Moody's downgrades Olaplex

Moody's Investors Service said it downgraded Olaplex Inc.'s ratings including the company's corporate family rating to B3 from B2, its probability of default rating to B3-PD from B2-PD and the first-lien senior secured credit facility ratings to B3 from B2. 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 is unchanged.

“The ratings downgrade reflects challenges that Olaplex is facing to stabilize its revenue and earnings trajectory even with additional investment in the brand and marketing. With the company's revised 2023 guidance, gross debt to EBITDA will increase to above 5x with Moody's adjustments.

Moody's said it forecasts Olaplex's debt to EBITDA to weaken to 5.7x in 2023 and improve to around 5x in 2024.

The outlook is stable.

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