• Net Revenue: $72.1 million in Q4, a 29.4% increase; $273.9 million for fiscal year 2024, a 27.5% increase.
• Milk Makeup Revenue: $29.9 million in Q4, a 31.9% increase; $124.6 million for fiscal year 2024, a 24% increase.
• Obagi Medical Revenue: $42.2 million in Q4, a 27.7% increase; $149.3 million for fiscal year 2024, a 30.7% increase.
• Adjusted Gross Profit: $52.6 million in Q4, a 30.7% increase; $203.6 million for fiscal year 2024, a 35.3% increase.
• Adjusted Gross Margin: 73% in Q4; 74.3% for fiscal year 2024, a 530 basis point improvement.
• Adjusted EBITDA: $11.2 million in Q4, doubling from the previous year; $40.3 million for fiscal year 2024, a 65.1% increase.
• Adjusted EBITDA Margin: 15.5% in Q4, a 530 basis point expansion; 14.7% for fiscal year 2024, a 350 basis point increase.
• Cash Position: $14.8 million at the end of 2024.
• Net Debt: $154.2 million at the end of 2024.
• New Credit Facility: $205 million five-year facility, including a $175 million term loan and a $30 million revolving credit facility.

• Warning! GuruFocus has detected 3 Warning Signs with WALD.

Release Date: March 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Waldencast PLC (NASDAQ:WALD) reported a robust 29.4% increase in net revenue for the fourth quarter, driven by strong performance across its brands.
• Milk Makeup experienced a significant growth of 31.9% in the quarter, supported by channel expansion and a successful launch into 600 Ulta Beauty locations.
• Obagi Medical delivered a 27.7% increase in comparable net revenue, fueled by accelerated performance in the US physician-dispensed and e-commerce channels.
• The company's adjusted EBITDA doubled to $11.2 million in the fourth quarter, with a notable margin expansion of 530 basis points year over year.
• Waldencast PLC (NASDAQ:WALD) secured a new $205 million five-year credit facility, providing greater financial flexibility and extending its debt maturity profile through 2030.

Negative Points

• The first quarter of 2025 is expected to be relatively flat due to the anniversary of a successful product launch and inventory adjustments by retail partners.
• The company is currently using a significant portion of its cash to cover non-recurring expenses associated with an ongoing regulatory investigation.
• Adjusted gross margin for Obagi Medical contracted by 130 basis points in the fourth quarter due to planned reductions to drive future operational efficiency.
• There is a natural level of cannibalization expected between Ulta and Sephora as Milk Makeup expands its distribution, which may impact short-term sales.
• The macroeconomic environment remains challenging, with normalization in the beauty market affecting retail inventory levels and consumer spending patterns.

Q & A Highlights

Q: Can you provide details on the expected sales acceleration throughout the year, given the flat guidance for Q1? A: Michel Brousset, CEO, explained that Q1 is affected by the anniversary of last year's successful Jelly launch and some retail inventory adjustments. However, they expect strong acceleration throughout the year due to new innovations like the skin tint and the Ulta launch, which are just beginning to hit the market. Obagi is also expected to see substantial growth in its physician dispense business and digital channels.

Q: Can you quantify the impact of the Jelly launch in Q1 and the Ulta pipeline in Q4? A: Michel Brousset, CEO, stated that while specific numbers aren't disclosed for competitive reasons, the Jelly launch had a significant impact on Q1 results. The Ulta pipeline filled at the end of last year also contributed to Q4 results, but they are pleased with the early results from the Ulta launch.

Q: How will marketing investments differ this year compared to last year? A: Michel Brousset, CEO, mentioned that they plan to increase marketing investments both in absolute terms and as a percentage of sales. For Milk Makeup, they are broadening their marketing approach to include more paid brand campaigns alongside influencer-based marketing. For Obagi, they are focusing on taking the brand outside of the doctor's office and advertising directly to consumers.

Q: What macroeconomic factors and consumer health assumptions are embedded in the guidance for the year? A: Michel Brousset, CEO, noted that despite a changing macro environment, the beauty industry remains resilient with ongoing consumer premiumization. Waldencast's brands are well-positioned to benefit from this trend, and they are less exposed to geographic variations compared to larger companies.

Q: Is there potential for expanding Milk Makeup's distribution beyond 600 Ulta stores? A: Michel Brousset, CEO, confirmed the potential for expansion but emphasized the importance of maintaining high productivity per store. They are focused on ensuring distribution does not outpace brand awareness and growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.