in building brands and in driving marketing capabilities and we are really excited about what Amanda is going to be bringing onto this business as well.So that's not a change in our marketing strategy quite yet, but I'll just point to the comments I made earlier about testing and learning and optimizing. We are using our marketing mix modeling analytics to optimize and shift our spend as we go.So in our Strength Starts Inside campaign, we noticed that certain assets were performing better than others and marketing channels were performing better than others.We were able to take that information anddeploy that into how we want to invest that money in the fourth quarter.

Thank you. Our last question is from Jonna Kim with TD Cowen.

Hi, it's Tom Nass on for Jonah. Thanks for the question.Can you talk a little bit more about the dynamics you're seeing in market share trends and the competitive landscape and then just how does this play into your expectations for the balance between domestic and international growth ahead?And then lastly, if you could just provide an update on what you're seeing in terms of growth of the overall Prestige Haircare category.

Thanks, Tom. Great question.So let me start with market share trends. Very consistent. When we talk about stabilization of the sell-through trend, it quite naturally translates to relative stabilization of our market share trends as well that’s what we saw in third quarter versus second quarter, is that market share largely, stabilized and steadied out and that's the right base, right? The idea is you stabilize the demand trend here with a very healthy foundation for the business and then return it to growth.We think there's tremendous opportunity for value creation on that path. So market shares stabilizing. Between Domestic and International, you saw in the third quarter similar sales declines between the U.S. and International what we've said in the past is consistent again here in that some of our bigger international markets English speaking markets, the UK, Canada, Australia, have followed a similar trend, and similar headwinds, frankly, to what we've seen in the U.S. Now, that means we're also starting to see similar stabilization trends in those markets as we've also selectively increased our investments in those markets whether it be in PR or in some of upper funnel marketing investments that we've made in the UK and Canada specifically. Aside from that, what we're seeing is growth and really promising green shoots in some other international markets that we've talked about previously. Southeast Asia, the Middle East, cross borderecommerce in China and France and the Nordics in Europe as well.These are all markets that are smaller for us today but we believe we're seeing some really promising, momentum that is going to certainly pay dividends for us in the future.And last but not least, you asked about the category. We continue to see Prestige Hair Care globally as a very attractive and resilient category and it's continued to grow.That's continued to grow strongly in the U.S. We expect that to continue, frankly, in the fourth quarter and into 2024 and beyond as well.Yes, there's a little bit of a segmentation there front of Salon. So the pro-channel has been a little bit more challenged with macro pressures, but retail and Direct-to-Consumer have fared quite resiliently in 2023 and we expect that to continue. So we are in a very attractive category. We are focused on stabilization and doing all the right things to put the right foundation in place to return this business to very profitable growth.

Thank you. We have reached the end of Q&A session. I'll turn the call back over to Eric Tiziani for closing remarks.

Thank you very much.Thank you everyone for joining us today on the call. We appreciate your continued interest in the Olaplex business. Please reach out if you have any questions and we look forward to speaking to all of you again very soon. Thanks again. Have a great day.

This concludes today's teleconference. [Operator Closing Remarks].