Waldencast Reports Q1 2025 Financial Results

Q1 Net Revenue of $65.4 million, (4.1)% decline from Q1 2024

76.4% Adjusted Gross Margin, an improvement of 10 basis points

$4.4 million of Adjusted EBITDA

LONDON, May 13, 2025 (GLOBE NEWSWIRE) -- Waldencast plc $(WALD)$ ("Waldencast" or the "Company"), a global multi-brand beauty and wellness platform, today reported operating results for the three months ended March 31, 2025 ("Q1 2025") on Form 6-K to the U.S. Securities and Exchange Commission (the "SEC"), which are also available on our investor relations site at http://ir.waldencast.com/.

Michel Brousset, Waldencast Founder and CEO, said: "As anticipated, in Q1 2025, Milk Makeup results were impacted by the cycling of the very successful launch of Jellies in Q1 2024, as well as the significant inventory reduction at the retail level versus a year ago."

"Despite a broader slowdown in the prestige beauty category in the U.S., Milk Makeup ended the quarter on a very strong note, fueled by the highly successful launch of Hydro Grip Gel Tint, which sold out shortly after release. We are also very pleased with the brand's entry into Ulta Beauty, with retail sales beginning in late February. Both initiatives exceeded expectations and contributed to the brand's high single-digit growth in U.S. retail sales. This solid domestic performance was offset by the contraction of international sales, which faced a difficult comparison against last year's Q1 distribution expansion, as well as inventory reduction by retail partners. In Q1, Milk Makeup partnered with Nike Running in North America for the Nike After Dark Tour in Los Angeles, bringing sport and self-expression together to keep expanding reach and deepen community engagement."

"The Obagi Medical brand delivered a solid performance in the first quarter, although out of stocks in some key SKUs dampened volume growth. We are accelerating ongoing efforts to transform our supply chain--consolidating third party logistics partners and enhancing operational capabilities--to improve fulfillment, increase reliability, and support long-term, scalable growth."

"Despite a difficult quarter, we continue to increase our investments in marketing, up in the high teens, to fuel brand equity and set a strong foundation for delivering our long-term ambitions, starting with our 2025 objectives."

"We are confident in our ability to deliver a stronger performance throughout the remainder of the year, beginning in Q2. Key drivers include a robust pipeline of breakthrough innovation at both Milk Makeup and Obagi Medical, combined with restocking of Hydro Grip Gel Tint which is expected to fuel continued consumer demand. We also anticipate a meaningful uplift in Milk Makeup volumes from the successful Ulta Beauty launch. Additionally, ongoing improvements from Obagi Medical's supply chain restructuring are expected to enhance fulfillment rates and operational resilience," concluded Mr. Brousset.

Q1 2025 Results Overview

Please refer to the definitions and reconciliations set out further in this release with respect to certain adjusted non-GAAP measures discussed below which are included to provide an easier understanding of the underlying performance of the business, but should not be seen as a substitute for the U.S. GAAP numbers presented in this release.

For the three months ended March 31, 2025 compared to the three months ended March 31, 2024:

Net Revenue decreased 4.1% year-over-year to $65.4 million.

Gross Profit was $47.2 million, while Adjusted Gross Profit totaled $50.0 million, or 76.4% of net revenue, an expansion of 10 basis points compared to the prior year.

Net Loss for Q1 2025 was $20.7 million primarily driven by Depreciation and Financial charges. Non-recurring legal and advisory expenses totaled $1.5 million, continuing their decline from prior quarter.

Adjusted EBITDA was $4.4 million, or 6.7% of net revenue. The year-over-year decline reflects sustained investments in sales and marketing, and G&A deleverage stemming from lower revenue.

Liquidity: As previously announced, during Q1, Waldencast secured a new $205 million five-year credit facility, comprising a $175 million term loan and a $30 million revolving credit facility ("RCF"). This refinancing replaces the previous bank loans, enhances financial flexibility, and extends the Company's debt maturity profile to March 2030, supporting long-term strategic priorities.

As of March 31, 2025, the Company held $10.8 million in cash and cash equivalents, $172.1 million in net debt, and approximately $22.5 million in available capacity under the RCF. The increase in net debt during the quarter is primarily due to refinancing-related costs. Cash consumption reflects lower Adjusted EBITDA and an inventory build-up to support expected sales growth in future quarters.

Outstanding Shares: As of April 30, 2025, we had 123,011,239 ordinary shares outstanding, consisting of 112,644,711 Class A shares and 10,366,528 Class B shares. As of December 31, 2024, we had 122,692,968 ordinary shares outstanding, consisting of 112,026,440 Class A shares and 10,666,528 Class B shares.

 
 
(In $ millions, 
except for 
percentages)          Q1 2025  % Sales  % Growth  Q1 2024  % Sales 
-------------------   -------  -------  --------  -------  ------- 
Waldencast 
    Net Revenue          65.4   100.0%    (4.1)%     68.3   100.0% 
    Adjusted Gross 
     Profit              50.0    76.4%    (4.0)%     52.1    76.3% 
    Adjusted EBITDA       4.4     6.7%   (61.5)%     11.4    16.6% 
 
Obagi Medical 
    Net Revenue          36.2   100.0%      7.1%     33.8   100.0% 
    Adjusted Gross 
     Profit              29.7    82.0%      7.9%     27.5    81.4% 
    Adjusted EBITDA       5.9    16.3%   (12.5)%      6.7    20.0% 
 
Milk Makeup 
    Net Revenue          29.3   100.0%   (15.1)%     34.5   100.0% 
    Adjusted Gross 
     Profit              20.4    69.5%   (17.3)%     24.6    71.3% 
    Adjusted EBITDA       4.4    14.9%   (56.4)%     10.0    29.1% 
 
 

First Quarter 2025 Brand Highlights:

Obagi Medical:

   -- Net Revenue reached $36.2 million, up 7.1% from $33.8 million in Q1 2024. 
 
   -- Growth was fueled by continued strength in the direct-to-consumer 
      channels. The benefits from transitioning to a first-party model with our 
      primary e-commerce distributor have now fully annualized. 
 
   -- The Physician Dispense channel declined in the quarter, largely due to 
      ongoing supply chain restructuring and temporary inventory constraints 
      affecting key products, which limited sales during the quarter. 
 
   -- Adjusted Gross Margin of 82.0% increased 60 basis points from Q1 2024, 
      supported by a favorable channel mix and lower promotional activity. 
 
   -- Adjusted EBITDA was $5.9 million, down 12.5% compared to Q1 2024. The 
      Adjusted EBITDA margin declined by 370 basis points year-over-year to 
      16.3%, primarily due to higher marketing investments and increased supply 
      chain costs aimed at supporting future growth. 

Milk Makeup:

   -- As anticipated, Milk Makeup's Net Revenue declined in the quarter. Net 
      Revenue was $29.3 million, down 15.1% versus $34.5 million in Q1 2024. 
      This result was a combination of cycling a very successful launch of 
      Jellies in Q1 2024 and a significant reduction of retail inventory levels 
      quarter-over-quarter. 
 
   -- Sales momentum accelerated in March, driven by the successful strategic 
      launch of Hydro Grip Gel Tint, which significantly exceeded expectations 
      and led to out of stocks. 
 
   -- The brand also expanded into Ulta Beauty during the quarter, with strong 
      initial sell-out contributing to high single-digit growth in U.S. retail 
      sales. 
 
   -- Adjusted Gross Margin declined by 180 basis points versus Q1 2024, mostly 
      impacted by set-up costs for new retailers. 
 
   -- Adjusted EBITDA was $4.4 million, with an Adjusted EBITDA margin of 
      14.9%. The margin contraction was primarily driven by increased marketing 
      investments and G&A deleverage resulting from lower sales. 

Fiscal 2025 Outlook:

While mindful of the broader macroeconomic environment and assuming no further material changes to current tariffs, including the latest updates on China, we remain confident that our strategic initiatives position us well to deliver on our full-year guidance of mid-teens net revenue growth and an adjusted EBITDA margin in the mid-to-high teens.

Given our high gross margin business model and limited reliance on Asian sourcing, we expect a limited increase in cost of goods with any necessary price adjustments (likely in the low-to-mid single digits) to offset the announced tariff scenario.

Conference Call and Webcast Information

Waldencast will host a conference call to discuss its first quarter results on Wednesday, May 14, 2025, at 8:30 AM EDT for the period ended March 31, 2025. Those interested in participating in the conference call are invited to dial (877) 704-4453. International callers may dial (201) 389-0920. A live webcast of the conference call will include a slide presentation and will be available online at https://ir.waldencast.com/. A replay of the webcast will remain available on the website until our next conference call. The information accessible on, or through, our website is not incorporated by reference into this release.

Non-GAAP Financial Measures

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