Waldencast's 2025 Q1 Earnings Call: Unraveling Key Contradictions in Growth, Margins, and Innovation Strategies

Obagi's growth and supply chain restructuring, tariff management and cost impact, supply chain restructuring and inventory management, gross margin expansion and growth strategy, and innovation and product pipelines are the key contradictions discussed in Waldencast's latest 2025Q1 earnings call.



Revenue Decline and Growth Challenges:
- Waldencast plc reported a net revenue of $65.4 million for Q1 2025, representing a 4.1% decline from the previous year.
- The decline was attributed to challenging comparisons with strong growth from a year ago, a decelerating beauty market, and a fluid macro and retail environment.

Milk Makeup Performance and Innovation:
- Milk Makeup experienced a revenue decline of 15.1%, despite strong domestic performance fueled by the successful launch of Hydro Grip Gel Skin Tint.
- The international performance faced tough comparisons due to the expansion in Q1 2024 and inventory adjustments by retail partners, impacting sales.

Obagi Medical Growth and Supply Chain Issues:
- Obagi Medical achieved a revenue increase of 7.1%, but growth was tempered by out-of-stock issues in key SKUs.
- Supply chain disruptions led to lower fulfillment rates and stockouts, which are currently being addressed through a transformation of third-party logistics providers and distribution center optimization.

Tariff Management and Cost Impact:
- Waldencast expects a low single-digit percent increase in cost of goods sold for fiscal 2025, given current tariff scenarios.
- Efforts to mitigate tariff impacts include optimizing supply chain flows, preparing for selective pricing actions, and collaborating with supplier partners.