Moody's downgrades Olaplex

Moody's Investors Service said it downgraded Olaplex Inc.'s ratings including the company's corporate family rating to B2 from B1, its probability of default rating to B2-PD from B1-PD, and the first-lien senior secured credit facility to B2 from B1.

The first-lien senior secured credit facility consists of a revolving credit facility that expires in February 2027 and a senior secured term loan that matures in February 2029. The company's SGL-1 speculative grade liquidity rating was unchanged.

“The ratings downgrade reflects increased risks that Olaplex is facing to stabilize its revenue and earnings trajectory even with additional investment in the brand. Olaplex's revenue and EBITDA materially declined in the last two quarters as a result of retailers destocking as well as weakened demand for Olaplex's products, hurt by macroeconomic challenges, intensified promotional activities from competitors in the bond-building space, and negative reviews raised from lawsuit and social media,” Moody’s said in a press release.

The outlook is negative.

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