Waldencast plc

First-quarter net revenue was $65.4 million, down 4.1% from the prior year. Adjusted gross profit margin was 76.4%, up 10 basis points year over year, and adjusted EBITDA was $4.4 million, or 6.7% margin. Milk Makeup revenue declined 15.1%, with adjusted gross margin at 69.5% and adjusted EBITDA margin at 14.9%. Obagi Medical revenue increased 7.1% to $36.2 million, with adjusted gross margin at 82% and adjusted EBITDA of $5.9 million, or 16.3% margin. For fiscal 2025, management reiterated guidance for net revenue growth in the mid-teens and adjusted EBITDA margin in the mid to high-teens. They also said they expect a low single-digit percent increase in cost of goods sold for fiscal 2025 assuming current tariffs remain in place, and that this is already in guidance.

Michel Brousset framed Q1 as a mixed quarter with expected headwinds, including tough comparisons, a softer beauty market, and a fluid macro and retail backdrop. He emphasized that Waldencast is still early in building a multi-brand platform and said the company is strengthening its brands through innovation, broader distribution, and deeper consumer engagement. His tone was confident and strategic, especially around Milk’s complexion expansion, Obagi’s physician-channel strength, and the need to improve supply-chain flexibility and responsiveness.

Manuel Manfredi highlighted that Q1 revenue declined to $65.4 million, adjusted gross margin stayed at 76.4%, and adjusted EBITDA was $4.4 million. He said cash was $10.8 million at quarter-end, with $22.5 million available on the new revolving credit facility, and net debt increased to $172.1 million from $154.2 million at year-end due mainly to refinancing costs that extended maturity to March 2030. He noted cash use reflected lower EBITDA and higher inventory, but expects strong positive adjusted EBITDA-to-cash conversion for the full year, supported by disciplined working capital and low capex; he also said nonrecurring legal costs should continue declining. On tariffs, he said exposure to China is only about 10% of cost of goods, mostly packaging, and even a return to very high tariff rates would not be material.

Analysts focused on Obagi’s supply-chain restructuring, physician-channel trends, sell-in versus sell-through, tariff pricing, Ulta’s early performance, and SG&A/marketing spend. Management said Obagi’s main issue was supply-chain reliability and long lead times, not a demand slowdown in the physician channel, and that restructuring should improve fulfillment and responsiveness. On Milk, they said U.S. sell-out was plus 9% while sell-in was affected by timing and inventory dynamics; they described Ulta as highly incremental and productive, with potential for further expansion inside Ulta or possibly Ulta at Target. On tariffs, management said the impact is manageable given limited China exposure and said selective low- to mid-single-digit price increases remain an option if needed.