# WALD earnings call intelligence

LOPJLB CallCard / temporal rollup · freemium · [stock page](https://www.lopjlb.com/stock/WALD) · [Earnings tab](https://www.lopjlb.com/stock/WALD?tab=earnings)

Updated: 2026-08-21T05:35:54

Quarters analyzed: 5

## Cross-quarter narrative

Waldencast’s earnings narrative shifted from rapid top‑line acceleration and margin expansion in 2024 to a more cautious posture in 2025. Q1‑Q4 2024 showed sequential revenue growth ranging from +21% to +34.6% YoY, driven by strong prestige‑beauty demand and successful Milk Makeup launches, while adjusted gross margins climbed from 76.3% to 74.3% and EBITDA margins moved into the mid‑teens. Management repeatedly reinvested margin gains into product innovation, broader distribution (UK, Scandinavia, Latin America, Ulta, Amazon) and a $205 M credit facility, but flagged inventory constraints, distributor realignment in Southeast Asia, and a regulatory investigation that began to consume cash. By Q4 2024 the company reaffirmed FY24 guidance and highlighted a mid‑teens FY25 outlook, yet warned that retail inventory adjustments and ongoing investigation could pressure near‑term cash. In Q1 2025 revenue slipped 4.1% YoY as Milk Makeup sales fell sharply and supply‑chain bottlenecks hit Obagi, prompting a maintained guidance but heightened focus on supply‑chain transformation, tariff exposure, and macro‑economic softness. Across the period, the core themes of growth, margin dynamics, distribution expansion, inventory management, and regulatory risk evolved from improving to increasingly uncertain, setting the stage for a turnaround effort in 2025.

## Latest CallCard · Q1

Waldencast Q1 2025: revenue $65.4M (-4.1% YoY) with Milk Makeup -15.1% (strong US retail + Ulta launch) and Obagi Medical +7.1% (supply chain issues); guidance maintained at mid-teens revenue growth, mid-to-high teens adj EBITDA margin; supply chain improvements expected by end Q2; tariff impact man

**Guidance:** maintained — Full-year guidance maintained: net revenue growth in the mid-teens, adjusted EBITDA margin in the mid-to-high teens, assuming no further material tariff changes.

**Tone:** mgmt 0.3 · Q&A pressure 0.4 · divergence 0.2

Management acknowledges Q1 challenges (tough comps, macro, supply chain) but expresses confidence in full-year guidance and excitement about brand momentum, citing end-of-quarter strength and disciplined execution.

### Demand visibility

Moderate visibility with strong US retail momentum for Milk Makeup (Ulta launch, Hydro Grip Skin Tint sell-out) and Obagi digital growth, offset by international tough comps, supply constraints, and macro uncertainty.

Milk Makeup US retail sales grew high single digits driven by Hydro Grip Gel Skin Tint (sold out) and Ulta launch (600 doors). Obagi grew 7.1% despite out-of-stocks on key SKUs. Digital channels for both brands show continued consumer acquisition/retention momentum. International Milk Makeup faced tough comparison to prior-year distribution expansion and later Skin Tint launch. Retail partners adjusting inventory levels. Management expects growth drivers to accelerate in coming quarters.

### Margins / costs

Adj gross margin 76.4% (+10bps YoY); Milk 69.5% (+460bps seq, -180bps YoY due to Ulta setup); Obagi 82% (+60bps). Tariff impact: low single-digit COGS increase for FY25 (already in guidance), with ~10% COGS from China. Supply chain transformation underway to improve fulfillment and flexibility.

Consolidated adjusted gross profit margin 76.4% (+10bps YoY). Milk Makeup adjusted gross margin 69.5%: sequential increase of 460bps from Q4, but 180bps decrease YoY reflecting Ulta launch setup costs. Obagi Medical adjusted gross margin 82% (+60bps YoY). Tariffs: majority of impact in COGS; over two-thirds of COGS US-origin, China exposure ~10% (mainly packaging). Assuming current tariffs (including 30% China tariffs) for full 2025, expect low single-digit percent COGS increase, already reflected in guidance. Mitigation: supply chain flow optimization, selective low single-digit pricing actions, supplier collaboration. Supply chain transformation includes 3PL consolidation and DC network redesign to enhance fulfillment and scalability.

### Capital allocation

Cash $10.8M, $22.5M revolver availability; net debt $172.1M (up from $154.2M due to refinancing costs extending maturity to March 2030). Q1 cash consumption from low adj EBITDA and inventory build for future growth. Expect strong positive adj EBITDA-to-cash conversion for full year. Legal costs declining. Share count ~123M.

End of Q1 cash position $10.8M with additional $22.5M available on new revolving credit facility. Net debt $172.1M vs $154.2M at end of 2024, increase primarily from refinancing costs that extended maturity profile to March 2030. Q1 cash consumption reflects low adjusted EBITDA and increased inventory levels at both brands to support expected future sales growth. Full-year expectation: strong positive adjusted EBITDA to cash conversion supported by disciplined working capital management and low capex. Nonrecurring legal costs substantially reduced and expected to continue declining. Shares outstanding 123M as of April 30, 2025.

### Milestones

- **Milk Makeup Hydro Grip Gel Skin Tint launch** [delivered]: Standout success, sold out quickly due to demand greatly exceeding forecast; strategic complexion category with high repeat and loyalty.
- **Milk Makeup Ulta Beauty launch (600 doors)** [delivered]: Launched late February; strong initial sell-out, high consumer demand, incremental to Sephora footprint, contributing to high single-digit US retail sales growth.
- **Obagi Medical supply chain transformation** [on_track]: Consolidating third-party logistics providers, optimizing distribution center network to enhance operational efficiency and support long-term scalable growth; expect stronger inventory position by end of Q2.
- **Milk Makeup international Skin Tint launch** [delayed]: International launch occurred later than US, resulting in minimal Q1 impact; international sales faced tough comparison to prior-year distribution expansion.
- **Digital channel growth (both brands)** [on_track]: Continued growth driven by successful consumer acquisition and retention; Obagi fully lapped transition to first-party e-commerce model.
- **Marketing investment evolution** [new]: Milk: evolving from organic/influencer model to include top-of-funnel media advertising. Obagi: shifting from professional-only advertising to direct consumer outreach to drive physician practice demand.
- **Tariff mitigation actions** [on_track]: Three key actions: optimizing supply chain flows to reduce China exposure, preparing selective low single-digit pricing actions, deepening supplier collaboration for efficiencies.
- **Debt refinancing** [delivered]: Extended maturity profile to March 2030; increased net debt due to refinancing costs.

### Fears / risks

- **Macro**: Softer consumer sentiment and spending, particularly if tariffs and other factors continue to impact broader macroeconomic environment.
- **Tariff**: Low single-digit COGS increase assumed; risk if tariffs escalate further (e.g., China tariffs to 145%) though exposure limited to ~10% of COGS.
- **Supply chain**: Obagi fulfillment rates and Milk stockouts indicate need for greater supply chain flexibility and reactivity; transformation underway but not yet complete.
- **International**: Milk Makeup international performance facing tough comps, later innovation launches, and retail partner inventory adjustments.
- **Distribution**: Risk of expanding distribution too fast ahead of brand awareness and consumer pull; management emphasizes disciplined posture.
- **Marketing**: Increasing marketing investment required (both dollars and percent of sales); evolving models carry execution risk.
- **Debt**: Net debt increased to $172.1M due to refinancing costs; leverage management needed alongside growth investment.
- **Legal**: Nonrecurring legal costs declining but still present; forecast assumes continued reduction.

### Key quotes

> “We're encouraged, however, by the end of the quarter performance, which gives us confidence that our brands and businesses are poised to achieve our annual growth and profitability goals.”

> “We are targeting net revenue growth in the mid-teens and at an adjusted EBITDA margin in the mid to high-teens.”

> “Assuming the current tariffs remain in place for the whole of 2025, including the latest news on China tariffs, we expect a low single-digit percent increase in cost of goods sold for fiscal 2025 and that is already reflected in our”

> “We will obviously continue we said that's part of our model as we drive growth and operational and gross margin efficiency we expect to invest more and more in our brands both in terms of dollars and percent of sales.” — Michel Brousset

## Quarter one-liners

- **2025 Q1:** Waldencast Q1 2025: revenue $65.4M (-4.1% YoY) with Milk Makeup -15.1% (strong US retail + Ulta launch) and Obagi Medical +7.1% (supply chain issues); guidance maintained at mid-teens revenue growth, mid-to-high teens adj EBITDA margin; supply chain improvements expected by end Q2; tariff impact man
- **2024 Q4:** Waldencast reports 27.5% FY24 revenue growth, 530bps gross margin expansion, guides mid-teens FY25 growth, launches Milk Makeup at Ulta, secures $205M credit facility.
- **2024 Q3:** Waldencast posted 34.6% Q3 revenue growth, margin expansion to 73%+, reaffirmed guidance, highlighted inventory improvement, regulatory investigation, and plans to boost marketing and expand Milk Makeup distribution.
- **2024 Q2:** Waldencast posted 25.7% YoY Q2 revenue growth, expanded margins, noted early‑quarter out‑of‑stocks, and reaffirmed a raised outlook for 2024.
- **2024 Q1:** Waldencast Q1 2024: comparable net revenue +21% to $67.9M, adjusted gross margin +1100bps to 76.3%, adjusted EBITDA margin 16.6%; FY24 guidance expects accelerated revenue growth and mid-teens EBITDA margin.

## Theme arcs

- **Revenue Growth** (deteriorating): From double‑digit YoY gains in 2024 to a 4.1% decline in Q1 2025
- **Gross Margin** (stable): Margins expanded in 2024 then held near 76% in 2025
- **EBITDA Margin** (stable): Mid‑teens throughout, modest expansion in FY24
- **Distribution Expansion** (improving): New markets and Ulta launch progressed, though execution risk persists
- **Inventory Management** (deteriorating): Out‑of‑stocks and inventory adjustments flagged each quarter
- **Regulatory Investigation** (new): First noted Q3 2024, remains a cash‑draining risk
- **Supply Chain Flexibility** (new): Supply‑chain disruptions surfaced in Q1 2025
- **Marketing Spend ROI** (deteriorating): Increasing spend pressure noted from Q1 2024 onward
- **Capital Liquidity** (deteriorating): Cash fell to $10.8 M in Q1 2025 despite $205 M facility
- **Macro/Tariff Exposure** (new): Tariff impact and softer consumer sentiment introduced in 2025

## Guidance path

2024 Q1:maintained → 2024 Q2:raised → 2024 Q3:maintained → 2024 Q4:maintained → 2025 Q1:maintained

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Research context only. Not personalized investment advice.

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