Olaplex Holdings Inc. shares sank in early trading after the haircare company cut its full-year sales guidance amid weak demand.

“Retail channels experienced slower demand, and some customers rightsized their inventory positions in response to current trends,” chief executive officer of Olaplex, JuE Wong, said in a statement Tuesday. The company plans to increase marketing investments and remain focused on stabilising demand in the second half of the year, she said.

Olaplex now expects fiscal 2023 sales of $445 million to $465 million compared with prior guidance for sales of $563 million to $634 million.

Shares fell as much as 27 percent in premarket trading in New York on Tuesday before paring the decline.

Sales for the quarter ended June 30 dropped by nearly half, with the professional channel down 61.2 percent and speciality retail down 53.7 percent compared to the same period last year. That fall was worsened by the comparison to a product launch in the second quarter of 2022 and price increases that took effect July 1, 2022.

The haircare company is also battling a lawsuit filed earlier this year alleging that Olaplex products caused hair loss and other problems.

By Tonya Garcia

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