Waldencast plc’s Q1 2025 Results: Navigating Short-Term Challenges Toward Long-Term Growth

Waldencast plc (NASDAQ: WALD) is poised to provide critical insights into its fiscal 2025 trajectory as it prepares to host its first-quarter earnings conference call on May 14, 2025, following the release of Q1 results on May 13. The event will spotlight the company’s ability to balance near-term headwinds with strategic initiatives designed to drive sustainable growth. Analysts and investors will closely monitor guidance on revenue momentum, margin expansion, and the execution of key brand milestones, such as the Milk Makeup rollout at Ulta Beauty.

Financial Outlook: A Temporary Slowdown Ahead of Acceleration

Waldencast has guided for mid-teens Net Revenue growth for fiscal 2025, though Q1 2025 is expected to show relatively flat growth compared to the prior-year quarter. This cautious start stems from two factors:
1. The anniversary of Milk Makeup’s “Jellies” launch in Q1 2024, which created a high comp for 2025.
2. Retail inventory adjustments as partners recalibrate stock levels, temporarily dampening sales.

Despite the soft Q1, management has emphasized confidence in progressively accelerating growth through the year, particularly as the Milk Makeup-Ulta Beauty partnership gains traction. The company also aims to expand its Adjusted EBITDA Margin into the mid-to-high teens, leveraging operational efficiencies and sales leverage.

Strategic Drivers: Brand Momentum and Operational Leverage

The Q1 call will likely highlight two critical growth engines:
1. Milk Makeup’s Ulta Beauty Launch: The rollout to over 600 Ulta stores in March 2025 represents a major distribution win for the indie beauty brand. This partnership capitalizes on Milk Makeup’s viral popularity, with products like its Cooling Water Jelly Tint Blush + Lip Stain driving demand.
2. Innovation Pipeline: Both brands are poised to fuel growth through new launches:
- Obagi Medical: Expanding its dominance in professional skincare with launches like the ELASTIderm Lift Up & Sculpt Facial Moisturizer, which contributed to its status as the fastest-growing U.S. professional skincare brand in 2024.
- Milk Makeup: Sustaining momentum with upcoming launches designed to maintain its “cult-favorite” status.

Additionally, international expansion remains a priority, with Milk Makeup bolstering its presence in markets like Scandinavia and the U.K., while Obagi continues to capitalize on e-commerce and physician dispense channels.

Financial Strength and Flexibility

Waldencast’s balance sheet reflects a strengthened financial profile:
- A new $205 million five-year credit facility replaced older debt, extending maturities and reducing refinancing risks.
- As of December 2024, the company held $14.8 million in cash and maintained a disciplined approach to G&A expenses, prioritizing reinvestment in sales, marketing, and innovation.

Risks and Challenges

• Regulatory and Legal Headwinds: While costs related to past restatements and SEC investigations have declined, these remain a lingering concern.
• Market Volatility: Beauty demand is sensitive to consumer spending trends, though Waldencast’s balanced portfolio (professional skincare vs. indie makeup) helps mitigate category-specific risks.

Conclusion: A Foundation for Sustainable Growth

Waldencast’s Q1 2025 results will serve as a litmus test for its ability to navigate short-term challenges while executing on high-impact strategies. The strong Q4 2024 performance—30.8% revenue growth and a near-doubling of Adjusted EBITDA to $11.2 million—provides a solid base, while the Milk Makeup-Ulta partnership and innovation pipeline position the company for acceleration later in the year.

Investors should focus on margin expansion progress, the cadence of Ulta sales contributions, and the pipeline execution of new products. With a $205 million credit facility bolstering flexibility and a brand portfolio demonstrating resilience, Waldencast appears positioned to deliver on its mid-teens revenue and margin targets. While Q1’s flat growth is a hurdle, the company’s strategic clarity and operational discipline suggest that patience may be rewarded as fiscal 2025 unfolds.

Final Take: Waldencast’s story remains anchored in brand agility and portfolio diversification. The Q1 results are a stepping stone toward a year of acceleration—if execution aligns with guidance, the stock could reflect a robust recovery in the latter half of 2025.